Do You Want To Supersize That Tan?

Do You Want To Supersize That Tan?

First made popular by fast-food restaurants, franchising is moving into a new arena--the world of indoor tanning. With the creation of a number of corporate chains and nationwide franchises, this trend toward identical salons with recognizable features, equipment and accessories may prove the industry is moving toward a more professional look and attitude.

Fast Tan--No Drive-Thru

The indoor tanning industry has gone through many changes in the last 10 years. Weathering many adversities, indoor tanning has built a loyal following through the generations--seeing people from their teens to their 80s enjoying the appearance of golden brown skin.

Now the industry is taking a step in another direction. The success of the industry has encouraged businesspeople from all walks of life to invest in salons--bringing operational expertise to what was previously a group of "mom-and-pop" operations. The new key words of the industry are professionalism, business acumen and innovation.

These changes also have led to the creation of "mega-salons." Franchises and large corporate operations are bringing brand recognition and customer loyalty to the industry, expanding and building on a salon's clientele and reputation to lead the industry to a new level.

Doing it the Corporate Way

Many independent salons now find themselves competing not with the idea of multiple salons, but with the idea of larger salons--those with 20 to 50 beds, extensive advertising and a brand name.

One of the largest salon "chains" in the Dallas-Fort Worth area is Palm Beach Tan, with 19 locations. When President Troy Cooper acquired the operation in 1996, there were only six salons; however, with the recognizable look and the company's customer service reputation, the corporation grew steadily and continues to grow.

"We usually look for salons that are trying to get out of the business, work a deal with the owners and take over--keeping a standing customer base while adding customers through our own name recognition," Cooper says. Due to its success, the company currently is deciding whether to franchise its business plan or continue with the corporate salon advantage.

"Chains have distinct advantages even a successful, hands-on salon owner does not have, like more money for growth, marketing and advertising," Cooper says.

Name and brand recognition are big business, there is no doubt. After all, who doesn't recognize the "golden arches"? That type of "Mac land" recognition is what makes people start going to a chain salon, yet operations must still be professional and well-organized to keep them.

"People like the advantages of a chain. They can sign up in a salon near their house, yet go to a salon near their business or near their gym," Cooper says. "Customers know what they will see when they go in--from what kind of equipment the salon will have to the lotions we carry to the service they will receive--all from the sign on the front of the salon."

Cooper believes there are three things that make corporate salons--or franchises--the future of the indoor tanning industry: advertising clout, standardization of services and set hours.

"A lot of my experience comes from the video industry," says Cooper, who owned a video franchise corporation before making the jump to indoor tanning. "I see what happened in the video industry in the 1980s happening to the indoor tanning industry now. A few very large chains are taking over the smaller stores; however, that does not mean well-run, professional, independent salons will go under--they will always be around."

Other corporate salons also are doing well in the new, bigger-is-better world of indoor tanning. Tanning Bed L.L.C. President Daniel Humiston now operates 16 salons in cities throughout New York, quite a jump from the two-bed salon he started in 1985.

"There was no such thing as a tanning superstore when I started in the indoor tanning industry," Humiston says. "Now, we are one of the most successful corporate salon chains in the industry."

Humiston believes franchising his salons would be more of a change than is necessary--working under the adage, "Don't mess with a good thing."

"Franchising is a whole other business, not another aspect of an already successful salon corporation," Humiston says. "As I see it, it doesn't make sense to get into another business when yours is successful."

Tanning Bed starts each of its salons from scratch and works on the understanding that volume is the key to success.

"Though it may not be popular to say in today's indoor tanning industry, we deal in volume--get the tanner in and get them out, the more the better," says Humiston. "Of course, we have to have well-trained employees and great customer service with our theory of business or no one would return."

To make sure every customer's experience is a pleasant one, Humiston has worked with software specialists to create a specially-designed computer program that tries to eliminate the risk of high-volume tanning error. In addition, the salon works with new lamps in every bed every 200 hours and no upgrading.

"I don't think there is a limit to where we could go," says Humiston. "Our growth has been great so far and with our controlled approach, there is nothing that could get in the way of us opening salons in other states or countries.

"Right now, however, I would rather stay with the 20 stores that really are profitable rather than expand to 100not-so-profitable salons."

A Store on Every Corner

Expanding into different arenas is not as hard as many people in the indoor tanning industry believe. With the right information and the right attitude, franchises that currently are working within one state are researching and realizing the dream of a cross-country "McDonald's of Tan."

Wayne Smeal, president of Executive Tans, a franchise based in Wheatridge, Colo., took his former job as a regional sales manager with Kellogg's Corp. and worked that experience into the salon business when he purchased his first salon in 1991.

"It may sound like a strange combination but by doing co-op advertising between the two companies, I was able to pay off my salon in three months and increase my sales for Kellogg's," Smeal says. By 1994, he had 10 stores up and running, with seven of the salons licensed as Executive Tans, when he decided it was time to franchise. Currently, he has 23 franchises in Colorado with his eye on 13 other states.

"Without a good owner, it doesn't matter how well-designed a program is on paper," Smeal says about the secret to franchising. "We choose our owners carefully and give them the tools to build a successful program."

In addition, Executive Tan tries to choose individuals who have a common thread--a dream--and the faith to make things happen. The training program made for the salons has worked with a diverse group of owners; however, Smeal recognizes that not everyone can handle the principles on which franchising is based.

"People have to have many strengths to be in franchising," he says. "The relationship is a partnership--not only with the person franchising the operation but also with the other stores within the franchise. People must be compatible with the business to survive."

Smeal believes the indoor tanning industry is ripe with possibility if people choose to work hard and pay attention to the future of the industry.

"We walk everyone through the process of creating the salon, negotiating with the landlords, buying equipment and their first week of business," Smeal says. "But we cannot make them good owners if they do not have the drive and the attitude to be good owners."

There are many different ways to decide to franchise--from starting a salon from scratch with a particular company to converting an already existing, successful salon into part of a franchise. For many owners who like their current location, yet are interested in a larger market, working to create an "existing franchise" may be just what the doctor ordered.

"We worked from the idea that formed Midnite Sun--the first coast-to-coast indoor tanning chain--in the 1980s," says Leif Vasstrom, president of Solar Planet, a nationwide chain based in San Francisco. "When we launched Solar Planet in 1995, our goal was to improve on the Midnite Sun concept. Today, the gross profit of Solar Planet salons has quadrupled."

Vasstrom says Solar Planets revolve on one of the most basic principles--education. The QDM model is used at Solar University--a week-long course created by the company that contains information on tanning and responsibility, as well as business.

"We believe the tanning industry is stable with a bright future," says Vasstrom. "That is why we can make more money with a six- to eight-room salon than some people make with 20 rooms."

With 15 salons currently in operation, Vasstrom sees new recruits every day--including salon owners who want to change their current salon into a Solar Planet.

"Some of our newest stores were the most dominant salon in their area," he says. "Now we teach them how to increase their capital without expanding or drastically changing their salon."

Other franchises, larger franchises, have changed the way indoor tanning is viewed. Providing tanners a recognizable business from state to state is giving industry insiders peace of mind on the future of the industry.

"We started business in 1996," says Nancy Price, vice president of sales for Planet Beach, a franchise based out of New Orleans. "Now we have more than 70 stores nationwide and in Canada."

The Planet Beach franchise was built on the "gym" theory--the idea that people pay monthly fees for daily use and have no appointments for less hassle. The theory has worked and currently the only problem within the Planet Beach organization is weeding through applicants.

"People see how Blockbuster and Starbucks have grown to be worldwide names in video and coffee," Price says. "Then they see the future of the indoor tanning industry and its projected growth and naturally put the two together."

Price says applicants for Planet Beach are selected and go through a financial and a personal profile. Those who make the cut are put into the company's training program. Thereafter, the company is available for any questions and concerns from the owner. With private-label equipment, bulbs and lotions, all business necessities are available from the company; however, Price says the Planet Beach organization also listens to its franchisees for new ideas and insight.

"Right now, we have a general fax that goes out regularly; however, we will soon implement a computer network that will allow us to communicate by e-mail, as well as view records and transactions of any salon," Price says. "It is just another way we can do quality control, helping our franchises stay successful."

Other organizations are deciding to expand as well. Fabutan, the largest chain in Canada, now is looking at expanding not only in the north but also south of the border, in the United States.

"We started in Edmonton, Canada and now have grown to 98 locations," says Marla Pavletic, director of marketing for the company. "We are growing fast, but it has been working so well we figure why stop?"

Fabutan also makes applicants go through a heavy initiation period and training before opening a salon. They want to guarantee the owner's success and, in turn, guarantee their own success.

"We do continuous training throughout the year and President Doug McNabb does sales seminars and visits throughout North America," Pavletic says. "We want to ensure our franchisees are always developing their skills and knowledge regarding the indoor tanning industry."

Pavletic says the strong brand awareness in Canada has presented Fabutan with many of its applicants; however, a company Web site has attracted people outside the industry.

"Our owners are across the board--some are tanners, some are new to the industry," she says. "We are in the process of registering our franchise in the United States because of the demand we have received."

The Legal Know How

Franchising--even creating a tanning corporation--is not easy. It requires a lot of information on state and federal regulations (franchises are under the advisement of the Federal Trade Commission), as well as information on how the company will be created, how it will grow and how the company will work well into the future.

Cheri Cosgrove, president of Tan World, a franchise based out of Sioux City, Iowa, says there was never any doubt her organization would franchise--especially after she was approached on a regular basis by clients wanting to own and operate their own salon.

"People already believed we were a franchise," she says. "After we opened our second location within a year of the first, we started to look for a good franchise attorney to help us spread our success."

Currently, Cosgrove has nine salons in her chain, but more are on the drawing board for this year and next.

"In the eyes of the law, it was easiest to draw up the documents and have everything that looked like a franchise labeled a franchise," Cosgrove says. "Now that we have opened so many in such a short time, I feel we are ready to move into different states."

Most franchise owners stress that a good attorney and a true franchise plan are two of the most important aspects of any organization. Though some have built quickly while others have started their expansion slowly, most of the owners interviewed could not stress enough the importance of training and a good, legal set of rules, regulations and restrictions.

Todd Beckman, president and chief executive officer of St. Louis Tan Co., agrees that having a franchising contract means less hassle for both the franchise and the franchisee.

"Licensing agreements are very simple and very vague," he says. "Having a franchising agreement settles all the questions right away and keeps the owners and the franchise happy."

Beckman says one of the keys to franchising--consistency--cannot be secured with a simple licensing agreement. Regulations on such issues as which equipment can be used or which lotion is right for the chain's image can all be dealt with in a franchising agreement.

"We want our stores to be, and remain, exclusive," Beckman says. "Only by making sure they are all the exact same design, the exact same color with the exact same equipment and accessories can we make sure our name is being properly represented."

The Future of the Industry

Many owners and operators worry that by incorporating or franchising salons, the industry will become so cookie-cutter it will lose its close ties to customers and, in fact, may hinder the industry's growth.

However, Cooper, who has been through the franchising of the video industry, believes that the chain salons and franchises can guarantee the industry a place in the "serious" category of future businesses.

"The fact that people believe in the industry enough to create larger salons and the chains of salons show the industry is becoming more focused and more stable," Cooper says. "That is good for everyone--from the small neighborhood salon to the 50-bed chain in the largest city."