Tan Republic Franchise Costs, Fees & Owner Salary (2023)

Tan Republic is a tanning salon franchise that has been making strides in the tanning industry since its inception. The company was founded in 2005 by Lance and Kristina Donnelly and is headquartered in Salem, Oregon. They began franchising in 2008, expanding their unique concept of "bronze without borders," which allows customers to use their tanning package at any Tan Republic location.

The franchise has seen steady growth over the years, bringing in other salon chains and establishing itself as a preferred tanning salon brand in various areas. Tan Republic is characterized by its commitment to providing high-quality tanning experiences and fostering a sense of community among its customers. They don’t just view their clients as customers but as a community of friends, enhancing the camaraderie and high-class tanning services the brand offers.

Tan Republic's franchise model allows for flexibility, offering franchisees the option to build new salons or convert existing ones into Tan Republic salons. This approach helps lower development costs and facilitates the scaling of franchises into multiple units. The brand provides substantial support to its franchisees, including marketing support through various channels and tools, as well as financing assistance.

Initial Franchise Fee

The amount varies depending on the population of the franchise territory. For over 30,000 population, it's $25,000; for 15,000 to 30,000, it's $15,000; and for under 15,000, it's $7,500. This fee is paid at the execution of the Franchise Agreement and is non-refundable except in specific circumstances.

Monthly Royalty Fee

A royalty fee of 5.75% of the total Gross Revenue derived from the franchise is paid monthly.

Monthly Advertising Fee

This is set at 1% of the total Gross Revenue derived from the franchise and is also paid monthly.

Local Advertising Requirement

Franchisees are required to spend an amount equal to 2% of their Gross Revenue each month on local advertising.

Transfer Fee

In the case of a franchise transfer, a fee of not more than $5,000 is charged. This fee reimburses legal, accounting, credit check, and investigation expenses.

Renewal Fee

A $1,000 fee is charged for the renewal of the franchise to cover reasonable out-of-pocket costs concerning the renewal.

Tan Republic provides several types of training for franchisees, as detailed in their document:

1. Mandatory Training: This training is provided for the franchisee or the franchise manager at a location designated by the franchisor. It covers various aspects of franchise operation, including financial controls, marketing techniques, service methods, the deployment of labor, and maintenance of quality standards. This mandatory training must be completed to the franchisor's satisfaction at least 2 weeks prior to opening the franchise for business.
2. Supplemental Training: At the time the franchise is ready to be opened, the franchisor provides up to 2 workdays of supplemental training at the franchise premises. This includes assistance with employee training, form use, salon decor, merchandise display, sales assistance, and use of the Operations Manual. The franchisor bears the trainer's expenses for this assistance.
3. Additional Training:Upon request, the franchisor offers additional training at their training center or other agreed locations. This training consists of visits to franchises, work experience, and observation of franchise operations. The duration and content are negotiable based on the franchisee's needs. The franchisee bears all expenses for this additional training.
4. Refresher Training Programs or Seminars: The franchisor may provide these programs periodically and require franchisees and their managers to attend and complete them. These are held at locations designated by the franchisor, without charge for the program, but the franchisee is responsible for all travel and related expenses.
5. Ongoing Operational Training:The franchisor provides ongoing operational training, which is included in the initial franchise fee. This training is mandatory for the franchisee and any designated full-time manager within 60 days of signing the Franchise Agreement.
6. Training Program Schedule:The current training schedule includes various subjects like operations, site selection, point of sale, sales, and marketing training. The training location is primarily in Oregon.

The Tan Republic franchise agreement provides franchisees with a defined franchise territory. While it's not exclusive, the franchisor agrees not to establish or license any other Tan Republic facility or similar competitive business within this territory without the franchisee's prior written consent.

The Tan Republic franchise agreement does not support passive investment. Franchisees, or their majority owners in the case of entities, are required to actively participate in the daily operations of the business. The agreement emphasizes the necessity of hands-on management and involvement in the franchise's day-to-day affairs.