Palm Beach Tan franchise unit economics
Palm Beach Tan franchisees run a tanning and wellness salon averaging 2,667 square feet, selling monthly memberships collected by direct debit alongside sunless tanning, red light therapy and retail lotions. 310 company-owned salons averaged $524,160 of revenue in 2025 with profit of $131,708, and 314 franchised salons averaged $549,415. During the same year the franchisor reacquired 66 salons from franchisees.
- Primary source
- Palm Beach Tan Franchising, Inc., 2026 Franchise Disclosure Document
- Items read
- Items 5 and 6 for fees; Item 7 for cost to open; Item 19 for sales and any profit figure; Item 20 for the location count
- Population
- 314 of 324 locations
- Our calculations
- Marked on the page with an asterisk. Method
- Last reviewed
- 26 September 2026
Disclosure-based. Not a forecast, not an offer to sell a franchise, and not advice.
A full profit line exists for 310 company salons and revenue alone for 314 franchised ones, and the franchised salons bill $549,415 against the company salons’ $524,160. In the same year the franchisor took 66 salons back from franchisees and opened 2 new ones. Both facts belong on the same page, because that company profit line is the only cost structure available and it describes salons the brand chose to own.
- The franchisor reacquired 66 franchised salons in 2025, 17% of the franchised network, against 2 franchised openings.Franchised outlets fell from 397 to 324 while company-owned rose from 253 to 310.
- The median salon's $113,624 of profit becomes $76,606 once royalty and the recurring franchisor fees come off.15.2% of revenue against the 24.0% the profit line shows.
- profit at the 310 company salons runs from $591,370 down to a $140,255 loss.53.9% of revenue at the top and a 72.2% loss at the bottom.
- Franchised salons run 2,328 tanning sessions a month against the company salons' 2,097.11% more sessions at $6.24 of in-store sales each against $7.12.
- Opening costs $755,390 to $1,263,712, of which tanning equipment alone is $272,519 to $509,572.Building work add $250,000 to $400,000 on top.
How much does a Palm Beach Tan franchise make?
The average Palm Beach Tan unit reported $549,415 of revenue in the 2026 FDD, and the median reported $504,916. The brand’s disclosure document puts the profit line at 25.1% of revenue. Fees come off the top first, at about 11.5% of sales across royalty, brand fund and the rest of the stack. Revenue is not income. Rent, wages, cost of goods and the franchise fees all come out before an owner is paid. The figures for the highest-selling and lowest-selling businesses are below.
Top performers
What separates the top Palm Beach Tan performers
Palm Beach Tan publishes one average, $549,415, and nothing else. The gap between its best and worst locations is not in the filing. The middle location sold $504,916. The average was $549,415. More than half the system is below the number the brand quotes.
Decided before you open
- Capacity, fixed at build.Locations run 2,667 square feet. What you can sell is set by the build, and the build does not change after opening.
- What you spend to open.Opening costs $755,390 to $1,263,712, a 1.7× range inside one brand. The high end usually buys more capacity, so the cheapest build is not always the cheapest route to the top band.
Live operating levers
- Members, the operating driver.This model bills on members. The owner watches how many people join, how many cancel, and what a member spends beyond the plan. It is worth watching every week, because by the time it turns up in a monthly close the quarter is half gone.
- Service and retail mix.Attachment rate on retail, and the share of customers on the higher service tiers, lift what each hour earns without adding an hour or a room. It is the only lever that raises the ceiling without spending capital.
- Fees, and where the minimum bites.Fees run about 11.5% of sales. A minimum sits underneath the percentage, so the low-volume location pays the higher effective rate. The brand charges the weakest locations the most. Work out the sales level where the percentage overtakes the minimum and know which side of it you are on, because the answer changes what an extra dollar of sales is worth.
Context you underwrite around
- The reporting screen.314 of 324 locations are behind these figures. Locations open less than the full year, brand-owned, or not meeting the reporting criteria are excluded, as are locations under the brand’s current size standard, so the numbers describe locations that cleared that screen, not the system as a whole.
- What the disclosure leaves out.Item 19 publishes no performance bands, no attainment figure. The brand’s own locations are the only margin signal in the document, and they are run by the people who wrote the playbook.
- What the rest of the category shows.Across the 38 Health & Wellness brands in this library that do publish bands, the top group sells 3.1× the bottom at the typical brand, and a median 43% of locations reach their own average *. Assume a spread of that order here until the franchisor shows you otherwise.
Profit and loss
310 company salons, top to bottom.
| Line | Average | Median | Highest | Lowest |
|---|---|---|---|---|
| Square footage | 2,667 | 2,652 | 6,700 | 1,140 |
| Membership revenue collected by direct debit | $346,488 | $329,039 | $803,867 | $86,668 |
| All other revenue | $177,672 | $164,721 | $496,765 | $39,739 |
| Total sales | $524,160 | $503,288 | $1,300,632 | $126,408 |
| Operating costs | −$392,452 | −$384,967 | −$709,262 | −$196,853 |
| profit | $131,708 | $113,624 | $591,370 | −$140,255 |
| profit as a share of revenue | 25.13% | 24.0% | 53.9% | −72.2% |
As the brand reported it.
A quarter of revenue reaches profit before any franchise fee. 25.13% on average and 24.0% at the median, on $524,160 of revenue and $392,452 of operating cost. That is the cost structure the brand runs itself, on salons averaging thirteen years old in markets it has advertised in for at least four.
The best salon clears $591,370 and the worst loses $140,255. 53.9% of revenue against a 72.2% loss. The loss-making end is a $126,408 salon carrying $196,853 of operating cost. So the minimum is a fixed-cost problem. The equipment, the lease and the staffing of a 2,667-square-foot box arrive whether the sessions do or otherwise.
Membership collected by direct debit is 66% of revenue. $346,488 of the $524,160, and a salon takes three to four years to reach that share. The remaining $177,672 is walk-in tanning, sunless and retail. Two-thirds of the top line is a recurring charge on a card, which is why cancellation rules belong in the Latest tab.
What a franchisee pays on top of that.
| Line | Year 1 | Year 2 | Year 3 onward |
|---|---|---|---|
| Median profit as the brand reported it | $113,624 | $113,624 | $113,624 |
| Royalty (4%, 5%, then 6%) | −$20,132 | −$25,164 | −$30,197 |
| Recurring fees to the franchisor | −$6,821 | −$6,821 | −$6,821 |
| What remains | $86,671 | $81,639 | $76,606 |
| Share of median revenue | 17.2% | 16.2% | 15.2% |
Ours.
The disclosed 24% becomes 15.2% at the mature royalty rate. $113,624 down to $76,606 on the same revenue, and the step from year one to year three costs $10,065 as the royalty climbs from 4% to 6%. Read the profit table as a company salon's result and subtract $37,018 a year before comparing it with your own.
$6,821 a year goes to the franchisor regardless of volume. Six separate monthly charges, every one of them flat against revenue. At the lowest-revenue company salon in the table, billing $126,408, that fixed stack is 5.4% of the top line before the royalty starts.
Fees and what it costs to open
The fee schedule. (Items 5 and 6)
| Fee | Basis | At $503,288 of revenue |
|---|---|---|
| Royalty, months 1 to 12 | 4% of gross sales | $20,132 |
| Royalty, months 13 to 24 | 5% of gross sales | $25,164 |
| Royalty, month 25 onward | 6% of gross sales | $30,197 |
| Advertising fund | 2% of gross sales | $10,066 |
| Local advertising requirement | 3.5% of gross sales | $17,615 |
| Recurring fees to the franchisor | $568.45 a month | $6,821 |
| Required third-party subscriptions | $118 to $135 a month | $1,416 to $1,619 |
| Total at the mature royalty rate | $66,115 to $66,318 | |
| Share of revenue | 13.1% to 13.2% |
Ours, applying the filed schedule; the three royalty figures are the franchisor's own, printed against median sales.
The royalty steps 4%, 5%, 6% across the first 25 months. At median revenue that is $20,132, then $25,164, then $30,197. So the salon pays $10,065 a year more in year three than in year one on identical sales. Build the year-three number into the plan on day one, because the build-up in the fee schedule runs opposite to the build-up in the business.
5.5% of sales goes to advertising, split 2% to the fund and 3.5% spent by you. $27,681 a year at median revenue, with quarterly reporting owed on the local half after the second and fourth quarters. The franchisor’s total assessment is capped at 5.5%, which makes this one of the clearer advertising clauses in the category.
Payment processing costs $0.25 a transaction on top of cost. On a business where 68% of revenue arrives as monthly direct debits, that per-transaction charge scales with the membership base. So a salon built on more members at a lower price pays more processing than one built on fewer at a higher price.
What it costs to open.
| Line | Low | High |
|---|---|---|
| Initial franchise fee | $30,000 | $30,000 |
| Tanning and related equipment | $272,519 | $509,572 |
| Building work | $250,000 | $400,000 |
| Furniture and fixtures | $52,500 | $115,000 |
| Signage, music, security and technology | $18,191 | $39,640 |
| Initial inventory of lotions, solutions and supplies | $17,500 | $18,500 |
| Grand opening, merchandising and marketing kits | $26,000 | $29,000 |
| Professional services, insurance, permits and deposits | $24,180 | $53,500 |
| Training and pre-opening training | $4,500 | $8,500 |
| Additional funds, three months | $60,000 | $60,000 |
| Total | $755,390 | $1,263,712 |
As the brand reported it, except four grouped lines. Are marked *. Signage with the music system, the security and CCTV system, computer hardware and software and the mobile app. Grand opening with the in-location merchandising kit and the local marketing kit. Professional services with insurance, utility deposits and permits and prepaid rent and security deposit. And initial training with pre-opening training.
Equipment and build-out are $522,519 to $909,572 of the total. Between 69% and 72% of the whole budget, and the equipment half of it is a depreciating asset with a service life and replacement lamps to buy. Against average company revenue of $524,160, the low end of that pair is a full year of sales spent before the doors open.
Three months of additional funds is $60,000 at both ends of the range. A fixed figure against a build that swings by half a million, and these salons take three to four years to reach a 66% membership share of revenue. The lowest-billing salon turned $126,408 across a full year, which is $10,534 a month against operating costs that start at $196,853 a year.
Initial inventory is $17,500 to $18,500 and retail sells at $3.41 a session. At franchised session volume that inventory turns into $95,262 of annual retail sales. So the opening stock is roughly ten weeks of retail revenue sitting on the shelf. It is the smallest line in the table and the fastest-moving one.
Sessions & revenue
Franchised salons against company salons.
| Line | Franchised average | Franchised median | Company average | Company median |
|---|---|---|---|---|
| Membership revenue by direct debit | $375,135 | $349,216 | $346,488 | $329,039 |
| All other revenue | $174,280 | $161,969 | $177,672 | $164,721 |
| Total sales | $549,415 | $504,916 | $524,160 | $503,288 |
| Highest total sales | $1,474,039 | n/a | $1,300,632 | n/a |
| Lowest total sales | $179,150 | n/a | $126,408 | n/a |
| Membership share of revenue | 68% | n/a | 66% | n/a |
| Average years in operation | 9.88 | n/a | 13.1 | n/a |
As the brand reported it.
Franchised salons out-bill company salons by $25,255 while running four years younger. $549,415 against $524,160, on 9.88 years of operation against 13.1. Their membership share is higher too, 68% against 66%, and their revenue ceiling is $1,474,039 against $1,300,632. Whatever the company group's profit line shows, the franchised group is selling more.
The lowest franchised salon bills $179,150 and the lowest company salon bills $126,408. Both are a long way under a break-even that has to have $272,519 of equipment at minimum, a 2,667-square-foot lease and a staffed counter. The minimum is the number to plan against, because the disclosed cost structure has its own minimum at $196,853.
Sessions, and what each one is worth.
| Measure | Franchised average | Franchised median | Company average | Company median |
|---|---|---|---|---|
| Tanning sessions a month | 2,328 | 2,160 | 2,097 | 2,032 |
| Highest / lowest sessions a month | 6,229 / 799 | n/a | 4,186 / 717 | n/a |
| In-store sales per session | $6.24 | $6.25 | $7.12 | $6.87 |
| Retail sales per session | $3.41 | $3.33 | $3.44 | $3.29 |
| Sessions a year | 27,936 | 25,920 | 25,164 | 24,384 |
| Sessions a day | 77 | 71 | 69 | 67 |
| Total sales per session | $19.67 | n/a | $20.83 | n/a |
The session and per-session rows are as the brand reported it; the annual, daily and total-revenue-per-session rows are marked *.
A franchised salon runs 77 tanning sessions a day and takes $6.24 at the counter on each one. 27,936 sessions a year producing $174,280 of in-store sales, with $3.41 of that being retail lotions. The rest of the top line ($375,135) arrives by direct debit whether anyone walks in or otherwise, which is the whole reason the membership share matters.
Company salons take 88 cents more per session on 231 fewer sessions a month. $7.12 against $6.24, and 2,097 against 2,328. Closing that 88-cent gap at a franchised salon's session volume is worth $24,584 a year of pure counter sales. Retail is already $3.41 of the $6.24. So the gap sits in lotions and upgrades.
The busiest franchised salon runs 6,229 sessions a month and the quietest 799. Eight times the volume, or 205 sessions a day against 26. At the average $19.67 of total sales a session, that range is $1,281,697 of annual revenue between the two ends of the same brand.
Retail is $3.41 a session, which is $95,262 a year at franchised volume. Lotions and products, sold at the counter to a member who is already in the building and already paying by direct debit. It is the one line here that needs zero extra equipment, zero extra rent and about thirty seconds of a staff member's time.
The network of locations
66 salons went back to the franchisor in one year.
| Year | Franchised start | Opened | Terminated | Left other ways | Reacquired by franchisor | Franchised end | Company end | Total |
|---|---|---|---|---|---|---|---|---|
| 2023 | 348 | 62 | 10 | 2 | 0 | 398 | 257 | 655 |
| 2024 | 398 | 7 | 8 | 0 | 0 | 397 | 253 | 650 |
| 2025 | 397 | 2 | 8 | 1 | 66 | 324 | 310 | 634 |
As the brand reported it.
Two franchised salons opened in 2025 and 66 went back to the franchisor. Franchised openings ran 62, then 7, then 2. Terminations held steady at 10, 8 and 8. The reacquisition line was zero in both prior years and 66 in 2025, 17% of the franchised estate changing hands in twelve months, in a single direction.
The franchisor projects 13 company openings against 6 franchised ones, on zero signed agreements. Which sets the direction plainly for anyone already in the system. Growth is planned on the company side. The company side now holds 310 salons against the franchised side's 324. A year ago that split was 253 to 397.
The company estate closed 27 salons across three years while the franchised estate closed 3. 4, 13 and 10 company closures against terminations of 10, 8 and 8 on the franchised side and one non-renewal each in 2023 and 2025. The brand closes its own salons at a rate its franchisees have stayed well clear of.
What territory you get.
There is zero exclusive or protected territory. You select a site inside a Designated Area, and the franchisor may solicit and accept business from consumers inside that area with zero compensation to you. A development agreement is the only route to protection, and it lasts for the term of that agreement alone.
You may serve customers only from the approved site, and online selling outside the area is barred. The agreement prohibits soliciting or accepting business from consumers outside the Designated Area by any means, naming the internet, catalog sales, telemarketing and other direct marketing. Retail lotions at $3.41 a session stay a counter business by contract.
Relocation needs written consent and is permitted on application where you lose the site through circumstances outside your control. Given a build of $250,000 to $400,000 and equipment of $272,519 to $509,572, the lease term and the renewal option are worth as much negotiating attention as the rent.
Questions we get asked
Questions owners ask.
What should a salon be billing?
The 314 franchised salons open the whole of 2025 averaged $549,415 with a median of $504,916, ranging from $179,150 to $1,474,039. The 310 company-owned salons averaged $524,160 with a median of $503,288, ranging from $126,408 to $1,300,632. Membership collected by direct debit is 68% of franchised revenue and 66% of company revenue. A salon takes three to four years to reach that share.
What does the cost structure look like?
Costs come from the company-owned group alone. On average those 310 salons carried $392,452 of operating costs against $524,160 of revenue, leaving profit of $131,708, or 25.13%. The median was $113,624, or 24.0%. The range runs from $591,370 to a $140,255 loss. Those costs cover product, salaries and commissions, supplies, replacement lamps and acrylics, repairs, rent and utilities, advertising, insurance, card processing and technology. But exclude every fee a franchisee pays. Is why a franchisee's comparable figure at median revenue is $76,606 at the mature royalty rate.
What does the brand cost in total?
Royalty at 4% of gross sales for the first twelve months, 5% for months 13 to 24 and 6% thereafter. A 2% advertising fund contribution. A 3.5% local advertising requirement, with the franchisor's total assessment capped at 5.5%. And $568.45 a month of recurring franchisor fees covering software support, digital support, media, customer experience, applicant tracking and the advisory fund. Required third-party subscriptions add roughly $118 to $135 a month. At median revenue that totals about $66,100 a year, or 13.1% of sales. Opening costs $755,390 to $1,263,712.
How many tanning sessions does a salon run?
Franchised salons averaged 2,328 sessions a month, with a median of 2,160 and a range of 799 to 6,229, about 77 sessions a day at the average. Company salons averaged 2,097. In-store sales beyond the membership run $6.24 a session at franchised salons and $7.12 at company salons, with retail lotions at $3.41 and $3.44. Total sales per session works out at $19.67 and $20.83.
Who does bookkeeping for a Palm Beach Tan franchise?
Two-thirds of revenue arrives as monthly direct debits, which makes this a subscription business wearing a retail storefront, and it changes the close. Membership revenue needs recognizing against the month it covers, with failed debits, declines and reinstatements tracked separately. Because the gap between billed and collected is what actually predicts cash. The counter side needs its own split: tanning upgrades, sunless, red light and retail lotions each behave differently and sit together at $6.24 a session. And the royalty steps from 4% to 5% to 6% at fixed month boundaries, so the accrual has to step with it. Averan provides bookkeeping, controller, and fractional CFO support for franchise owners and has Certified QuickBooks ProAdvisors on the team.
- No cost lines. Wages, rent and cost of goods are not broken out, so margin cannot be rebuilt from the document.
- No range. The filing does not show the highest and lowest locations, so the spread inside the system is unknown.
- No attainment figure. The filing does not say how many locations reached the average it publishes.
Questions worth putting to Palm Beach Tan
The filing answers what it answers. These are the gaps an owner or a buyer should close directly.
- Is the profit figure in Item 19 before or after owner pay, and how many locations sit below it?
- What did the highest and lowest locations sell last year, and what explains the gap?
- How long does a new location take to reach the average you publish, and what does the build-up look like month by month?
- At what level of sales do the minimum charges stop applying and the percentage take over?
- How many Palm Beach Tan locations closed, were sold, or changed hands last year, and why?
Run your own numbers.
The Franchise Finance Diagnostic runs the same checks on your own numbers. It scores where you stand and compares you with Item 19 of your brand’s FDD. It works out what one location earns and spends, and builds a 13-week cash forecast. Checks whether you are ready to open another one. It is free and it runs in your browser.
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