Tanning Salon Franchise,Cost,Benefits – Complete Guide 2023

If you are interested in starting a tanning salon business or a Tanning salon franchise, you’ve come to the right place. Find tons of information on tanning franchises and the tanning industry.

Getting Started in Opening a Tanning Salon Franchise

The first step is to gather all the information you can about tanning franchises. Search for a few tanning franchises in your area and visit their locations, hang out, and try their beds and lotion products. This will help you get a feel for the overall concept of the tanning salon franchise.

Try to visit at least three different Tanning franchise locations and speak with the owners. Interview them as if you were a student trying to do a school project on Tanning Salons and Tanning franchising. Ask how their profits are, if they are happy with the franchise they chose, what is the most difficult part of their job and what was their first step in opening their shop.

The answers to these questions will give you a better idea of exactly what it takes to open a Tanning Salon and the store visits will give you a feel for which tanning franchises you like and might like to own.

The next step would be to request information from a franchise you are interested in to discover what their particular start up costs are and initial investment requirements. All tanning franchises require various capital investment amounts and have varying degrees of support. Analyzing all the information you can will give you a better idea of which tanning franchise is best suited to fit your needs.

When you finally decide which tanning franchise you would like to buy, simply contact the franchises sales department and they will guide you through the process. We recommend using our contact form to speak with a leading tanning salon franchise.

Tanning Salon Franchise Start Up Costs

The initial franchise fee for a tanning salon franchise capital will generally cost anywhere between $30,000 – $80,000. Franchise fees will vary depending on which tanning franchise brand you choose.

Tanning salon franchises will typically require approximately $60,000 – $100,000 of liquid capital. The total capital investment can cost anywhere between $75,000 – $500,000. Try not to get too concerned with the costs as most franchises will help you with a third party financing option.

These are simply general figures to give you an idea of what it could cost to start your own tanning salon franchise. To gather more specific information on the initial investments and start up costs, you should request information from the tanning salon franchises you are interested in owning.

Do you need franchise financing?

The average new tanning salon franchise owner will borrow some of the money needed to open their store. However, it is important to note that a franchise owner should not borrow all of the money, as they do not want to risk dependency on the market’s lows and highs. Another reason for not borrowing the total cost is to keep money and assets for the rough times ahead.

A franchise owner will also want to grow their business and to do so you will need money. In order to grow the franchise, new employees are needed and possibly new equipment. Then of course, if the franchise is successful, the franchise owner will want to open more shops. All of this costs money, and more than likely will require some degree of financing.

Benefits of Owning A Tanning Franchise

The concept of “franchising” or licensing operators originated decades ago. As of 1992, one out of every twelve businesses was a franchise. Franchising allows any qualified person, with the right amount of capital investment, to own and operate his or her own business. Franchise owners are able to gain profit by using an already established brand name, implement a proven system of operations, receive guidance and consultation on personnel, training, audits and controls, and follow a successful marketing plan created by the franchise corporation.

Why buy a tanning franchise?

There are many reasons to purchase a tanning salon franchise. One of the major reasons is the support you will receive from the corporate office as far as technical issues, purchasing decisions, employee training and certification and marketing support. While there are no guarantees in business, having support from a well-known franchise operation will greatly increase your chances for the successful operation of your new tanning salon.

Tanning Salon Franchises Help their Franchisees with:

• Real estate support
• Permitting
• Construction supervision
• Tanning equipment
• Lower purchasing priced on tanning  products
• Inventory order
• Advertising & marketing support
• Comprehensive employee training & certification
• Custom financing options from a Third Party
• Site location selection with full demographic research
• Lease negotiations

How Do I Finance Buying A Tanning Salon Franchise?

Despite the Department of Commerce having proclaimed the success rate of franchises to be 90% compared to other small businesses success rate of only 40%, you will still find it difficult to borrow money to start your franchise.

Tanning salon franchises require a large initial investment and liquid capital available for the franchise company to use as insurance. There are several different ways to attain the capital needed to open your tanning salon franchise. You can obtain a loan from the bank or family and friends.

Getting a loan from A bank tends to be more difficult than family and it also charges a higher interest rate. However, most families do not have a large amount of money to spare. You can also use your credit card, but you must watch those high finance charge rates.

If you are unable to secure a loan or use your credit cards as equity, then you should try reaching the United States Small Business Association. The SBA offers guarantees on 90% of loans up to $155,000 and 85% of the remainder up to $750,000 total. The interest rates on these loans vary but are usually quite reasonable. The standard agreement terms range from 5 to 25 years.

Some state and local governments also offer financing options for franchise owners to encourage small business development. However, each state varies on what they do and don’t offer. Check in with your local government to see what options they have available.

Tanning Salon Franchise Owner Advice for Success

Discover tips for success from real franchise owners by reading the following interviews. Coming soon – here is the list of questions the franchisees will answer.

Tanning Salon Franchise Interview Questions

• What interested you most about starting a tanning salon business?
• What would you was instrumental in helping you to finally take the plunge and seriously persue the opportunity?
• Did you purchase a franchise or did you decided to open a privately owned shop? Why or why not?
• What 3 things would you identify as critical towards the success of your tanning salon?
• Why did you choose to own a part of this particular tanning franchise company?
• From start to finish, how long did it take (how long was the process) to open this business?
• What was the most difficult part of starting and/or operating this type of business?
• Do you have a large repeat customer base? If so, how do you keep them coming back?
• Do you make most of your profits on tanning bed packages or the products (lotions) you sell? Is there a common ratio of services sales to product sales that the industry strives for?
• Have you noticed any seasonal trends with tanning? (Do people tan more in the summer or winter?) If so, how do you stay profitable during the off-season?
• During your research what figure or range were you told was accurate for necessary start up capital? Was this accurate? Why or why not?
• Were you profitable the first year you were in business? Were you able to recoup your initial investment? If so, how long did it or does it take?
• If you could start over, would you open a tanning franchise again as opposed to opening your own salon? Why or Why not?
• What would you advise people considering this business to do or not to do?

Franchise Financing Lingo – Glossary of franchise financing and loan terms

Amortization – To provide systematic equal amounts of money in order to replenish the full loan amount.

Asset – Something of value against which you can borrow money

Balloon – When the final payment in a loan is greatly higher than prior payments.

Cash flow lending – When a bank provides a loan based solely on the cash flow of the borrower.

Collateral – Assets a borrower provides the bank with as security to ensure loan repayment. If borrower defaults on loan, the collateral assets are the bank’s property.

Debt financing – borrowing another person’s money and paying rent for using it.

Demand loan – A type of loan where the bank can force the borrower to repay at any given time.

Equity financing – selling a part of your ownership therefore relinquishing some control.

Interest – The cost of borrowing money, expressed as a percentage of the total amount.

Lien – An example would be the security interest earned on a mortgage. Something a creditor will claim on property.

Principal – The dollar amount of a loan where interested is owed.

Secured debt – is debt that is attached to a reasonable amount of collateral.

Security interest – A bank’s lien. (see lien definition above).

Term loan – A loan outlining specific time periods when repayment is due

Finance a Tanning Salon Franchise

Before you seek your franchise financing you will want to have a clear estimate for the total amount you will need to borrow for your new venture. The following categories should help you to put together a realistic financing estimate.

Location Related Expenses

Property Leases for your tanning franchise, security deposits, monthly lease fees. Purchasing a property include the facility and any land associated with the property combined with yearly taxes. Utilities costs, deposits, signage and licenses. Any renovation costs or site modification costs.

Equipment
What are the total equipment costs to get your franchise up and running? How much do the tanning beds cost, air conditioning unit and fans?

Operating (Working) Capital

Typically the tanning franchise company will require a certain amount from you.

Interior Decorations

Costs associated with revamping your tanning franchise location’s interior and getting it up to franchise standards with the necessary colors, look and fixtures.

Inventory

How much inventory will you need to keep on hand (lotions, stickers, googles)? What are the costs associated with this inventory? Ask your frachise provider what you’ll require in this area.

Insurance

Insurance is required for your franchise location (property location), worker’s compensation, liability, casualty, auto insurance etc.. Depending on your business this fee can have quite a range.

Education

Many times training is provided for you through your franchise arrangements and you may not need to count this a second time for your financing. However in some cases you may wish to get additional training for computer use or skills required that the franchise may assume you already have.

Labor and Training

You will need to cover labor costs for employees on a monthly basis which may begin before you even open your doors. You might have to spend to train your employees or invest your own time getting them started.

Zoning Expenses and Consulting

If the location you’ve chosen for your tanning salon franchise has not had a business like yours in the past you might incurr zoning expenses. You may also incurr consulting fees to help you navigate the zoning regulations to get your franchise location approved.

Franchise Fees

Thes fees can vary depending on the tanning bed franchise you choose.

Lease Your Tanning Salon Equipment

Tanning beds can cost up to $25,000 per bed depending on the quality, which can really drain a tanning salon of its cash flow.  This is why many tanning salons choose to lease their equipment. 

By leasing tanning equipment, the tanning salon can also save their credit to use in an emergency situation, instead of taking out a loan to buy an expensive tanning bed. 

There is also a tax advantage for leasing tanning equipment.  Salons who lease their equipment are allowed to write off the rental payments, which is more attractive than the depreciation tax cuts for owning tanning equipment. 

Questions To Ask Your Franchise Company

1. What is the risk involved with franchising and how do you (the franchiser) intend to minimize that risk?

2. What happens if I decide I no longer want to operate the franchise? Do you (the franchiser) have a policy that requires me to pay a cancellation fee?

3. Do you have any lawsuits against your franchise? May I see the list of lawsuits?
(Look at reasons sited to see if there is a pattern).

4. What is your franchisee turnover rate? Can I have a list of the franchisees that left?

5. How much money can I potentially earn? – They should not answer this question, as the law prohibits them. Be careful of the ones who do answer this.

6. Do the company-owned stores maximum support for the parent company? (This is a positive sign and Should be a yes.Its because of of not to dependent on the royalty stream).

7. Is your franchise trademarked? (Should be because it’s what you are buying with the franchising fee).

8. How long is your franchise-training program? (Don’t want it to be too short/long).

9. Can I see some of your company’s financial statements?

10. Can I get a list of all the franchise owners near to my area? (Speak to the owners and discover their level of satisfaction and profitability).

Sunless Tanning Sprays – DHA

The scare of skin cancer being caused by UV rays has made people turn to sunless tanning or a spray tan. The best sunless tanning sprays contain DHA (dihydroxyacetone) as the active ingredient. DHA is a chemical that mixes with dead skin cells to produce the appearance of a tan.

The only draw back to this type of tanning is that it lasts only 7 – 10 days due to the shedding of dead skin cells. DHA has no known side effects for external application as long as the eyes, lips and mucous membranes are protected. Those who get this sunless tan must keep in mind that it is not a real tan so they can still burn from UV ray exposure.

Franchise Loan Proposal for a Tanning Salon Franchise

There are a number of sections required in creating your loan proposal document. There is a summary of the request, which simply summarizes The Summary of Request section is similar to an executive summary in a business plan. A person should have a good idea of your entire proposal after reading the summary. It is best to write the Summary of Requests last in order to include all the information necessary.

Borrower’s history is another section that needs to be in your franchising loan proposal. This section will contain a short description of the franchise you are purchasing as well as your own business history. You should also mention how you will build on past success to guide your future success.

The Market Data section of the franchising loan proposal should include an overview of industry trends, assessment of competitors, market size and potential, advertising strategies and an industry trend overview. The beauty of owning a franchise is that the franchise corporation should have this information completed already. Your franchise company will provide you with these facts and figures so you can then pass it along to the bank.

Another section in your franchise loan proposal should be a site analysis. This section will contain information about the chosen location’s parking situation, traffic issues, lease agreements and any other useful information about your location.

Marketing and Promotional Strategy is a key section to be included in your proposal. Advertising can make or break a business so this section needs to be impeccable. You need to think about how you will promote your franchise and drive customers to your store. Most franchises will require some amount of local advertising so you will need to include that information here. You will be working on promoting an already familiar brand since you are purchasing a franchise, which will only help you.

Financial Information is another key section in your franchising loan proposal. The franchise you will be purchasing should provide you with past financial statements dating back at least two years, which you need to include here. You will also be required to provide your personal income statements and tax returns so the bank can check your credit history. A statement of projected cash flow is also an important component to include in this section. If all of this seems foreign to you, visit your accountant or hire an accountant to guide you through this section.

The last section should be Schedule and Exhibits, which is similar to an appendices section of a business plan. These documents all prove that what you are saying is real and you have the documents to prove it. You should include all signed documents from your franchise, your resume, any marketing documents, facts or figures your franchise provided you and any other document that you think might help you case or is important for the bank to see. When in doubt, include the document in this section.

Remember that by preparing this proposal, it does not entitle you to a loan. This is just a way to get your foot in the door. You need to really believe in what you are doing, your abilities and the franchise concept you will be adopting.

Tanning Bed Pricing

20 minute tanning time – 28 High Powered Phillips 100 Watt tanning lamps (14 in the canopy and 14 in the bench)
Tanning bed costs approximately $3,000

20 minutes tanning time – 32 High Powered Bronzing 100 Watt tanning lamps (16 in the canopy and 16 in the bench) Tanning bed costs approximately $5,000

15 minute tanning time – 36 High Powered 100 Watt Reflective BRONZING lamps (18 in the canopy and 18 in the bench) Tanning bed costs approximately $5,500

12 minute tanning time – 20 High Powered BRONZING 160 Watt Reflective tanning lamps in the canopy and 20 100 Watt tanning lamps in the bench
Tanning bed can cost $6,500

12 minute tanning time – 20 (2 meter) High Powered 180 Watt Reflective tanning lamps in the canopy and 20 (2 meter) High Powered 120 Watt Reflective tanning lamps in the bench
Tanning bed costs approximately $9,500

Are Tanning Beds Healthy?

This debate has been waging for years amongst scientists.  However, the public does not seem to care much as they continue to patronize their local tanning salon.  Some scientists feel that any sun is bad sun.  While others, like Dr. Berwick (2001) believes that sun tanning gives the body much needed Vitamin D which is activated in the skin through sunlight.  Exposure to ultraviolet rays has also been said to help reduce psoriasis pains.

Sun tanning is bad when you burn, however when your skin tans at a slow rate it is actually the body’s way of protecting itself.  By forming a nice base tan the skin is less likely to burn and therefore less likely to experience the harmful effects of the sun. So if avoiding sun burns is the way to make tanning healthy, then tanning beds seem to be a perfect solution.

Developing skin cancer or melanoma takes 20-30 years of over exposure to the sun.  Therefore the cases of melanoma of today were caused back in the 1970’s before tanning beds became popular.  The number of deaths related to non-melanoma skin cancer has decreased 1,200 to 1,500 per year over the past 10 years (Berwick, 2001).  The FDA also has admitted that it has never been shown that sun tanning has caused a person to have deadly skin cancer.   

Sunlight has been said to help produce more energy for people and improve their lung and heart functioning, while a lack of sunlight can lead to depression or what is known as the “winter blues.”  In short, everything in moderation is okay, sun tanning included.  Always protect yourself against getting sun burns and only sun tan in moderation.

Here are some quick benefits of sun tanning:

• Reduce Stress by decreasing adrenaline levels and releasing endorphins.
• Reduce/Eliminate Seasonal Affective Disorder also known as  the “Winter Blues”
• Reduce Psoriasis Effects
• Clear up some acne as exposure to UV rays can help clear the skin

Lease Your Tanning Salon Equipment

Tanning beds can cost up to $25,000 per bed depending on the quality, which can really drain a tanning salon of its cash flow.  This is why many tanning salons choose to lease their equipment. 

By leasing tanning equipment, the tanning salon can also save their credit to use in an emergency situation, instead of taking out a loan to buy an expensive tanning bed. 

There is also a tax advantage for leasing tanning equipment.  Salons who lease their equipment are allowed to write off the rental payments, which is more attractive than the depreciation tax cuts for owning tanning equipment. 

Tanning Industry Trends

The tanning industry has more that doubled over the past 10 years.  It is estimated that 30 million Americans visited a tanning salon.  In 2004, the Tanning Industry grew to an approximately $5 billion dollar industry from its humble $900 Million annual sales in 1991.  This growth is attributed to Americans being concerned about their appearance and their health. 

Although some experts say that indoor tanning is harmful, many believe that indoor tanning is a safe way for people to tan without burning.  Tanning Salons have their employees trained to identify skin types and how their skin will react to the Ultra Violet light so they can teach people how to avoid sun burns. 

Sun burn prevention outdoors is much more difficult than indoors due to uncontrollable variables.  In theory, tanning indoors will be the same amount of UV light every time.

How to Choose the Best Location for a Tanning Salon ?

Many wise people have said that the most important thing when opening a business is location, location, location! This old adage is still true today as location is a key success factor in operating a tanning salon. Most tanning salon franchises will help you in determining the perfect location for your shop.

However, it is important to note that climate does not seem to be a factor. People in cold locations want to stay tan and benefit from the UV rays benefits. People in warm weather also want to stay tan but do not have the time to sunbathe for 4 or more hours.

The other location factors are things such as population demographics, what type of businesses are around, the traffic on the street you are located and much more. There is so much to consider when choosing the perfect location, which is why many people buy a tanning salon franchise. The tanning salon franchise corporation provides help that can make the location decisions much easier.  They have a proven formula for selecting the best locations as well as other factors.

Better Tanning Business, H2O is the Way to Go

There are an estimated 25,000 tanning salons nationwide, yielding nearly $2 billion dollars in sales per year in the US alone. However, even in “sunshine” states like Florida and California, tanning salons are still booming industries with an appeal that seems to be a never ending successful venture.

So what is the secret to starting one of these cash-cow businesses? Where do you start? How much will it cost for start up, and then yearly expenses? But most importantly…how do you reach customers and make yourself more attractive?

Perhaps all you need is vision, drive, initiative and a little creativity to get you started running a franchise or self-owned tanning salon…and it may be just as easy as a breath of air.

Sometimes a “gimmick” is all you need to get going; something fun and exciting that your average strip-mall tanning salon won’t offer. Still can’t guess? Think H2O.

Patte Purcell, owner and founder of The Oxygen Experience can attest to the benefits of simply adding oxygen to your tanning services. Her patented oxygen bar system is ideal for tanning salons, not only to provide aromatherapy services, but also as a tanning aide. Studies have proved that oxygen helps to produce melanin in your skin cells by 10% or more, leading to a darker and safer tan without the risk of burning.

Not only will your customers flock to this new tanning experience, but you will reap in the benefits as well. At an average charge of $1 per minute of oxygen use per customer, your revenue build up could be endless—and without taking up extra space, time, or payroll. According to Purcell, studies have shown that revenues for businesses using The Oxygen Experience have nearly doubled—simply because they provide a useful service that no one else has!

Furthermore, this kind of service will promote repeat customer base that is more valuable than any kind of advertisement or promotion. By offering something different from any other tanning salon (like an oxygen bar) you will separate yourself from the rest and find people coming back for more.

Sometimes, the biggest leap of faith in starting a new business, and especially one as popular as tanning salons is to simply have a good idea. Investments, advertising, staffing and legal issues are also a concern for many trying to start a new business, but finding something new and exciting to offers customers can be priceless.

Still have questions about opening your own tanning salon? Read some of our other articles for tips, inspirations and real life testimonials from people that have been there, done that and much much more!

Frequently Asked Questions