Palm Beach Tan


Ray Harrigill owns six Palm Beach Tan locations in Mississippi.
Source: David Johnston Photography
Ray Harrigill owns six Palm Beach Tan locations in Mississippi.
Description: Indoor tanning salons
Owners: Ray and Monica Harrigill
Years in business: 10
No. of franchises owned: 6
Start-up costs: $502,660 to $810,320; $250,000 liquid assets, $500,000 net worth
Franchisor fees: $30,000; Royalties phased in from 4% to 6% over three years; national marketing 2% of gross sales; local marketing 3.5% of gross sales
2015 revenue, 2016 projection: $4.2 million, same level of revenue expected in 2016
2016 projected annual growth rate: Undisclosed

Ray Harrigill believes in franchising, but he believes in diversification even more. Among his franchise holdings: Bumpers Drive-In restaurants, Massage Envy and, for the last 10 years, Palm Beach Tan, of which he owns six locations in the Jackson, Mississippi, metro area.

Additional franchisee resources

His introduction to the concept came about in the late 1990s when he also owned four franchised Blockbuster video stores. The video rental chain eventually closed most of its stores, and most of the franchisees followed suit. But an executive Harrigill knew from the company went on to join Palm Beach Tan and called him several years later. "I was looking for something to replace the Blockbuster business, and I liked the membership model of Palm Beach Tan," Harrigill said. "It was an annuity-like revenue stream every month that I found very attractive." Clients pay a monthly membership fee ranging from $19.95 to roughly $84.95 for a sunbed tan. The number of visits is unlimited, and the price varies by the amenities chosen. Palm Beach Tan also offers sunless spray-tan memberships starting at $30 per month.

With decades of franchising experience, he advises others interested in this business model to interview the prospective franchisor and as many active franchisees as possible. "Listen carefully to their answers," Harrigill said. "Only enter a system that is growing and one where franchisees want to open additional units."

Make It

Latest Special Reports

  • CNBC's annual study measures all 50 states on more than 60 different metrics.

  • A look at 50 private companies set to reshape the business landscape.

  • Aerial view of containers and cargo ships at the Port of Los Angeles on Jan. 19, 2022 in San Pedro, California.

    In an era of rapid technological advances and demographic change, how do legacy companies adapt, innovate and evolve? CNBC Evolve features iconic global companies and executives who are embracing change and transforming for the future.