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Chain owned by Golisano looks to shine in N.Y.

Rochester Business Journal
January 18, 2013

Zoom Tan LLC, a Florida-based tanning salon chain owned by Thomas Golisano, has plans for a major Upstate New York expansion, but not without competition.
 
Zoom Tan has more than 40 locations in Florida and New York. The company opened its first location in the Rochester market, in Canandaigua, last August. It also has salons in Victor and Batavia.
 
Joseph Francher, director of real estate for Zoom Tan, said Golisano is the majority owner of the privately held company. Golisano was unavailable for comment, Francher said.
 
A former real estate manager in the Rochester area and a graduate of Nazareth College of Rochester, Francher now resides in Florida. He said Zoom Tan's expansion was highly motivated by Golisano's ties to the Rochester area. Golisano changed his residency from Rochester to Naples, Fla., in 2009 because of New York's high taxes.
 
Zoom Tan launched in Florida in 2008. Francher said Golisano became the lead investor in 2009. Francher would not give specific revenue figures for Zoom Tan but said the company has embarked on a rapid growth plan.
 
The business plans to open at least 20 more locations in Upstate New York this year, including five to eight more in the Rochester area. Its website lists Brighton, Brockport, Chili, Gates, Greece, Henrietta, Irondequoit, Penfield, Pittsford and Webster as towns that can expect a Zoom Tan salon in the near future.
 
Zoom Tan also plans to open a location in the University of Rochester's College Town once the development is completed, Francher said. In addition, the company has signed an agreement to be the official tanning salon of the Buffalo Bills for next football season.
 
Each Zoom Tan location employs two to three people. Francher said the company will bring 50 to 75 jobs to Upstate New York in 2013. The company also plans to expand into Pennsylvania and Ohio this year.
 
"The tanning industry is such a fragmented market," Francher said. "We saw no brand out there with a dominant presence. If you ask nine out of 10 people who the top national player in tanning is, you wouldn't find a common answer. We feel we can become that common brand."
 
Zoom Tan will get its fair share of competition from another fast-growing franchise moving into the Rochester market. Golden Tans of Rochester Inc. this month converted its five salon locations to Sun Tan City franchises.
 
Sun Tan City is based in Louisville, Ky., and operates more than 200 salons in 16 states. Rocco Viele, owner of Golden Tans, purchased the exclusive franchise rights to Sun Tan City for Monroe County in October.
 
Viele said his decision to convert Golden Tans to Sun Tan City surprised people. He founded Golden Tans in 1984 and built it into arguably the most recognized tanning brand in the Rochester market.
 
"Every single person of intellect that I've spoken to thinks I've made a very bad choice," he said. "But they don't understand the nature of our business."
 
Viele followed the growth of Sun Tan City over the past few years and felt a franchising opportunity would give his business the back-office consistency it had been lacking.
 
"I admit when I started this business, I was limited in management skills," Viele said. "I was limited in organizational skills. Because of those two things, I was having a lot of good moments and some bad moments. I wanted more continuity."
 
Access to Sun Tan City's back-office operations system and analytics tools will increase his business' buying power by 20 percent.
 
Golden Tans already has remodeled the interiors of its five locations to resemble Sun Tan City's design. The company also plans to build a new Sun Tan City location from the ground up on Lyell Avenue in Gates; it is expected to open in March.
 
The Lyell Avenue salon will be the first full-blown Sun Tan City salon in the Rochester market. Viele said it will be much bigger than the current locations and will cost some $750,000 to build, compared with the $200,000 to $300,000 it cost to build the Golden Tans salons.
 
The growth of his business reflects the overall growth of the tanning industry in the Rochester market, Viele said. He expects to see increased competition from the likes of Zoom Tan and Total Tan, which has three locations in the Rochester area.
 
"Those are formidable competitors," he said. "It's interesting. When I first started Golden Tans, most customers had to travel 25 miles just to get to me. Now you'll stumble upon 25 other tanning salons on the way to getting to me."
 
Last year, market research firm IBISWorld Inc. said that while the tanning-salon franchise industry declined in the United States during the recession, from 2008 to 2010, it has since recovered. An IBISWorld report says the industry's revenue increased roughly 2 percent in 2012 and now exceeds $1.5 billion.
 
A Google Places search for tanning in Rochester lists more than 200 locations. That includes tanning services offered by gyms, spas and hair salons. Despite the large number of salons in Rochester, Francher said, Zoom Tan's business model has positioned the company for success.
 
"Our model is different," Francher said. "Our locations feature all stand-up tanning booths. There are no beds. And you're able to tan every day for a $9.99-a-month membership fee. It's a very affordable alternative to everything else out there."

1/18/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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