Independant vs. Franchise

dm95630 · 07-26-2005, 10:27 PM

I am currently researching the benefits of opening a salon. Other than this fine forum, does anyone have some ideas where I can do some research?

Also, can someone please provide me with some pros and cons for entering an agreement with a franchise vs. opening an independant store. Thanks in advance.

candie · 07-27-2005, 01:32 AM

With a franchise, you get a little bit of security, but you don't make the majority of decisions. What you think might be right for your salon, the franchise manager may disagree and leave you in the dumps. I have never ran a franchise, so I might be wrong, but I feel an independently owned salon is the best way to go . This way you can upgrade and run the business the way you want to and they way you KNOW will bring in clients. You also don't get all the profits from a franchise and if you are running the place, why not do it your own way? If you do your research you will find, depending on your location, that privately run business do much better profit wise than franchise...unless you are in the food industry, of course, lol.

Luke Skywalker · 07-27-2005, 08:49 AM

Franchise = they control what beds you use, what lotions you sell and who to buy them from (usually the franchisor), what else you can sell, how you sell it and you pay them big bucks plus at least 6% of your GROSS for them to limit you. If you fail you can try to sell your franchise, but the franchisor will most likely step in and resell it and make even more money from your location. You could try and go independent, but it is very expensive to break a franchise agreement. There is an advantage with co-op advertising.

Independent= YOU decide what beds to buy, what lotions and extras to sell and you decide who to buy them from, how to sell them and you don't pay franchise fees. You don't have to pay that up front franchise purchase price and you don't pay weekly or monthly franchise fees. If you don't succeed you can sell the place or dispose of the equipment without someone looking over your shoulder.

May the Force be with you.

river_brat · 07-27-2005, 02:31 PM

one word....royalties. BAH Go independant.

BigLeo · 07-28-2005, 08:53 PM

Gentlemen, gentlemen, it starts with talking with the franchisees. Find out everything you can about the Franchise. How is the training, support with problems, marketing and promotions support? Is there regular communication with the franchisor? How often does the franchisor meet with the franchisees. What are their strong points, weak points. You should also talk with the franchisor, and if possible meet them at their facilities, and find out as much as you can about their style of doing business, quality of management, knowledge and so forth. The successful frachises are managed well and they have their franchise formula down to a T. The longer a franchise has been in business the more likely it is that they will have all the pieces in place. Remember, it is about reducing your risk. Going it alone has some advantages, but when you need help, you are on your own. I would definitely recommend a franchise for those without prior tanning salon experience and those who lack management, marketing, administration and operations skills. This is where joining a franchise operation really pays off. there is no need to be afraid of a franchise. Don't believe all the bullcrap that is posted here. Most of the people here on Tantalk have a built-in bias against franchises because they believe that paying a royalty is like some payoff or something. Just look at the successful franchises that are out there. They are in business and growing faster than the entire industry because they know what they are doing. The franchisors are passing this knowledge and experience to their franchisees and tis makes for a stronger organization. Just my opinion.

caribbeansun01 · 07-29-2005, 12:04 AM

IMO, the only good thing about a franchise is the recognition you will have with the public. The public sees another "franchise salon" go up, they recognize the "franchise name" and they will tan there. If you are independent, you have to work your tail off to convince tanners that you are better than the franchises. If you are up for the challenege of the later, go for it. We are independent and enjoy the decision making we have. Our tanners are able to enjoy specials we are able to put out there, but sometimes it just doesn't compete with the franchises. You have to weigh your options carefully. Have an accountant and lawyer on your side to help you decide.

Luke Skywalker · 07-29-2005, 05:05 PM

To notorious Big and Carib, True, Franchises do research and come up with formulas. Where do they get this info? There were many very successful independent salons operating for a long time that the franchises took their ideas from. Franchisors are salespeople friends, listen to them and they will give you their spiel and spin it their way.

No matter how you look at it the franchisee pays for marketing etc. through the up-front purchase price and monthly franchise fees. Big, you say the longer the franchise has been around the more likely they will have it together. Or not. KFC still sells chicken no matter how you wrap it. A franchise is only as good as the franchisors it can attract and KEEP.

To recommend that those who don't have experience seek a franchise leaves the ignorant open to being trapped in a franchise agreement they may not want over time. If they don't have good business instincts in the first place, buying a franchise will not make them a good business person.

Many people buy franchises because they think the name recognition will guarantee them success and franchisors will feed that thought. The truth is and I speak from experience, having had a dilithium mining franchise on hilarious 7, (fictious name to protect the innocent, ME) If you aren't good at business you wont be good at business, franchise or otherwise. And if you are good at business you will keep more $$$ for yourself without the franchise.

So if you have good business sense and you can do research on franchises, you can also research the business and do it yourself without the encumbrance of a master/slave relationship holding you in a stagnant position. Your opinion that lack of business experience should guide someone to a franchise, because it will pay off is a red herring in the tanning industry.

To buy a McDonalds franchise you have to have at least $1,000,000 bucks just to start talking to them. The return on investment, gross, from tanning even in the largest markets, and most of us are not in the largest markets, is well below the 500K a year mark per store. Correct me if you have other figures. And out of that you have your over head which leaves your net at 100K maybe. The ROI in the tanning business just dosen't justify big $$ investments for name recognition reasons.

The franchisors did not invent the tanning business they exploit it. They take what works from the best independents and call it their formula and sell it to uninformed, and as you say Big, inexperienced people. So you are saying that franchises are full of inexperienced business people following a formula developed by successful independent salon owners over years of actual experience and filling the pockets of the franchisors. Which is ok, that is the American way. Can't knock it if it works.

Just look at the franchises that have failed out there. And the franchisees that have been sued by the franchisors over franchise agreement violations. But when one fails there is another inexperienced person looking for a way to make a buck and believes as you do that you need a franchise to do it.

Until someone finds a body part left on one of the franchise beds and sues them for all they got. (That was a joke for those of you who are humor impaired. Franchises have their place, just not across the street from mine. The main reason most of us on Tan Talk have a dislike for franchises, or bias if you will is that we work hard for the money and it hurts our business when TanFranChise opens in our range of customers knocking down prices, giving away tans, and devaluing our product. But who in the Force is really safe eh? Some really sharp independent can open across the street from the best franchisee and roll some meteriods their way too eh?

The only strong organization I want is a united tanning industry doing national advertising to promote the industry as a whole.

JMHO May the Force be with us all and to all a good evening.

Jeni and Mike · 07-29-2005, 07:01 PM

Give Dana a call, she will help you out.

http://www.hottiebodytan.com/franchise.shtml

OASIS BEACH · 07-30-2005, 01:53 AM

Yep, what BigLeo said.

Luke Skywalker · 07-30-2005, 02:36 PM

O B one can no be, you must own a franchise. May the franchise fees be with you, oops they go to the franchisor. Much success anyways. Its the debate that matters. what are your feelings OB? Big said his piece don't just agree, add something.

Has anyone seen my light sabre?

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07-26-2005, 10:27 PM	#1 (permalink)
dm95630 Join Date: Jul 26 2005 Posts: 1 Rep Power: 0	I am currently researching the benefits of opening a salon. Other than this fine forum, does anyone have some ideas where I can do some research? Also, can someone please provide me with some pros and cons for entering an agreement with a franchise vs. opening an independant store. Thanks in advance.

07-27-2005, 01:32 AM	#2 (permalink)
candie Waiting Confirmation Join Date: Jul 13 2005 Posts: 30 Rep Power: 0	With a franchise, you get a little bit of security, but you don't make the majority of decisions. What you think might be right for your salon, the franchise manager may disagree and leave you in the dumps. I have never ran a franchise, so I might be wrong, but I feel an independently owned salon is the best way to go . This way you can upgrade and run the business the way you want to and they way you KNOW will bring in clients. You also don't get all the profits from a franchise and if you are running the place, why not do it your own way? If you do your research you will find, depending on your location, that privately run business do much better profit wise than franchise...unless you are in the food industry, of course, lol.

07-27-2005, 02:31 PM	#4 (permalink)
river_brat I love Derf!! Join Date: Apr 1 2004 Location: WEST COAST Age: 28 Posts: 1,573 Rep Power: 5	one word....royalties. BAH Go independant.

07-28-2005, 08:53 PM	#5 (permalink)
BigLeo Join Date: Jan 27 2005 Posts: 243 Rep Power: 4	Gentlemen, gentlemen, it starts with talking with the franchisees. Find out everything you can about the Franchise. How is the training, support with problems, marketing and promotions support? Is there regular communication with the franchisor? How often does the franchisor meet with the franchisees. What are their strong points, weak points. You should also talk with the franchisor, and if possible meet them at their facilities, and find out as much as you can about their style of doing business, quality of management, knowledge and so forth. The successful frachises are managed well and they have their franchise formula down to a T. The longer a franchise has been in business the more likely it is that they will have all the pieces in place. Remember, it is about reducing your risk. Going it alone has some advantages, but when you need help, you are on your own. I would definitely recommend a franchise for those without prior tanning salon experience and those who lack management, marketing, administration and operations skills. This is where joining a franchise operation really pays off. there is no need to be afraid of a franchise. Don't believe all the bullcrap that is posted here. Most of the people here on Tantalk have a built-in bias against franchises because they believe that paying a royalty is like some payoff or something. Just look at the successful franchises that are out there. They are in business and growing faster than the entire industry because they know what they are doing. The franchisors are passing this knowledge and experience to their franchisees and tis makes for a stronger organization. Just my opinion.

07-29-2005, 12:04 AM	#6 (permalink)
caribbeansun01 I love Derf!! Join Date: Dec 2 2004 Location: Depew, NY Posts: 1,679 Rep Power: 8	IMO, the only good thing about a franchise is the recognition you will have with the public. The public sees another "franchise salon" go up, they recognize the "franchise name" and they will tan there. If you are independent, you have to work your tail off to convince tanners that you are better than the franchises. If you are up for the challenege of the later, go for it. We are independent and enjoy the decision making we have. Our tanners are able to enjoy specials we are able to put out there, but sometimes it just doesn't compete with the franchises. You have to weigh your options carefully. Have an accountant and lawyer on your side to help you decide.

07-29-2005, 05:05 PM	#7 (permalink)
Luke Skywalker Waiting Confirmation Join Date: Jan 21 2002 Posts: 77 Rep Power: 0	To notorious Big and Carib, True, Franchises do research and come up with formulas. Where do they get this info? There were many very successful independent salons operating for a long time that the franchises took their ideas from. Franchisors are salespeople friends, listen to them and they will give you their spiel and spin it their way. No matter how you look at it the franchisee pays for marketing etc. through the up-front purchase price and monthly franchise fees. Big, you say the longer the franchise has been around the more likely they will have it together. Or not. KFC still sells chicken no matter how you wrap it. A franchise is only as good as the franchisors it can attract and KEEP. To recommend that those who don't have experience seek a franchise leaves the ignorant open to being trapped in a franchise agreement they may not want over time. If they don't have good business instincts in the first place, buying a franchise will not make them a good business person. Many people buy franchises because they think the name recognition will guarantee them success and franchisors will feed that thought. The truth is and I speak from experience, having had a dilithium mining franchise on hilarious 7, (fictious name to protect the innocent, ME) If you aren't good at business you wont be good at business, franchise or otherwise. And if you are good at business you will keep more $$$ for yourself without the franchise. So if you have good business sense and you can do research on franchises, you can also research the business and do it yourself without the encumbrance of a master/slave relationship holding you in a stagnant position. Your opinion that lack of business experience should guide someone to a franchise, because it will pay off is a red herring in the tanning industry. To buy a McDonalds franchise you have to have at least $1,000,000 bucks just to start talking to them. The return on investment, gross, from tanning even in the largest markets, and most of us are not in the largest markets, is well below the 500K a year mark per store. Correct me if you have other figures. And out of that you have your over head which leaves your net at 100K maybe. The ROI in the tanning business just dosen't justify big $$ investments for name recognition reasons. The franchisors did not invent the tanning business they exploit it. They take what works from the best independents and call it their formula and sell it to uninformed, and as you say Big, inexperienced people. So you are saying that franchises are full of inexperienced business people following a formula developed by successful independent salon owners over years of actual experience and filling the pockets of the franchisors. Which is ok, that is the American way. Can't knock it if it works. Just look at the franchises that have failed out there. And the franchisees that have been sued by the franchisors over franchise agreement violations. But when one fails there is another inexperienced person looking for a way to make a buck and believes as you do that you need a franchise to do it. Until someone finds a body part left on one of the franchise beds and sues them for all they got. (That was a joke for those of you who are humor impaired. Franchises have their place, just not across the street from mine. The main reason most of us on Tan Talk have a dislike for franchises, or bias if you will is that we work hard for the money and it hurts our business when TanFranChise opens in our range of customers knocking down prices, giving away tans, and devaluing our product. But who in the Force is really safe eh? Some really sharp independent can open across the street from the best franchisee and roll some meteriods their way too eh? The only strong organization I want is a united tanning industry doing national advertising to promote the industry as a whole. JMHO May the Force be with us all and to all a good evening.

07-29-2005, 07:01 PM	#8 (permalink)
Jeni and Mike Join Date: Nov 3 2002 Posts: 277 Rep Power: 6	Give Dana a call, she will help you out. http://www.hottiebodytan.com/franchise.shtml

07-30-2005, 01:53 AM	#9 (permalink)
OASIS BEACH Join Date: Mar 23 2004 Location: Florida Age: 46 Posts: 405 Rep Power: 5	Yep, what BigLeo said.

07-30-2005, 02:36 PM	#10 (permalink)
Luke Skywalker Waiting Confirmation Join Date: Jan 21 2002 Posts: 77 Rep Power: 0	O B one can no be, you must own a franchise. May the franchise fees be with you, oops they go to the franchisor. Much success anyways. Its the debate that matters. what are your feelings OB? Big said his piece don't just agree, add something. Has anyone seen my light sabre?

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