Established in 1991 in Colorado, Executive Tans is a dominant force in the $7 billion indoor tanning industry, with 72 open locations in 16 markets throughout the United States and an additional 31 in development. Attracting men and women alike with a professional, upscale mindset, the fast-growing franchise has tripled its units in the past two years and boosted total sales from about $1 million in 2000 to more than $10 million in 2002.

According to founder and CEO Wayne Smeal, Executive Tans is poised for explosive growth throughout the United States, projecting 300 franchises by 2006. Currently, Executive Tans averages a new salon opening every six days and projects $22 to $25 million in gross revenues system wide for next year. In Colorado alone, Executive Tans has 44 salons in the Denver-metro territory, while its "biggest" competitor has three.

"Our franchise system is as vibrant as the tans we provide our clients," said Smeal, formerly a marketing/sales executive for Kellogg's. "New technology, equipment and knowledge of the health benefits of carefully measured doses of ultraviolet light has brought tanning back with a vengeance. The growth potential of our franchise is astronomical."

In fact, Smeal noted that in 1991, the tanning industry was estimated at less than $1 billion, compared to $7 billion today. About 65 percent of the population is considered potential tanners, he says, and out of that, only 7 to 8 percent are currently tanning. Three years ago, only 4 percent was tanning.

"Indoor tanning is finally becoming mainstream," said Barry Mogler, a managing partner of Executive Tans, noting that approximately 27,000 tanning salons operate today in the United States, in addition to scattered beds in hair and nail salons. "The public acceptance of tanning as a lifestyle, particularly among men, is fueling the industry at insurmountable speed."

The Name Game

If it's true that consumers place a high priority on image and status, then Executive Tans is playing right into their game with an upscale branding approach. Its name and logo intentionally imply the professional, slightly "uppity" image that the chain strives to obtain - and it's working.

"Virtually every tanning salon, whether it's a mom & pop or a franchise, plays on the beachy, tropical feel," Smeal said. "We took a different road by establishing Executive Tans as a sophisticated refuge for busy, tan-starved professionals, or anybody who wants to feel like they're professionals. Our customers pay slightly more for the technology, cleanliness, service and the reputation. They can brag about where they tan - it's definitely a status thing."

Men, the tanning industry's fastest-growing demographic, are a prime target for Executive Tans. In fact, the female-to-male tanning ratio currently stands at 70/30, compared to 90/10 in 1990. At Executive Tans alone, the ratio of female-to-male customers is 60/40.

A Look-Good, Feel-Good Franchise

"We're looking for franchisees who are possibly ex-corporate types, seeking to be in business for themselves, but not by themselves, with a low-investment franchise, in a fun industry," Mogler said. "They need to be personable and have youthful spirit to match that of our clientele."

In addition to being a part of an upbeat industry where customers are always in a good mood, many entrepreneurs are drawn to Executive Tans' unique policy of charging a flat monthly franchise fee of $795 versus a fluctuating fee based on percentage of sales per month. In addition, because it has never had a franchise close down in its 13 years of operation, the Small Business Administration (a lending source) requires new franchisees to put only 15 percent of required capital as a down payment, about $40,000 in most cases.

"With a flat rate franchise fee, franchisees can budget for it, and they don't have to pay us more every time they make more money," Smeal said.

The total capital requirements for an Executive Tans franchise ranges from $200,000 to $500,000 depending on what level salon a franchisee decides to open. Levels range from 12 up to 48 tanning rooms.

Executive Tans franchisees are owner/operators. Most salons employ one full-time sales position and an assistant to take care of laundry, cleaning and directing customer traffic. During non-peak times, one person can usually run the facility, Smeal said. Peak tanning season stretches from February through June. The majority of the franchise's salons stay open late to accommodate the schedules of professional executives.

'Outshining' all others

New Executive Tans franchisees receive extensive classroom training at corporate headquarters in Colorado. Ongoing, they're armed with proven marketing/advertising programs, field support and buying power with industry manufacturers for equipment, tanning lamps and lotions.

Based on industry growth and increasing mainstream social acceptance, Smeal sees a bright future for Executive Tans on all levels.

"We've gone from one market in less than two years ago to 16 markets today, with more than 100 locations nationally," he said. "The industry has gone from less than a billion to more than $7 billion today. Nothing has experienced growth like that except for the Internet. The industry is booming and we are at the cutting edge, with knowledgeable people behind the scenes to drive our franchise system to phenomenal success."

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