Deciding between starting a tanning salon franchise or starting from scratch can be a difficult decision for some. Franchising works well but isn’t right for everyone and the answer comes down to the individual, how much risk they are willing to take and how much time they are willing to put into the business.
The pros of owning a tanning bed franchise is that it is a proven business model, brand recognition and buying power. Cons include not having full control of the business and costs that last forever from royalties and advertising fees. As with anything else each franchise has its own quirks and snake oil salesmen, so buyer beware.
To get an in depth look on a tanning bed franchise, request a franchise circular which will give information on how many franchises they have, how much money they made, number of franchises opened by year, franchise fees and royalties, etc. Talk with some of the other franchised businesses to see how the company is to work with and is the system effective. Tanning bed franchises like Executive Tans, Palm Beach Tan and Planet Beach are successful because they have a proven formula for success, name recognition, professional advertising, provide the equipment and training you need to start a successful tanning business. In most cases the cost to get to this level of organization and professionalism is much less than you would pay as a single owner and will get you up to speed quickly and right.
Franchising isn’t the right option for everyone but does offer several benefits, especially if you want a business that comes with an instruction manual and you don’t have to worry about websites, maintenance, brand identity, training materials, creating forms, researching equipment, inventory discounts, ongoing management support among all of the other things needed to start a business from the ground up. Not everyone has the time or ability to create a business from scratch and with the right franchise the operator can focus more on the actual business than working in the business. Another pro for a franchised business is that the approval rate for SBA loans is typically higher for well-established franchised startups versus non-franchised all things related to the owner’s finances being equal. The flip side though is you will lose the ability to do it your way and the fees which turn a lot of people away in the tanning industry as a salon isn’t the most complicated of business models.
An average royalty will cost 6% of gross revenues.
The tanning franchise model probably won’t work in a small town due to the additional overhead that is inherent with franchised businesses. Volume is important to overcome the drag on profits that will be incurred from fees on sales. A good rule of thumb when considering a tanning bed franchise is when revenues are projected to be over $300,000.