Industry Description

Indoor Tanning

SIC

7299 - 44

Days Open

7 Days ­ 81 Hours

Year Established

11/03

Hours of Operation

9 ­ 10 M-F; 10-6 Sa, Su

Years Owned

Since 11/03

Full-time Employees

0

Part-time Employees

8

Other Notes

Working Owner increases profitability by $8 / hr.  50 hrs/wk = + $21k net

Hours/wk by Owner

0

Owners Duties

Oversight/Training

Skills / Licenses Req¹d

None

Training Offered / Cost

2 Wks. @ 40 hrs.

Non-Compete Terms

3 Yrs. 5 Miles

Exec. Summary

This is an extremely high end salon, with the best equipment and client base.  The

owner has given the utmost attention to detail in every aspect of the salon¹s design, layout and marketing strategy.

Lease / Bldg. Info.

-

Monthly Rent

$4,367

Lease Commenced

11/03

Deposit

TBD

Lease Expires

11/13

Term & Option

10 Yrs / 5 Yrs

Bldg./Area Description

Commercial/Residential

Square Footage

1,588

Seats, Pkg, Zoning, etc.

Salon is located near major hotels and housing complexes.  Owner has fantastic

Marketing agreement s with nearby 24 Hour Fitness, Hotels and major employers. 

Reason for Sale

Personal Reasons

Financial Summary

Projected Annual

2003 / Owner to Prove

2002 / Owner to Prove

Gross Revenue

$289,015

Salon Opened 11/03

Salon Opened 11/03

COGS

$11,196

Rent / CAM

$52,404

Payroll

$33,696

(owner wkg. 0 hrs/wk.)

Net Profit (before tax)

$97,225 (Owner 0 hrs)

(Avg. below Projections)

Discretionary Cash

$117,771 (Owner 50 hrs)

(Avg. below Projections)

Expense Breakdown

Net Asset = $228k ($70k in Beds; $158 Build Out); Bed Lease Liabilities = $147k

Included in Sale

Assets

Liabilities

FF&E Included

$373,000

Lease Obligations (Beds)

$5,000/mo (~ 2.5 yrs)

Inventory Included

$1,000

Debt Included

$0

Other Assets Included

Other Liabilities

$0

Working Capital (not incl)

Return on Sale Price

Asking Price

$360,000

Owner Financing/Terms

OWC 20%, 24 mo. 7%

Earnest Money Dep.

$30,000

Down Payment

$288,000 (OWC $72k)

Opportunity Summary

Headline

High End Orange County Tan Salon

Summary

This high end salon, established in 11/03, has had the utmost attention to detail given in its development.  The Salon boast a total of 10 brand new beds, including a Mystic Tan, a Stand up unit, and 8 other top of the line beds offering 4 different pressure tans.  Average price per tan equates to over $20, with the average transaction size at over $100.

Facilities / Assets

This salon is housed in a 1,600 square foot facility with monthly rent of $4,370 on a ten year lease.  Approximately $375k in net assets are included in the sale, including $70k in equity in the beds, and $150k+ in the build out.  Major liabilities include the outstanding bed leases of approximately $5k / month, over the next 2.5 years (approx.) 

Competition

While Orange County is considered an extremely competitive indoor tanning market, few firms offer the level of beds and service that this salon offers. 

Growth Potential

This salon has been open less than 6 months, and continues to grow dramatically.  The owner already has highly coveted marketing alliances in place with many nearby businesses, gyms, hotels, etc. that are just beginning to pay major dividends. 

Other