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When I toured the franchise headquarters of Hollywood Tans, I immediately awarded them two mental “hoorays!” The first “hooray!” for the unmatched turnkey nature of their franchise concept, and the second for having the good sense not to name their concept after their hometown. “Mt. Laurel Tans,” or even “New Jersey Tans” just doesn’t have the same ring, does it?Regular visits to the tanning salon are now routine for the 28 million who tan indoors each year. In the $5 billion tanning market, Hollywood Tans is recognized for their upscale image, state-of-the-art technology, spray or bake options and attractive, membership-based pricing model.
A factory-direct franchise
To stay on the cutting edge, Hollywood Tans became the only tanning franchise to actually manufacture their own equipment. At their 60,000 s.f. manufacturing plant, Hollywood Tans fabricates the world’s most powerful 360 degree stand-up tanning booths, their
patented HT60 spray tanning booth, and their UV-Free Six-Second Instant Tan Spray booth. As manufacturer, the franchisor provides direct product support and service, discount equipment pricing, guaranteed supply, financing and a lifetime warranty on all their tanning equipment.
Turnkey start-up and advertising
The turnkey nature of their operation doesn’t end with equipment. Hollywood Tans’ millwork division actually builds customized store fixtures for each specific location. When it comes time to open your tanning salon, their truck arrives with everything needed to get you up and running. Hollywood Tans provides total marketing and advertising support. Their marketing department will plan, produce and implement your grand opening promotion and ongoing, market-specific advertising campaigns.
Franchisor-guaranteed lease(!)
Hollywood Tanning Systems, Inc. provides franchise owners with a rare advantage: a corporate guaranteed signature on real estate leases. This can be an advantage when negotiating rent and terms, and seeking financing. If you have strong credit, you may be able to finance up to 85% of your initial investment.
Passive ownership OK
The Hollywood Tans operational system has been designed and refined for simplicity, efficiency and low labor requirements. Unlike many other franchises, Hollywood Tans does not require the franchisee to work full-time in their business. Many franchisees continue to maintain their professional careers and/or other business ventures. Behind its pretty face, Hollywood Tans is a serious franchise company positioned for tremendous growth. They offer real, tangible benefits and are willing to share some risk with franchise owners. There’s a lot more to this opportunity than meets the eye, so I encourage serious opportunity hunters to get more information on franchise opportunities with Hollywood Tans.
Ralph Sr used franchisees advertising dollars to inflate his ego and to unload his dieing business to the new owners. I knew Ralph, I know Jr, Rich, Carol and Carol Sr. I’ve been to his house, etc. Ralph comes across as the greatest guy in the world, he had me fooled for years. Then it happens. His greed and hunger for money takes over. The new owners of HT have been duped by the master. The new HT has made serious cutbacks and layoffs, gone are Ralph’s self serving, ego boosting billboards and TV commercials. Those cutbacks won’t help the franchisees, tanning is a dead industry. They have to fail, just so a few can survive. Ralph’s greed put salons 5 miles from each other. That means you can draw from 2.5 miles. Closer than 5 miles in a lot of markets. More salons = more franchise fees, more booths sold and more advertising money. More salons didn’t really help with royalties, because if a market could generate $350,000 in gross revenue, it didn’t matter if that came from 1 salon or 5, Ralphie still got 7%.
I once interviewed Ralph, Sr. at length at the home office in NJ. He had a very mechanical view of business consistent with his automotive background. He described the HT system almost like describing an engine. Advertising was the fuel and, if the system was set up right in the right location, it would run smoothly and profitably. The human element (customer service, community involvement, etc.) was not a priority.
I’m a marketing guy and a big believer in those things, so it was a foreign philosophy to me.
I sat in on a Discovery Day, and a prospect literally asked: “What do WE do?”
Unfortunately, when the machine is not pumping out profits, it falls to the owners to jump in. I think the system might just not be geared for that – many owners didn’t even live near their salons.
Ht rolled out grassroots marketing idea well after people were into HT advertsiing for alot of money. they didnt have anymore to spend.
Also, the downward turn had alot to do with HT implementing an EFT program, which killed profits.
And caused pricing wars between Ed’s Tanning and HT, which HT could not afford to stay around.
HT got greedy and just wanted to sell more bulbs and create alot of upfront sales to make their company more attractive. I stated this when they rolled out the program and to this day, I believe this had alot to do wtith the demise.
I do agree that even without royalties and ad charges, some stores may still fail. As I stated above, this is because the EFT’s have eroded the little margins these stores were making.
All stores pre 2005 were making money and none went under. It was only afetr the roll out of EFT’s, did stores start to suffer.
The economy is hurting all inductrries as we all know. Has HT reduced lotions, bulbs, allowed to go outside and make purchases? No, because this would make too much sense.
I would suggest anyone who is not making money without paying royalties and ad to HT, should cut their losses.
I understand tehre are some owners who stpped paying HT all together and I dont blame them.
Yes, you should get advise from an attorney as far as becomng independent. I believ HT would allow this if owners assume existing leases with LL’s.
As far as smarketing and advertising in my local area. Yes, I have done everything you could think of and then some.
Also, what does the new and old have anythng to do with the company.
The lawsuit is against individuals who are no longer there, one of whom is no longer living, and a different corporate ownership. That’s relevant to people considering buying the franchise. I’m not saying they’re better or worse, but it’s definitely an important distinction.
The new company has no problem taking in profits and sales and roylaties now.
Why should they have a problem with it? Isn’t that why they’re in business?
If any of you owners are smart enough you wil go independent and let them try to come after you, especially if you signed as an LLC or Corp.
If the owners are smart they will get their legal advice from an experienced franchise attorney before doing anything so brash and self-destructive. Do you think your 2-inch franchise agreement was drafted so franchisees could just walk away?
I would suggest cutting your losses because the industry as a whole is suffering…
I think this raises the real issue. How many of you think you would be thriving if you didn’t have to pay your royalty and ad contributions to Holllywood Tans? Are those fees really the difference between failure and success in your business?
If you would be thriving as Ed’s Tanning, without those fees and with full control of your advertising, then perhaps the blame lies with Hollywood Tans not providing the promised value.
However, if you would still be struggling as Ed’s Tan-O-Rama, then maybe you picked the wrong location, aren’t providing good enough service, are getting beat by the competition, or you chose an industry and a concept vulnerable to downturns in the economy.
I think one of the mistakes HT made was marketing this opportunity to absentee owners and setting the expectation that they didn’t need hands-on owner participation in the community, on-site, etc. As a result, when times got hard the owners have little or no local store marketing understanding, tools or motivation. They also don’t seem to have an understanding that they are responsible for their success in their local market.
My guess is that 80% of your potential customers are within 5 miles of your shop. Why not put your full effort into winning over the necessary customers within that radius, retaining those you’ve got, and re-enlisting those you’ve lost – instead of engaging a legal battle you will lose?
Can you honestly say you’ve done everything in your power to reach every potential customer in that 5-mile radius?
Well Said …fedup! Its great to hear our side from a dissipointed frustrated HT Salon owner.
Sean,
You seem to have a slight stance with HT. Also, what does the new and old have anythng to do with the company. The new company has no problem taking in profits and sales and roylaties now. When you purchase a business you assume the liabilities as well and you cant pick and choose what you don’t want to accept.
This may not have been created by new, but this is no excuse and they should do the right thing and woork with owners.
Everything is so aloof and clandestine by the employees and on some occassions its as if they thin we the owners are a big joke.
Just listen to the way they answer your calls when you call.
If any of you owners are smart enough you wil go independent and let them try to come after you, especially if you signed as an LLC or Corp.
I understand there is a big move going on by owners anyhow and some are owners closing or will close real soon.
Also, I would suggest cutting your losses because the industry as a whole is suffering and the economy is looking bleek for the next two years.
Sean
First H-Tans did lie and were not 100% accurate in the actual $$ needed to open /run or profit. There are plenty of documents I can produce to show how far off they were and plenty of owners willing to speak out if a lawsuit ever happens. Had Hollywood Tans been accurate and showed real numbers to start up run and profit many people I believe would have not bought in. If it ever went to court it isn’t hard to produce documents the HT gave to potential owners that outlined the cost and profit expectations… HT does have a responsibility to be realistic in setting expectations.
In my friend case they were off by about 150k from open to month 3. That IS the responsibility of franchise to know these types of numbers. It isn’t just one case, many owners were shocked to find out how quick the money ran out with no profits to show~ (yet HT still demanding royalties and AD money)
Also HT business model does not support the cost vs profit as proof by many stores closing some not even a year old! I know another owner that Just opened 9 months ago next to a huge GYM and can’t stay open for the simple fact the HT model does not support Hi Rent locations, there is no market strategy and nothing that HT told these people when looking into a HT is even close to what was said. They were deceived. But the question this person keeps asking as the store is losing money is how the mom and pop ones around the area stay open? Simple they don’t have the outlandish charges and cost charged by HT
So tell me then – If it isn’t the franchise fault then why is HT cooperate closing so many stores?! Does that not show that they can’t even become profitable based on the current methods? Out of 5 tanning salons in this area only H-tans shut down. Come on – your smart enough to know that says something. (oh and btw it was cooperate owned for almost a year)
Thanks for pointing that out, Jamie. And thanks for not leaving me here all alone.
It’s important to point out that these allegations do not truly implicate – or reflect on – the current ownership or current practices. The company was sold. One of the main defendants, Ralph Venuto, Sr., passed away earlier this year.
I’m not saying the current ownership is better – or worse – since I don’t know. But Jamie is right to pointing out the time frame.
I also don’t quite get Charles’ gripe… after all he got his money back. But these allegations – if true – lend some credence to his criticism of sales practices back in the old days of HT. They should’ve known better than to provide a video with illegal earnings claims.
After all, that’s what cocktail napkins are for ;)
I wasn’t going to comment any further, but I will point out that the lawsuit that was cited is a year old, and refers to events that happened over 3 years ago, and for what it’s worth EVERY HT employee named in it no longer work for the company (at least one of them is actually deceased). I don’t know the validity of the lawsuit nor do I personally know of any of the former franchisees who filed it, but as to former owners being named in it, HT has been under new ownership since long before the lawsuit was filed, so I don’t see how it all pertains to Hollywood Tans as a franchisor today, which is what I believe the point of this thread was supposed to be.
I’m also confused as to why Charles is still so worked up and determined to predict the downfall of HT. From what I understand, he received a full refund from the new owners of HT for a non-refundable franchise fee he willingly paid to the old owner’s of HT (the one’s cited in the lawsuit). Yes, there are quite a few upset current and former franchisees who have a beef with things that were done by former employees of Hollywood Tans. But there’s also quite a few who are thriving and doing quite well, even in these tough economic times.
Thanks,
Jamie
HERE IT IS … This is just the begining!!!
Read This!!!
Hollywood Tans Franchise Lawsuit Documents
HT is a ripoff and they are doing nothing to help their existing customers save their stores in these tough times. They will not even show up in court for evictions.
Sean,
Have you found out where the HT headquarters will be moved to when their current location is sold? http://www.jcrosspartners.com/plans/11%20Enterprise%20Flyer%2010.3.08.pdf
Crazy wrote: Let’s get real, you pay 34k to join a HT for a success formula,
Crazy: Franchises are not “success” formulas, nor are they magic money machines. You paid your franchise fee and royalties in exchange for the use of the HT’s trademarks, operating system, training, proprietary tanning booths and support services, not for a success system. It’s the franchisees responsibility to build a successful business in the local market.
Read your franchise agreement. You agreed to pay for the use of the system & trademarks whether you were making money or not- and you used them. That’s the deal you signed. It’s not contingent on whether you are successful or not.
I’m not saying the HT trademark is all-powerful or the other stuff you attribute to me. Don’t be Charlie – stick to the facts. The fact is that you blame them for not making you successful. Their job is to deliver what’s in the franchise agreement and offering circular that you signed. Did they do that?
What, specifically, did they do wrong? Are you saying they provided earnings claims before the sale that weren’t disclosed in Item 19 of your UFOC? What were they?
Did you ask for specific assistance or marketing help for your salon that they did not provide?
Did they force you to set prices at levels that weren’t profitable?
More importantly, what did you do to promote and save your salon that worked or didn’t work? Did you do all you could, or did you expect them to do it for you?
My impression of HT is that both FR and Fees seemed to think it was like a vending machine that you placed and expected to ring up sales on its own with little or no involvement in the local community, no grassroots marketing. Perhaps this is the resultof HT selling to remote and/or passive owners. The owners who are actively involved in the business and the community seem to be the exception, not the rule. That’s a detriment when the economy gets tight.
Charlie: The truth is, you never opened nor ran a HT salon. You signed an agreement then backed out on the deal. They took your $34,500 franchise fee? They gave you your franchise fee back. You weren’t even an operating franchisee.
You’ve been ranting about a lawsuit for a year, at least. On Rip-Off Report, on 12/24/07 you wrote: “We are presently working with the firm of Meiselman, Denlea, Packman, Carton & Eberz P.C.” Then, on 1/2/08 you wrote: “We have not retained counsel from Meiselman, Denlea, Packman, Carton & Eberz, P.C. or any other Attorneys as of yet!”
Move on, Charles. Put your energy into your Rose business. Put together a Rose Express franchise and show everyone how to do it right.
Sean Kelly you said:
I heard it was because the franchisees hadn’t paid millions owed to the previous owners for back royalties and merchandise purchases. Most franchise attorneys would have advised the Corp. to put the franchisees in default long before they did. How can you not pay your royalties, and then criticize the franchisor for cash-flow problems.
The reason the owners could not pay royalties was because they did not have any profits to pay anything! Most of all those owners were dumping their own money into the Salon every month to keep them open. So your right there was a cash flow problem, yet HT gave numbers and projections that were so far off from reality that a owner or perspective owner got blindsided. Do you honestly think for one second that owners were making tons of money and just decided not to pay HT? That they spent all their money and because of royalties decided to let HT take stores away from them? You think they didn’t try everything they could, the owners I know tried everything – Htans did nothing. Cooperate found that out when they took over these stores and couldn’t turn a profit themselves and couldn’t afford to keep them afloat and I guarantee they didn’t pay royalties to themselves from these stores and even with that bill gone they closed.
Let’s get real, you pay 34k to join a HT for a success formula, well their formula is way off. You can’t say it isn’t. Cooperate had to close their own salons, that speaks volumes.
Problem is you have placed no responsibility on the franchises having to abide by any standards or to stand by their projection charts, pricing structure or so called advertising. Sorry but they failed and they failed the owners. They claim they have the real estate team ensuring top locations, marketing teams to get the word out they excite owners and show them numbers, I know owners who have struggled since month one and continue to struggle. Again cooperate closed their own stores, great formula. Take all the case studies to an attorney and they would probably advise not buying into one.
HT Corporate actually co-signed the leases of those franchise locations so they would have been stuck with the liability of the closed stores. That’s hardly “stealing” the stores, correct?
They signed the building lease not the loans owners took to open the stores, so an owner takes out a 300k loan to open the store, they make no profits, run out of money, see no advertising, dump in more money to try and make to (laugh) “busy season”. They are short every month but HT doesn’t care they want their money so they kick the owner out. Well guess what the owner has a 3000k loan and the HT cooperate walks in and gets a furnished salon – and the owner is stuck with a loan and no salon– that is stealing. FYI- this didn’t happen to me but it did happen to an owner I know. If It had happened to me I would have fought this thing to the grave.
Also Htans signed the building lease to 1) avoid closeing locations which would look bad (they failed btw) and 2) so when a owner wises up to the failed system of HT the owner couldn’t simply rip down the HT name and put up their own sign. After all the owner has the loan for the stuff
yet continued to use the system, trademarks, etc.
Wow you really don’t get it. There is no value in anything Hollywood Tans. Nobody knows who they are, there are no ads, and the system doesn’t work. Who cares? Four Hollywood tans closed by my area YET there are tanning salons with no major name associated with them still doing business. If the Hollywood Tans trademark is so valuable why isn’t the Hollywood Tans salons still open and the no name independent salons closed?
Ask the owners I bet more than you think would love to give up the Hollywood Tans name, stop buying their overpriced lotions, pay how they want to advertise and start using cheaper better tanning beds. Put that option to each owner. Dream comes true. Hollywood Tans have made nothing of their name or logo
but no one has presented anything specific examples of wrongdoing.
Are there any? Are there any legal franchise complaints currently against HT (not consumer complaints)?
Count the number of stores closed, I bet there are complaints, call current owners – I know there are complaints,. Most owners are not happy at all, but you keep thinking everything is fine with HT.
Of course people could but it wouldn’t be smart to put legal documents here. And I have seen the takeover contracts they make sure you don’t take action in order to settle, because they know they would be exposed.
That’s not strange. It’s common practice that when health clubs, weight loss centers, etc. close a local (previous) competitor extends a discount or gives a credit to the members of the closed location.
That’s not what I meant was strange. What I think is strange is that that Salon with the mighty Hollywood Tans logo ,and it being cooperate owned and all, had to shut its doors and send the business over to a non Hollywood Tans salon. Maybe cooperate should get there business plan. If Hollywood Tans was as good as you think, the Name so strong wouldn’t you think it would be the other way around? The other Salon is like 1 minute down the road and they cursed Hollywood tans with the Cooperate owners showing us how to do it.
I too truly believe Hollywood Tans Days are numbered. They can’t even compete against any name salons. The Hollywood Tans cooperate thinks it is all the owners fault so with that view no changes will be made and no help provided.
Hello Again Sean
You are incredible! I have posted nothing but the TRUTH! I have 2 years off HT salon owners proof! I was a Salon owner! HT took my $34,500,00 Franchise Fee! You are the one that better print truth with out your prejudice opinions! You have not been hurt by this company as we were! Your posts have been nothing but a bias corporate opinion! Why would you DELETE my e-mail address? Is there a fear? Better yet I will contact the Salon owners and let them begin to post! Hollywood Tans will be exposed sooner then you may believe my friend!
I am done posting! I will leave it to the Franchisees! I am sick of you and your “personal attacks”!
Charlie:
First, if you truly had any regard for the HT franchisees who are still open, you would not be making irresponsible allegations about the chain’s days being “numbered” and supposed “rumors” of bankruptcy.
How, exactly, are those statements helping franchisees and managers sign up new customers and retain established customers? By creating fear? By giving competitors lies to use against them?
You may sign your comments “warmest regards” but HT franchisees can see you have a vendetta and want to see the chain go down.
Second, you would be wise to check with your attorney on your legal exposure for making such claims publicly. I say this for your own good… companies are not inclined to sit back and let people publish fictional reports of their impending demise. Stick to the facts… don’t invent them.
crazy wrote: I know most of the stores corporate took over in this area have now been closed. One of the closed salons even had a sign directing the HT clients to a competitor’s Salon – strange, now why would a competitors salon in the same area still be doing well when the cooperate owned (stolen) HTans salons had to be shut down.
First, HT Corporate actually co-signed the leases of those franchise locations so they would have been stuck with the liability of the closed stores. That’s hardly “stealing” the stores, correct?
One of the closed salons even had a sign directing the HT clients to a competitor’s Salon – strange…
That’s not strange. It’s common practice that when health clubs, weight loss centers, etc. close a local (previous) competitor extends a discount or gives a credit to the members of the closed location.
Also I heard, and I am not saying this is fact but several owners told me (and I believe their source) HT cooperate had to borrow money from the investment firm to make payroll
I heard it was because the franchisees hadn’t paid millions owed to the previous owners for back royalties and merchandise purchases. Most franchise attorneys would have advised the Corp. to put the franchisees in default long before they did. How can you not pay your royalties, then criticize the franchisor for cash-flow problems. The franchisees WERE the cash-flow problem… they didn’t pay the franchisor, yet continued to use the system, trademarks, etc.
I’m not saying that the franchisees might not have legitimate complaints, but no one has stated them here. You guys blame HT corporate for your failure, but no one has presented anything specific examples of wrongdoing.
Are there any? Are there any legal franchise complaints currently against HT (not consumer complaints)?
PS crazy… Charles does not have a real lawsuit pending. Check http://www.rip-offreport.com to see his on-again off-again supposed legal offensive. He was not even a franchisee… his deal fell through and they gave him his money back.
Hello my friend Crazy, And HT Salon owners…
I invite anyone with a Hollywood Tan Complaint to email me [del]
I will return your email with my direct office line!
I believe that HT has seen its days numbered!
Fairfield Ct GONE! 3 Salons… Derby Ct GONE!… Brandford Ct GONE!… West Hartford Ct GONE! Arizona Texas Florida New York New Jersey! I have been in contact with desperate Salon owners from all over the nation and I will do all I can to help!
Please e-mail me as soon as possible, There are rumors of Bankruptcy by December31,,2008,
My Warmest regards,
Charles E. Farricielli
Charlie- how do I get in touch with you.
Charlie- how do I get in touch with you? I know several owners that have a lot of info and would be interested in any lawsuit.
Also the new HT is even worse, I know most of the stores corporate took over in this area have now been closed. One of the closed salons even had a sign directing the HT clients to a competitor’s Salon – strange, now why would a competitors salon in the same area still be doing well when the cooperate owned (stolen) HTans salons had to be shut down. Maybe the competitor franchise knows something HT doesn’t, like how to run a franchise! HA –and I thought cooperate was going to show the freeloader owners (as they said) how to run them right! You can’t run them right when the entire system is flawed and based on fabricated numbers, lies and poor marketing, inflated equipment prices.
If HT had been upfront about the reality of the numbers I many owners would not have bought into it. They really did lie and got people to invest under false information. Then they apparently took the stores from them, to run it the right cooperate way, and then shut them down 6 months later. Need any more proof of a failing franchise?
Also I heard, and I am not saying this is fact but several owners told me (and I believe their source) HT cooperate had to borrow money from the investment firm to make payroll, and there is a reason they fired so many people at the top and they tried to sell back the franchise. Again this was told to me by current owners so take it at face value.
But again I would like to get in touch with you