April 25, 2023
With increased demand for cosmetic procedures and wellness treatments among both the older and younger generations, the med spa industry is booming. The global med spa market is expected to grow from $14.4 billion in 2022 to $25.9 billion by 2026, and some estimates indicate this sector will continue expanding at a compound annual growth rate of 14.97% annually until 2030. Given its high profit margins, lack of exposure to commercial or government payors, and opportunities for expansive service line growth, investor appetite in the space is increasing; however, it is important to consider the unique legal challenges that impact this industry and transaction structuring.
Read on for six key considerations investors should know about the med spa landscape, particularly when structuring transactions and new med spa enterprises.
The med spa industry remains highly fragmented and diverse, making it a compelling investment opportunity likely to see a flurry of activity in the coming years. Notwithstanding, this sector also presents important aspects investors should be aware of, such as vast variability in state regulatory landscapes, an increased interest in regulatory oversight and intermittent guidance from state licensure boards. Accordingly, compliantly operating a med spa requires continual analysis of applicable laws, regulations and guidance. Investors should carefully diligence the above areas and consult experienced legal counsel to avoid fines, penalties and licensure actions.
For more information regarding the med spa space or any other healthcare sectors, please contact one of the authors.