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Tan Republic Franchise Costs $97K – $439K (+ 2024 Profits)

Tan Republic is a prominent franchise in the tanning industry, known for its unique approach to offering tanning services. Founded in 2005 by Lance and Kristina Donnelly in Salem, Oregon, Tan Republic quickly differentiated itself in the market.

By 2008, the company had expanded its operations to include franchising, beginning on February 21 of that year. The company’s headquarters remains in Salem, Oregon, signifying its deep roots in the area.

Tan Republic is the largest tanning salon franchise on the West Coast and has been expanding its presence across various states including Oregon, Washington, Idaho, Nevada, and California. Tan Republic stands out in the competitive tanning market through its “Bronze Without Borders” membership model, which allows customers to use any Tan Republic salon with one package, enhancing convenience and accessibility.

Initial investment

Type of ExpenditureAmount
Initial Franchise Fee$5,000 – $25,000
Utilities Deposits and Payments$0 – $1,000
Furnishings$2,000 – $5,000
Fixtures$2,000 – $5,000
Equipment (including Tanning Beds; Spray Tanning or Skin Care, and Spa Equipment)$50,000 – $300,000
Computer Hardware and Software, Scanner, Digital Camera and Closed-Circuit TV Advertising and Security System$1,500 – $5,000
Signage$2,000 – $15,000
Franchise Premises Rent and Buildout/Leasehold Improvements (deposit & 3 months)$6,000 – $15,000
Washer, Dryer and Start-up Equipment$500 – $2,000
Inventory (including lotions, materials, towel and supplies)$2,500 – $5,000
Employee Wages (3 months)$12,000 – $24,000
Initial Advertising and Promotion$2,500 – $5,000
Travel and Living Expenses While Training$500 – $2,000
Insurance (year)$1,000 – $5,000
Miscellaneous Opening Costs$1,000 – $5,000
Additional Funds – 3 Months$10,000 – $20,000
TOTAL$97,000 – $439,000

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Franchise fees & Royalties

Initial Franchise Fee

The Initial Franchise Fee ranges from $5,000 to $25,000, depending on specific franchise circumstances.

Royalty Fee

The Monthly Royalty Fee is calculated as 5.75% of the total Gross Revenue.

Marketing/Advertising Fee

A Monthly Advertising Fee equal to 1% of the Gross Monthly Revenue is charged, along with a Local Advertising Requirement of 2% of the Gross Revenue each month.

Transfer Fees

The Transfer Fee, when selling a franchise, can go up to $5,000 to cover legal, accounting, and investigation expenses.

Renewal Fees

A Renewal Fee of $1,000 is required to cover out-of-pocket costs concerning the renewal of the franchise agreement.

Franchise pros and cons

The Pros:

  • Site selection and construction: Tan Republic assists its franchisees with site selection guidance to locate a viable site in terms of traffic and competition. It also aids in the design and construction of their salons, as well as lease negotiations.
  • Pre-opening training: Tan Republic provides its franchisees with extensive training to equip them with salon operations and management skills, as well as customer service and HR best practices. It also prepares them for a successful grand opening.
  • Passive investment: The brand allows for absentee ownership opportunities. Franchisees can operate their salons alongside other obligations and day jobs.
  • Exclusive territory protection: The franchisor grants its franchisees the right to operate their salons in an exclusive market. It does not allow other franchises or competitors to operate units in the designated location.
  • Multiple opportunities: The brand allows its franchisees to build new salons or convert their existing salons into Tan Republic salons. This allows them to lower the development costs and scale their franchises into multiple units.
  • Marketing support: Tan Republic helps its franchisees with marketing and advertising techniques through national media, regional advertising, ad templates, email marketing, SEO, and targeted local salon campaign tools and programs.
  • Financing assistance: The franchise offers its franchisees in-house financing assistance to fund their equipment and payroll. Also, it has relationships with third-party lenders to fund qualified franchisees for the franchise fee, startup costs, and ongoing costs.
  • Extensive corporate and ongoing support: The management team offers its franchisees growth strategies such as getting access to successful business partners, proprietary software, a franchisee intranet platform, periodic field operations, and performance reviews.

The Cons:

  • Not a home-based opportunity: The franchise cannot be operated from home or a vehicle. Franchisees must have a retail facility, warehouse, or office space.
  • Lack of global presence: The chain does not have locations outside the USA. Franchisees may have difficulty breaking into new markets.
  • Competition from other tanning salons such as The Tanning Spot and Palm Beach Tan to name a few.

How to open a Tan Republic franchise

1. Initial Research and Inquiry

  • Gather information: Start by learning about Tan Republic and the franchise model they offer. Understanding the brand’s values, services, and franchise structure is crucial.
  • Contact the franchise: Reach out to Tan Republic through their franchise inquiry process. This usually involves filling out a form on their website where you provide your contact information and express your interest.

2. Review Franchise Disclosure Document (FDD)

  • Obtain the FDD: Once your initial inquiry is received and if you meet the basic requirements, Tan Republic will provide you with their Franchise Disclosure Document. This document contains critical details about the franchise opportunity.
  • Legal review: It’s advisable to have a lawyer review the FDD with you. They can help you understand the obligations, fees, and legal implications of becoming a franchisee.

3. Financial Assessment and Approval

  • Financial qualifications: Ensure you meet the financial requirements for opening a franchise, which includes having a certain amount of liquid capital and overall net worth.
  • Approval process: Submit your financial documents to Tan Republic for approval. This may include your credit history, bank statements, and additional financial disclosures.

4. Training and Site Selection

  • Training programs: Participate in training programs offered by Tan Republic. These programs are designed to equip you with the knowledge and skills to operate a franchise successfully.
  • Selecting a location: Work with Tan Republic to find a suitable location for your salon. The franchise team will assist in evaluating potential sites to ensure high traffic and profitability.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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