Palm Beach Beauty & Tan Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$648,453 - $1,131,247
Franchise Fee
$5,000
Total US Locations
650
Business Summary
Palm Beach Beauty & Tan Locations offer tanning products, services, and accessories, along with certain spa-related products and services. These locations feature tanning beds, sunless self-tanning booths that apply tanning solutions to the skin, and infrared saunas for mental and physical well-being. Palm Beach Beauty & Tan Locations are designed to appeal primarily to men and women aged 18 to 54 with various income levels.
Corporate History
Palm Beach Tan Franchising, Inc. was incorporated in Delaware on June 21, 2001, and began offering franchises for 'Palm Beach Tan' locations on July 26, 2001. Initially, these locations did not feature infrared saunas. The company's ultimate parent, Palm Beach Tan, Inc., a Texas corporation, has been operating its own 'Legacy Locations' since July 1990. Palm Beach Tan Franchising, Inc. itself does not operate any locations. In November 2008, an affiliate acquired Planet Tan Management I, LLC, which operated 16 'Planet Tan' salons. This affiliate later merged into the parent company, which now owns and operates these 'Planet Tan' locations, primarily in Dallas/Ft. Worth. Some 'Planet Tan' locations have converted to 'Palm Beach Beauty & Tan' locations, with the remaining few expected to convert soon. Palm Beach Tan Franchising, Inc. no longer offers new franchises under the 'Legacy Brand' but anticipates that existing 'Legacy Locations' will convert to 'Palm Beach Beauty & Tan' locations by December 31, 2025.
Financial Overview
Investment Range
$648,453 - $1,131,247
Franchise Fee (Low)
$5,000
Franchise Fee (High)
$30,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$243,028
Equipment Costs (High)
$531,231
Working Capital
$60,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Palm Beach Tan Franchising, Inc. has received an unqualified audit opinion, indicating that its financial statements present fairly in all material respects. The company's assets are pledged as collateral for a bank loan and line of credit held by its parent company, with an outstanding balance of $26,250,000 as of December 31, 2024. Additionally, Palm Beach Tan Franchising, Inc. has recorded significant uncertain tax liabilities, amounting to $1,727,825 in 2024, which are expected to continue increasing until fully resolved with taxing authorities. These liabilities relate to income tax positions in jurisdictions where its franchisees operate.
Financing Details
Palm Beach Tan Franchising, Inc. does not offer direct financing to its franchisees, nor does it guarantee any notes, leases, or other obligations. However, the franchise has an agreement with ApplePie Capital, Inc. (APC) that may allow qualified Palm Beach Beauty & Tan franchisees to obtain financing from APC and its network of lenders. The terms of any such third-party financing are not standardized. Franchisees are not obligated to pursue financing through APC, and Palm Beach Tan Franchising, Inc. does not receive any compensation for these financing referrals.
Performance Metrics
Total US Locations
650
Franchised Units
397
Corporate Units
253
Avg Square Footage
2,400
Franchising Since
2001
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
1
Litigation Summary
Palm Beach Tan Franchising, Inc. was involved in one notable legal action: Sunless, Inc. v. Palm Beach Tan, Inc. and Palm Beach Tan Franchising, Inc., filed on January 17, 2022, in the United States District Court for the Northern District of Ohio. The plaintiff, owner of Mystic Tan trademarks and supplier of tanning booths and solutions, alleged false designation of origin, false advertising, and unfair competition. These claims stemmed from allegations that Palm Beach Tan falsely rebranded Mystic Tan Kyss spray tanning booths as 'Sunscape' and advertised them under that name without authorization. Palm Beach Tan counterclaimed for common-law fraud and for the cancellation of Mystic Tan's trademark registrations for tanning salon services due to non-use and abandonment. This lawsuit was consolidated with another case, Sunless, Inc. v. Palm Beach Tan, Inc., et al., filed January 29, 2021, though Palm Beach Tan Franchising, Inc. was not specifically named in the consolidated case. A confidential settlement was reached between the parties in September 2024, resulting in the dismissal of all claims by both sides.
Bankruptcy History
Palm Beach Tan Franchising, Inc. has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Palm Beach Beauty & Tan franchise, franchisees must notify Palm Beach Tan Franchising, Inc. in writing between six and nine months before their initial 10-year term ends. They are required to refurbish, repair, or replace all equipment, tanning beds, computer systems, signs, and decor items to meet the then-current brand standards, completing these upgrades before the renewal term begins. Franchisees must also be in good standing, meaning they have no defaults under their agreements with Palm Beach Tan Franchising, Inc. or its affiliates, and have paid all outstanding monetary obligations. Additionally, they must have the right to possess their location premises for the renewal term or secure an approved new site. A renewal fee to cover administrative expenses, including legal and accounting fees, is required, along with the signing of a general release of claims against Palm Beach Tan Franchising, Inc. and its affiliates. Franchisees must also comply with current qualification and training requirements.
Training & Support Program
Franchisor Assistance
Before opening, Palm Beach Tan Franchising, Inc. helps with site selection by providing guidelines and evaluating proposed sites, including an on-site visit for the first location at no extra charge. They also provide prototypical architectural and design plans, access to operations manuals (electronically), a list of approved suppliers, and an initial training program for the Operating Principal, General Manager, and Location Manager. Pre-opening training, consisting of 2 days on-site and 3 days off-site, is provided for the first location. After opening, Palm Beach Tan Franchising, Inc. offers ongoing assistance including inspections and evaluations of operations, administration of advertising funds and cooperatives, and provision of local advertising materials. They also provide operational advice, System merchandise and decor items (at a reasonable cost), updated approved supplier lists, and additional/remedial training programs (potentially for a fee). Electronic fund transfer (EFT) services for customer accounts are also provided for a fee.
Initial Training Hours
145
Training Location
Our office in Irving, Texas, and/or other location we designate
Ongoing Support
After opening, Palm Beach Tan Franchising, Inc. provides ongoing support to its franchisees. This includes periodic inspections and evaluations of their operations to ensure compliance with standards. The franchisor also administers an advertising fund and any authorized advertising cooperatives, providing local advertising materials. Franchisees receive advice and written materials with techniques for managing and operating their Palm Beach Beauty & Tan locations, including new developments and improvements to equipment and products. At the franchisor's discretion, System merchandise and decor items are made available at a reasonable cost, along with updated lists of approved suppliers. Additional and remedial training programs may be offered, potentially for a reasonable fee plus reimbursement of expenses, depending on personnel availability. Electronic fund transfer (EFT) services are also provided for customer accounts, for a fee.
Franchise Requirements
Ideal Candidate Profile
Palm Beach Tan Franchising, Inc. seeks franchisees who will designate an Operating Principal with an ownership interest and decision-making authority, and whom the franchisor approves. This Operating Principal, or an approved General Manager, must dedicate their full time and best efforts to fulfilling the franchise's obligations under the Development and Franchise Agreements, avoiding any conflicting business activities. They must also meet the franchisor's training requirements and other standards.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Full-Time
Territory Type
Non-Exclusive
Staff Count
8
Territory Size Requirements
Palm Beach Tan Franchising, Inc. will grant franchisees a Territory under the Development Agreement, which is determined before signing based on market and economic factors. These factors include market demographics, the penetration of Palm Beach Tan Locations and similar businesses, the availability of appropriate sites, and growth trends in the market. The Territory for a Palm Beach Tan franchise may be all or a portion of a city, a single or multi-county area, or some other area, and will be specifically described in Attachment D to the Development Agreement.
Staffing Notes
Palm Beach Tan franchisees must designate an approved Operating Principal who has an ownership interest and will devote full-time and best efforts to managing the business. Alternatively, a General Manager can be designated, also required to devote full-time and best efforts, with the Operating Principal remaining fully responsible for their performance. Additionally, a Location Manager must be designated at least 60 days before opening, also required to devote full-time and best efforts to the day-to-day operations of the Palm Beach Tan Location. The estimated payroll for pre-opening training in Item 7 suggests a typical staff of 8 employees, comprising 4 full-time (including the store manager) and 4 part-time employees. All designated managerial personnel must successfully complete initial and any additional training programs required by Palm Beach Tan Franchising, Inc.