The Making Waves rent-a-hot tub enterprise has all the ingredients of a classic Washington business. It's a California-trendy idea with the kink suitably diluted by a dash of prep. Its owners are a group of six handsome, well-educated, mid-30s professionals, both men and women.
They say they are making money hand over fist.
The cost for a half-hour in a hot tub--technically, a fiberglas "spa" with whirlpool jets--is $6 to $7 per person. But few want to soak alone (all of the tubs are in private rooms), so the company usually nets $12 for a half-hour rental--more, of course, for group soaks. A 25-person party tub rents for $50 an hour. Overhead, once the $250,000 start-up costs are covered, consists of rent, monthly utility and chemical costs and wages.
The first Making Waves was launched in 1981 at Seventh and D streets NW and grossed about $200,000 in its first year, according to owner and attorney Richard Sablowsky. The second opened in November of last year in College Park, but not before the owners encountered some community opposition.
The Georgetown location off of M Street NW switched on its tubs about 10 days ago and had 450 customers in its first week, Sablowsky said.
The owners say they have no competition, locally or nationally. A few outdoor hot tubs at the Eastern Shore beaches, a few indoor spas in Frederick, Md., maybe one or two in local sales showrooms and a few at Vermont ski resorts are all the rental competition they say they've been able to detect. In California, they said, hot tubs generally are found in private homes.
They are therefore proceeding full steam ahead.
Negotiations with the venture's first "$2 million investor" are underway. Their completion will enable them to expand in three to five months in Annapolis, Baltimore, Richmond and in New York at Greenwich Village and Upper West Side locations. Leases and building plans for these outlets already have been obtained, the owners said. They declined to give specific profit and loss figures, or to identify their prospective backers.
Further expansion in Philadelphia, Atlanta, Chicago, Pittsburgh, St. Louis and Minneapolis is also planned, Sablowsky said. The group is looking for a few more $2 million men to help finance possible ventures in Canada and Europe, they said. The goal is to open 25 Making Waves emporiums in the next three years.
The typical Making Waves customer has money to spend. The majority are "working professionals" nearing age 30 or over, said owner and sculptor Eric Rudd. He observed that people much younger than that "feel young, their bodies feel young" and they're not desiring of the "rejuvenation" a lot of their customers seek. Business booms after marathons, he said.
Making Waves appears to have prospered with virtually no advertising budget, perhaps because the mildly prurient novelty of the business has generated a fair amount of play in the media.
One good dose of public exposure came out of the expansion to College Park, where a community pastor, saying that such a business "promotes lust and sexual immorality," organized a campaign against it. That resulted in a recommendation by the College Park City Council that Prince George's County require annual health inspections and licensing reviews of the establishment.
The owners of the company responded to the episode by dropping their plans to advertise the College Park opening. "It's a word-of-mouth business," one owner said.
And word-of-mouth, for Making Waves, could work both ways. Its owners realize that one incidence of disease, or even a rumor of one, could have devastating effects.
To that end, they try to emphasize the cleanliness of their facilities. The water is circulated through a filter every 11 minutes, treated hourly with bromine, a chlorine-like chemical, and drained daily. The decks surrounding the tubs are scrubbed after each rental, they say.
The business was started "on a shoestring," said owner and CPA Cal Klausner. The spas themselves were purchased from a bankrupt Rockville business. Another owner, Anthony Ruddy, is also owner of Sun Craft Decks Inc. in Berwyn Heights and had building skills to offer in the new venture. The lease on the Seventh Street building was and is held by Rudd. The remaining partners are free-lance photographer Barbara Strong and attorney Matthew Bogin. Gallery owner Chris Mittendorf is a "silent partner," Sablowsky said.
The business requires real estate with a good amount of ground space, so the owners say they seek out "raw," warehouse-type facilities that can be remodeled and are less expensive. The College Park Making Waves was formerly "an old dilapidated car dealership that nobody wanted," said Klausner. The Georgetown baths ended up in what was recently a furniture store after the group tried to secure the former Woolworth's site near Wisconsin Avenue and M Street NW.
The rapid expansion planned for Making Waves inevitably raises questions about whether the owners can maintain the standards they say they set for themselves here. Quality control becomes an issue, to which Rudd responded by saying, "We plan to do a lot of traveling."
"Definitely no franchises" is the word on how the expansion will be managed, with new locations owned by the current group and any new members that might be recruited. A public stock offering is being considered.
The group half-jokingly refers to the "Making Waves School" they plan to run in the Georgetown location, where out-of-town managers will be trained. They also have their own construction team.
The mood of the owners is ebullient--and only beginning to be tinged with the seasoning of experience.
"A lot of people come back from California with the idea of opening a hot tub business, but it takes a conscious effort at cleanliness, and the nice interior is no accident," Rudd said. "We're in the business of supplying clean, hot water in a pleasant environment."