Back Rub Entrepreneur Says He Feels the Knead for National Expansion : Personal services: He hopes to build fledgling company from its three stores now to ‘McRub’ by the turn of the century.

People in trendy New York and glitzy Las Vegas have taken to the Great American Backrub Store. But will folks in the nation’s heartland feel the need for kneading?

The fledgling company offers patrons at its three stores a fully clothed, walk-in back rub and a selection of stress-relief goodies, such as electric massage tools, bath oils and contoured pillows. Customers are pounded, pushed, pulled and pinched--and many find themselves coming back for more.

Great American Backrub Store Inc. opened its first store in Manhattan in October, 1993. A second opened there in March, 1994, followed four months later by a franchised outlet in Las Vegas. Within the next five years, the company hopes to expand into malls, airports, cities and suburban areas across the country.

“What I’m trying to create is the ‘McRub’ in the year 2000,” said Bill Zanker, the company’s founder and chairman.

Zanker, 40, is also founder of the Learning Annex, an adult-education network that offers classes ranging from how to walk on fire to finding a rich spouse. He said he got the idea for Great American Backrub from seeing people line up in front of a man on a park bench in San Francisco offering passers-by a one-minute back rub for $1.

He also noticed stores such as Sharper Image and Brookstone offering a variety of stress-relief products and decided to go into the business of making people feel good.

Great American Backrub stores employ licensed massage therapists, who rub down customers for 10, 15 or 20 minutes for just under $1 a minute.

“It’s a novel concept, no question about it,” said Robert E. Mescal, a research analyst for The Institute for Econometric Research in Ft. Lauderdale, Fla.

Novel, yes, but strong enough to sustain the kind of expansion Great American Backrub is planning?

The company has lost money from its inception in December, 1992, through Sept. 30, 1994, the most recent period for which figures are available, according to filings related to the company’s initial stock offering on Feb. 28.

In the nine months through Sept. 30, Great American Backrub lost $784,000 on revenue of $518,000. Zanker, however, said the losses were due to normal expenses incurred in expanding the company.

“We’re building a whole organization to open 40 stores in the next two years. And I’m sure by next year we’ll be very profitable with a large revenue base,” Zanker said.

Great American Backrub plans to open those stores in Los Angeles, San Francisco and New York, with 10 owned by the company and the rest franchised, Zanker said. By the year 2000, the chairman sees more than 1,000 stores, possibly expanding to Boston, Miami, Washington, Chicago and St. Louis.

Terrance Murray, Great American Backrub’s chief executive and former CEO of discount haircut chain Supercuts Inc., said the company is capable of expanding to 3,000 to 5,000 stores within five to eight years.

Analyst Mescal, however, said forays into other cities and towns might not bring the success the company has seen in New York, where business is boosted by lots of pedestrian traffic.

“They’re going to have to pick their markets with some care,” Mescal said.

Customers in one of the Manhattan stores, though, said the company provides a useful service and predict it will continue to succeed through expansion.

“I think it would work anywhere in the U.S. It’s a great way to de-stress,” said Jodi Sandridge, a native New Yorker who now lives in Orangeburg, S.C., and stopped by the store while visiting friends.

Sandridge said the store would be welcomed in Orangeburg, a small city surrounded by farmland where she often hears fellow residents talk of wanting a place to go for back rubs or massages.

Barbara McKeon, a Manhattan legal secretary, said she tries to get rubbed down at least once a week as a relief from her stressful job. McKeon, sitting in one of the large vibrating massage chairs in the store’s waiting area, said she got her first back rub after walking by and seeing others being treated.

“What made me feel comfortable was the fact that I got to keep all my clothes on,” she said. “It’s a 20-minute break from total stress relief, and you wind up feeling as though you’ve had an eight-hour sleep.”

Zanker said Great American Backrub is counting on word of mouth from customers like McKeon as it expands, especially into smaller cities and towns that won’t have the heavy foot traffic that attracts curious passers-by.

To fund its expansion, the company early last month completed an initial stock offering of 1.25 million shares to the public at $5 each. Since then, the company’s shares--which trade under the stock symbol “RUBB”--have fallen to less than $4 on the Nasdaq Stock Market.

“Obviously, we’re somewhat disappointed by that,” said CEO Murray. But he remains confident: “Because of its newness, it uniqueness, people have to see it and view what’s happening inside the store.”