Franchising

Consumers are increasingly brand driven. They associate McDonald’s with burgers and Dunkin’ Donuts with fresh pastries and coffee because the products and brands have been ingrained into their routines and psyches. Franchises are brand driven to appeal to this need for quality and consistency. This branding concept has grown the popularity of franchises, which account for 35 percent of all retail and service revenue in the U.S. economy, according to www.franchising.com.

For Americans, business ownership is a more attractive option than climbing the corporate ladder in someone else’s company. With ownership comes the American Dream of control, the potential for better financial compensation and a feeling of personal accomplishment. While many tanning salon owners have found success starting their own facilities, others have succeeded by identifying and growing an existing winning formula such as a franchise.

Let’s face it, owning and operating a salon in today’s economy is no easy task and requires a substantially larger start-up investment than it did 30 years ago.

Over the past eight years the number of tanning salon franchises has grown, providing a branded image for tanning in many cities nationwide and a way for outside professionals to enter the industry with an action plan and support.

According to the International Franchise Association (IFA), franchises play a significant role in growing the U.S. economy and are an important aspect of the service industry, including indoor tanning salons. New concepts are being added with increasing frequency, and over the past three years almost 900 franchise concepts went into business overall.

Defining Franchising

Although often associated with fast-food restaurants, franchising encompasses numerous business concepts from advertising/direct mail to construction to dating services to home inspection to security systems to video sales and rentals. Printing and copying services, maid services, computer services, cleaners, lawn care services, real estate, hotels and motels, and travel agencies are excellent examples of successfully applying franchising to established industries.

As defined by the IFA, franchising is a method of distributing products or services. At least two levels of people are involved in the franchise system—the franchisor, who lends its trademark or trade name and a business system; and the franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor’s name and system.

Technically, the contract binding the two parties is the franchise, but that term often is used to mean the actual business that the franchisee operates. Franchising basically is signing up with a company that gives all of its years of experience the day the franchisee salon opens.