Farmers Branch, Texas - 28 July, 2005 -

With a former Blockbuster Video executive and several of its franchisees leading the charge, Palm Beach Tan, founders of the tanning superstore concept, have put forth a strategy to dominate the $6 billion-a-year indoor tanning segment in much the same way Blockbuster Video dominated the movie rental industry in the early 1980's and 1990's. The current indoor tanning industry is comparable to the independently run, single unit operators of video rental stores two decades ago. "The top five tanning chains in the country have only five percent of the market, leaving 95 percent to the mom and pops," said Steve Berkman, former Blockbuster executive who now serves as Palm Beach Tan's vice president of franchise services. "There is a phenomenal consolidation opportunity in the indoor tanning segment and we are prepared to do whatever it takes to make that happen" With more than 90 superstore locations in 18 markets across the country in operation currently, Palm Beach Tan plans to open 43 more franchise locations and nine corporate locations through 2005 and 2006. Modeled After Blockbuster Thanks in part to Berkman, who brought with him a number of the original Blockbuster Video franchisees, Palm Beach Tan began franchising in 2003. Recognizing the similarities of the tanning segment to the video segment they helped create, Berkman and his Blockbuster contingent bought into the Palm Beach Tan concept embracing its solid growth potential. Multi-unit and multi-concept franchisees including Donald Zale, former president and CEO of Zale Corporation and Fred Montesi, operator of more than 100 Blockbuster locations, followed Berkman to Palm Beach Tan. "What initially attracted me to the video market was the value proposition for the customer: high quality options at economical prices," said Zale, now a multi-unit Palm Beach Tan franchisee in the Washington D.C. metro area. "Palm Beach Tan is very reminiscent of that." Getting Spa Treatment at a Tanning Salon Palm Beach Tan developed the idea of a "tanning superstore" with in-line or end-cap prototype stores consisting of a 3500 sq. ft. space with 20-25 tanning beds, two to three times the amount of a typical tanning salon. With a superstore option, Palm Beach Tan made a strategic decision to move from offering strictly tanning options to more spa-like services that ‘pamper' the customer. "The concept is all about choice," said Berkman. "Our locations offer our customers unlimited tanning without contracts or commitments and we offer a number of services like Mystic Tan, a UV-free tanning system which was originated at Palm Beach Tan, several styles of tanning beds, a hydration station and premium skin care products." Palm Beach Tan will also be driving the market with their main focus on regional, multi-unit development. "Palm Beach Tan will be franchising in both medium and large metropolitan markets and surrounding suburbs throughout the country," said Berkman. With a franchise fee of $25,000 and initial start-up costs of $500,000-$600,000, Palm Beach Tan offers all franchises a comprehensive support program that includes training, initial marketing and ongoing operational support. A strong relationship with Ergoline, the world's largest suppliers of indoor tanning systems and Australian Gold, makers of premium lotions, gives Palm Beach Tan purchasing power that allows them to pass the savings on to the customer. "The Palm Beach Tan business model and expansive services are a generation ahead of other tanning salons out there," added Zale. "It's a lucrative, high margin business to be a part of and it's exciting to be leading the way."

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