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Glo Tanning
How much does Glo Tanning cost?
Initial Investment Range
$462,299 to $917,650
Franchise Fee
$37,000 to $47,000
You will operate a tanning salon featuring tanning services, tanning equipment, skin care products and beauty products, together with related services, products, merchandise, and accessories.
Enjoy our partial free risk analysis below
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Glo Tanning December 16, 2024 FDD Risk Analysis
Free FDD Library AI Analysis Date: July 16, 2025
DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.
Franchisor Stability Risks
Start HereDisclosure of Franchisor's Financial Instability
High Risk
Explanation
The franchisor’s audited financial statements for the year ending December 31, 2023, reveal a members' equity deficit of ($240,084). This negative net worth is a significant indicator of financial weakness. It suggests the company's liabilities exceed its assets, which could potentially impact its ability to provide long-term support, invest in the brand, or withstand economic challenges. The company also has a large liability of $354,015 due to a related party, indicating dependency.
Potential Mitigations
- A franchise accountant should thoroughly analyze the franchisor’s complete financial statements, including all footnotes and the auditor's opinion, to assess its viability.
- Discuss the franchisor's plan for achieving profitability and positive equity with your business advisor.
- Your attorney can help you inquire about whether the franchisor has been required by any state to post a bond or escrow fees due to its financial condition.
High Franchisee Turnover
High Risk
Explanation
While the turnover tables in Item 20 do not show high numbers of terminations or non-renewals, a significant risk is disclosed in the text: "In some instances, current and former franchisees sign provisions restricting their ability to speak openly about their experience with us." This is a major red flag, as it can suppress negative information and impede your ability to conduct thorough due diligence by speaking with former franchisees. This limits your ability to verify system health.
Potential Mitigations
- Your attorney should discuss the implications of this "gag clause" disclosure and the challenge it presents to due diligence.
- It is critical to contact a wide range of current franchisees listed in Item 20, as they may be more able to speak freely.
- Ask the franchisor directly why such provisions are used, with guidance from your business advisor.
Rapid System Growth
High Risk
Explanation
The franchise system is experiencing extremely rapid growth, expanding from 5 franchised outlets at the start of 2021 to 48 by the end of 2023. While growth can be positive, such a fast pace can strain a franchisor's resources. This is particularly concerning given the franchisor's negative equity position, as disclosed in Item 21. This combination may compromise the quality and availability of training, site selection assistance, and ongoing operational support for all franchisees.
Potential Mitigations
- A business advisor can help you question the franchisor about its plans to scale its support infrastructure to match unit growth.
- Speaking with franchisees who have opened recently can provide insight into the current quality of support.
- Your accountant should review the franchisor's financials to assess if they have the capital to support this expansion.
New/Unproven Franchise System
High Risk
Explanation
GLO Tanning Franchise LLC (GTF) is a very new franchisor, formed in September 2020 and beginning to offer franchises that same month. An unproven system carries higher risks, including the possibilities of an unrefined business model, underdeveloped support systems, and minimal brand recognition. The long-term viability and profitability of the franchise model have not yet been demonstrated over a significant period, which increases your investment risk.
Potential Mitigations
- Extensive due diligence is critical; engage a business advisor to research the founders' track record and the system’s early performance.
- Your attorney should help you speak with the earliest franchisees to learn about their experiences and the system's evolution.
- An accountant can help you assess if the franchisor is adequately capitalized to support its initial growth phase.
Possible Fad Business
Medium Risk
Explanation
The indoor tanning industry is mature and faces significant headwinds, including public health concerns about UV radiation and increasing government regulation, such as the 10% federal excise tax mentioned in Item 1. Consumer preferences may also shift towards other beauty or wellness services. A business tied to such an industry may face a risk of declining long-term demand, which could impact your profitability and the future viability of the business model.
Potential Mitigations
- Work with a business advisor to research long-term consumer trends and the regulatory outlook for the indoor tanning industry.
- Question the franchisor on their strategies for adapting to changing consumer preferences and mitigating regulatory risks.
- Investigate the performance of non-tanning services and products within the system to assess revenue diversification.
Inexperienced Management
Low Risk
Explanation
This risk was not identified in the FDD Package. The franchisor's key executives, as described in Item 2, appear to have significant prior experience in the tanning industry, including owning and operating multiple salon locations for many years before starting the franchise. Inexperience in franchising or the underlying business can lead to poor support and strategic errors. It's always crucial to verify the quality of support with existing franchisees.
Potential Mitigations
- A business advisor can help you vet the backgrounds of the entire management team, not just the top executives.
- You should still ask current franchisees about the quality and effectiveness of the management team's support and guidance.
- Your attorney can help you understand if there are any key-person clauses in the agreement that protect you if experienced managers leave.
Private Equity Ownership
Low Risk
Explanation
This risk was not identified in the FDD Package. There is no indication in Item 1 that GLO Tanning Franchise LLC (GTF) is owned or controlled by a private equity firm. The franchisor appears to be owned by its founders. Private equity ownership can sometimes lead to a focus on short-term profits over the long-term health of the franchise system, potentially impacting franchisee support and satisfaction.
Potential Mitigations
- Your attorney can help you verify the ownership structure of the franchisor through public records.
- A business advisor can help you research the background of the owners to identify any affiliations with investment firms.
- It is wise to ask the franchisor directly about any plans for a future sale of the company.
Non-Disclosure of Parent Company
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 1 discloses the existence and role of the affiliate, Glo Tanning Centers, Inc., which owns the intellectual property and operates corporate stores. When a franchisor is a subsidiary, the financial health of a parent company can be critical, and its non-disclosure would be a significant concern. In this case, the key affiliate relationship appears to be disclosed.
Potential Mitigations
- Your attorney can help confirm the corporate structure and ensure all relevant entities are disclosed.
- An accountant should review the disclosed relationship with affiliates for any potential financial risks.
- When analyzing the financials, consider the inter-company debts and revenues between the franchisor and its affiliates.
Predecessor History Issues
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 1 of the FDD explicitly states that the franchisor has no predecessors. A predecessor is a company from which the franchisor acquired the major portion of its assets. A history of predecessors could introduce risks if, for example, the predecessor had a history of litigation or bankruptcy that could affect the current franchise system.
Potential Mitigations
- It is still a good practice for your attorney to perform a public records search on the franchisor's principals to see their prior business history.
- A business advisor can help you research the history of the brand itself, even if there is no formal corporate predecessor.
- Asking early franchisees about the history of the system can sometimes reveal information not present in the FDD.
Pattern of Litigation
Low Risk
Explanation
This risk was not identified in the FDD Package. Item 3 of the FDD states that no litigation is required to be disclosed. A pattern of litigation, especially lawsuits brought by franchisees alleging fraud, misrepresentation, or breach of contract, is a major red flag indicating systemic problems. The absence of such disclosures is a positive sign, but should be verified through franchisee interviews.
Potential Mitigations
- Your attorney can conduct independent searches for litigation involving the franchisor or its principals as a precautionary measure.
- When speaking with current and former franchisees, it is valuable to ask about any legal disputes they are aware of, even if not disclosed in the FDD.
- An accountant should still review the financial statements for any notes related to legal contingencies.
Disclosure & Representation Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Financial & Fee Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
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Legal & Contract Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Territory & Competition Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Regulatory & Compliance Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Franchisor Support Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Operational Control Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Term & Exit Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
Miscellaneous Risks
Example Risk: Franchisee Financial Obligations
Blue Risk
Explanation
This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.
Potential Mitigations
- Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
- Conduct regular risk assessments
- Implement monitoring and reporting systems
Unlock Full Risk Analysis
Purchase the complete risk review to see all 102 risks across all 10 categories.
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