Palm Beach Beauty & Tan
Bottom line
- Total investment $648K – $1.1M including a $30K franchise fee.
- Average unit revenue of $497K/year (median $468K). Estimated payback in 7.4 years.
- Rated MODERATE with a risk score of 62/100.
- No protected territory and the franchisor reserves the right to compete in your area. Clarify territorial boundaries before signing.
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Palm Beach Beauty & Tan unit return on the cash you put in?
Unlevered ROIC · per unit
12%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Palm Beach Beauty & Tan units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.5M
on $7.5M purchase
Total debt
$6.0M
SBA $3.7M + senior + seller note
Overview
About
Franchisees operate beauty and spray tanning salon locations, managing daily client appointments, tanning booth/spray tan services, retail product sales, and staff scheduling. Revenue is primarily derived from tanning memberships, day passes, spray tan services, and ancillary beauty/lotion products.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 4 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Declining system with unresolved litigation history, unprotected territory, escalating fees, and missing financial transparency creates meaningful investment risk in a mature beauty/tanning market.
Score breakdown · what drove the 62 / 100 rating
- 01MINORDeclining unit count (-0.3% YoY) suggests system contraction and potential market saturation in beauty/tanning segment
- 02HIGH2.5-year litigation with competitor (2022-2024) over IP/rebranding creates brand uncertainty and suggests operational/marketing vulnerabilities
- 03MINORNo protected territory exposes franchisees to direct competition from other Palm Beach Tan units and cannibalizing same market
- 04MINOREscalating royalty structure (4%→5%→6%) reduces profitability over time; at 6% royalty on $496K avg revenue = $29.8K annual ongoing fees
- 05MINORItem 19 (Financial Performance) absent — cannot verify if average revenue/net income figures are representative or survivorship-biased
- 06MINORHigh initial investment range ($648K-$1.1M) paired with modest net income ($121K avg) yields 5-9 year breakeven horizon with unprotected territory risk
- 07MEDConfidential settlement terms unknown — potential undisclosed operational or rebranding requirements could impact franchisee costs/liability
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
100 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Palm Beach Beauty & Tan · FDD (2025) PDF