A mature, manager-run U.S. Sun Tan City salon may produce roughly $87,000 to $172,000 in estimated pre-tax owner earnings per year, with a modeled base case near $126,000. This is a Mode C, FDD-anchored scenario estimate for one standard franchised salon—not an earnings figure reported by STC Franchising, LLC. An actively working owner who replaces a paid supervisor may have an estimated owner-operator benefit of about $136,000 to $222,000, but the added labor value is compensation for work, not passive business profit.
The 2026 FDD provides strong same-brand revenue evidence, but the earnings conversion depends materially on a broad government industry expense proxy that includes tanning salons alongside other personal-care businesses.
What does the 2026 Sun Tan City Item 19 actually measure?
Item 19 officially measures Total Revenues, EFT Membership Revenue, Other Revenue and tanning-and-spa sessions—not owner earnings. For the 12 months ended December 31, 2025, the franchised-salon table reports average Total Revenues of $627,114 and median Total Revenues of $587,086. Those figures apply to mature, full-year franchised salons, not to a new salon during ramp-up.
| 2025 Item 19 statistic | Franchised salons | Company salons |
|---|---|---|
| Average Total Revenues | $627,114 | $684,871 |
| Median Total Revenues | $587,086 | $665,809 |
| Low Total Revenues | $200,285 | $299,816 |
| High Total Revenues | $1,520,382 | $1,632,464 |
The FDD says 48.1% of franchised-salon revenue came from recurring electronic-funds-transfer memberships. It also warns that reaching a comparable membership mix may take three to four years or more. That makes the 12.7-year average age of the franchised cohort a material limitation for a buyer modeling a new salon.
Company-salon results are not substituted for franchised economics. The FDD states that the company table does not reflect ongoing franchise royalties, certain other franchise expenses or franchisee financing interest, and the company cohort is concentrated in Kentucky, Indiana, Tennessee and West Virginia. Sun Tan City’s official U.S. franchise information confirms the salon operating model and allows an approved operating partner, but it does not publish a current owner-profit figure.
FDD references: Sun Tan City 2026 Franchise Disclosure Document, Item 19, pp. 43–47; Item 20, pp. 47–54.
How does official revenue become an estimated earnings range?
The model applies a transparent operating-surplus sensitivity to the official $587,086 franchised-salon median. This is an estimate, not a franchisor-reported profit calculation. The central margin proxy comes from the U.S. Census Bureau’s 2022 Service Annual Survey for employer firms in NAICS 812199, Other Personal Care Services, a category that includes tanning salons but also day spas, tattoo parlors and other personal-care establishments.
| Scenario | Modeled revenue | Margin assumption | Estimated earnings |
|---|---|---|---|
| Conservative | $469,669 | 18.5% | $86,700 |
| Base | $587,086 | 21.5% | $126,000 |
| Upside | $704,503 | 24.5% | $172,300 |
Estimated manager-run pre-tax owner earnings
The estimated 2025-anchored outcomes are $86,700, $126,000 and $172,300 for one mature standard salon; values are rounded to the nearest $100.
Interpretation: Revenue and margin move together in this model, so the range should be read as sensitivity—not as probabilities or promised outcomes.
Sources: Sun Tan City 2026 FDD, Item 19, pp. 43–47; U.S. Census Bureau 2022 Service Annual Survey tables. Calculations are independent.
Which assumptions are editorial rather than official?
- Revenue spread: 80%, 100% and 120% of the official franchised-salon median because Item 19 does not publish quartiles.
- Margin spread: the 21.5% Census-derived proxy minus three percentage points, unchanged, and plus three percentage points.
- Manager-run structure: normal supervisor compensation is assumed to be contained within the employer-firm expense proxy.
- No fee double count: the 8% royalty, minimum 3% advertising requirement and normal operating costs are not subtracted again from the all-in Census expense ratio.
The Service Annual Survey estimates revenue and total expenses for U.S. employer firms. Its six-digit published table is not a Sun Tan City P&L and does not provide a franchise-specific EBITDA reconciliation. The scenario therefore makes no separate add-back for depreciation, no separate owner-salary adjustment and no separate interest adjustment. The target measure is pre-tax cash available after normal unit-level expenses and recurring franchise fees, before personal income taxes and financing principal; because depreciation and interest are not isolated, the output should be treated as an operating-surplus proxy rather than a precise cash-flow statement. See the Service Annual Survey methodology for sample and estimation limitations.
How does owner involvement change the result?
An owner who personally performs the supervisor role may capture about $49,580 of additional labor value, raising the modeled owner-operator benefit to roughly $136,000–$222,000. This is estimated labor replacement plus residual operating surplus; it is not pure business profit and it is not passive income.
Manager-run residual versus owner-operator benefit
The estimated owner-operator benefit is $49,580 higher in each scenario because the owner replaces supervisor labor valued at the May 2023 BLS Personal Care Services mean wage.
Interpretation: Owner operation can increase total economic benefit, but only because the owner supplies labor that a manager would otherwise perform.
Source: BLS May 2023 wage profile for First-Line Supervisors of Personal Service Workers. The Personal Care Services annual mean was $49,580. Local market wages, benefits and role scope may differ.
- Manager-run pre-tax owner earnings
- Residual operating surplus after normal unit expenses, including assumed supervisor compensation, before personal taxes and financing principal.
- Estimated owner-operator benefit
- Manager-run residual plus the supported market value of supervisor labor personally performed by the owner.
- Owner salary or draw
- A payment mechanism, not automatically an additional economic return. Salary, distributions and retained earnings can come from the same underlying business cash flow.
- After-tax take-home pay
- Not estimated. Federal, state and local taxes depend on entity structure, deductions, jurisdiction and the owner’s circumstances.
The franchise agreement permits the owner or managing partner to personally manage the business as a primary occupation or to hire a supervisor who does so. That operating choice affects labor expense and the owner’s time commitment. It does not establish that manager-run ownership is passive.
Which variables could move actual earnings outside the range?
Membership maturity, occupancy, labor and equipment-related operating costs are the largest practical swing factors. The scenario is estimated for a mature standard salon; a new unit, conversion salon, unusual lease or heavily financed build can produce a materially different result.
What should be treated separately from operating earnings?
- Debt principal: excluded from estimated owner earnings. Item 10 says the franchisor generally does not provide or guarantee financing, so borrower terms cannot bestandardized.
- Interest: not adjusted separately because the Census total-expense table does not isolate a comparable six-digit interest line for this calculation.
- Depreciation: not added back. The scenario is not presented as EBITDA.
- Capital expenditures: replacement equipment, remodels and other capital needs are outside the annual scenario and can reduce cash available to distribute.
- Personal income taxes: excluded; no after-tax take-home estimate is published.
Item 20 adds context but not a profit measure. Franchised outlets decreased from 163 at the start of 2025 to 156 at year-end; the detailed table reports three terminations and four reacquisitions. Company-owned outlets increased from 90 to 96, including five reacquisitions. Those movements do not prove why an outlet changed status, but they make franchisee interviews and outlet-level records more important.
The FTC consumer guide to franchise disclosure explains that Item 19 contains the financial performance claims a franchisor chooses to make and that Item 20 provides system growth and owner-turnover information. For this brand, Item 19’s strongest evidence is revenue—not income.
What should a buyer verify before relying on this range?
A buyer should reconcile the scenario against current, comparable franchisee records before using it in a financing or compensation plan. The estimate is most useful as a diligence framework, not as a forecast.
Evidence to request and test
- Written Item 19 substantiation, including an explanation of the 154-versus-162 franchised-salon count.
- Monthly 2025 and trailing-12-month P&Ls from salons with similar market size, square footage, equipment mix and maturity.
- Separate payroll for salon staff, Salon Director or Supervisor, district management and owner compensation.
- Lease expense, common-area charges, utilities, tanning equipment maintenance, lamp and acrylic replacement, insurance and merchant-processing costs.
- Actual royalty, National Marketing Fund, local advertising, technology, client-services and required program charges.
- EFT membership count, membership revenue share, churn, collections and the time required to reach a mature recurring-revenue base.
- Debt amount, interest rate, amortization, required reserves and annual principal payments, modeled separately from operating earnings.
- Interviews with current and former franchisees listed in Item 20 about manager-run versus owner-operated economics.
The strongest defensible annual range is approximately $87,000 to $172,000 of manager-run pre-tax owner earnings per mature salon, with an estimated owner-operator benefit of roughly $136,000 to $222,000 when the owner replaces supervisor labor. Both are scenario-based, not official Item 19 profit figures. The most important earnings driver is mature recurring membership revenue combined with control of labor and occupancy. The largest unresolved uncertainty is the absence of same-brand franchised-salon expense and profit data. Before relying on the range, verify the Item 19 substantiation, reconcile comparable salon P&Ls and test the assumptions in interviews with current and former franchisees.