(UnhappyFranchisee.com) According to the 2012 list of franchise loan defaults released by the Small Business Administration, several tanning salon franchises have alarmingly high default rates for SBA-backed loans.
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Four Tanning salon franchise companies fell within the worst 75 franchises among all franchise companies whose franchisees were granted 25 or more SBA loans since 2001.
The Executive Tans franchise had the worst default rate, with 81% of their franchisees unable to pay back their SBA loans.
The Image Sun franchise was not far behind, with a disturbingly high 70% default rate.
The owners who invested in Planet Beach franchise defaulted on their SBA loans 57% of the time.
Hollywood Tans franchise owners had a high 37% loan default rate.
Despite the high failure rates, these tanning salon franchises seem to still be recruiting franchise owners, and it seems the SBA will still consider guaranteeing their loans with taxpayer money.
If you are still considering investing in a tanning salon franchise, we recommend proceeding with extreme caution.
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