Table of Contents

WHAT IS A CONTEMPO SPA? 4

SPA SERVICES ARE NOT A LUXURY 4 A DAY SPA FOR THE MASSES 4 THE NEIGHBORHOOD WELLNESS CENTER 5

HUGE POTENTIAL 5

1 IN 4 PEOPLE HAS VISITED A DAY SPA 6

THE PLANET BEACH STORY 6

WHO ARE MY CUSTOMERS? 9

PLANET BEACH: IT'S FOR EVERYONE AND EVERYONE NEEDS IT NOW! 9 WHO ARE YOUR CUSTOMERS? 9

WHAT SERVICES DO I PROVIDE? 10

CUSTOMER REVIEWS 12

HOW MUCH CAN I MAKE? 14

FINANCIAL PERFORMANCE REPRESENTATIONS 14 SPA RESULTS—TOP PERFORMING LOCATIONS NATIONWIDE 15

WHAT ARE MY STARTUP COSTS? 16

FRUGAL IS BACK! 16 FRANCHISE DISCLOSURE DOCUMENT (FDD), ITEM 7 17 ESTIMATED INITIAL INVESTMENT 17

A DAY IN THE LIFE 19

HOW DO I FINANCE MY CONTEMPO SPA? 20

NEED HELP FINANCING YOUR CONTEMPO SPA? 20

TRAINING AND SUPPORT 21

EXPERT TRAINING 21

QUICK FACTS 22

FRANCHISE TYPES 23

AREA REPRESENTATIVE 23 SALON CONVERSION 23 TESTIMONIAL: 23

INSIDE SCOOP 24

MEET THE MANAGEMENT TEAM 25

STEPHEN SMITH, CEO AND CHAIRMAN 26 RICHARD L. JUKA, CHIEF OPERATIONS OFFICER AND DIRECTOR 26 CRAIG M. BERNER, CHIEF FINANCIAL OFFICER 26 NANCY PRICE, SENIOR VICE PRESIDENT OF SALES 27 DAVID Q. MESA, VICE PRESIDENT OF INTERNATIONAL DEVELOPMENT 27

PLANET BEACH FRANCHISE NEWS 27

TENACIOUS FORMER MS. PLANET BEACH WINS BIG BROTHER 13 27 INC MAGAZINE LISTS PLANET BEACH AS A TOP 10 FRANCHISE 29 ALLBUSINESS.COM RANKS PLANET BEACH ‘BEST OF THE BEST’ FOR 2011 30 ENTREPRENEUR MAGAZINE RANKS PLANET BEACH IN ITS ANNUAL TOP 500 FRANCHISE

LIST 31

FRANCHISEE REVIEWS: INTERVIEWS WITH ACTUAL FRANCHISE OWNERS 32

INTERVIEW WITH PLANET BEACH CONTEMPO SPA OWNER JENNIFER CABRERA - BRAND

NEW AREA REP FOR MIAMI AREA 32 INTERVIEW WITH PLANET BEACH CONTEMPO SPA FRANCHISEE DON CAMPBELL 34 INTERVIEW WITH PLANET BEACH CONTEMPO SPA FRANCHISE OWNER BRENT MAREK 35 FRANCHISE REVIEW: INTERVIEW WITH LAS VEGAS PLANET BEACH CONTEMPO SPA

FRANCHISEE LLOYD ZELLNER 36 INTERVIEW WITH PLANET BEACH CONTEMPO SPA FRANCHISE OWNER AND AREA

REPRESENTATIVE KEVIN NUNES 38 INTERVIEW WITH PLANET BEACH CONTEMPO SPA FRANCHISE OWNER MICHAEL OUBRE

39

CONTACT INFORMATION 41

NANCY PRICE 41 DAVID MESA 41

What is a Contempo Spa? A Contempo Spa is a unique and innovative spin on traditional day spas. Customers pay a monthly membership fee for unlimited fully automated, push-button spa & UV services in a private room without the need of an attendant. These rejuvenating wellness services include four types of massages, two types of facials, hydration treatments, teeth whitening, guided meditation, oxygen therapy, weight management treatments, UV therapy and Mystic spray tans and a wide range of skincare and nutrition products all bundled together to help customer achieve their total skincare, wellness and stress relief goals.

Spa Services are Not a Luxury The convergence of rising health care costs, aging baby boomers, growing life expectancy and the desire to live a healthier life have made spa and wellness services a necessity. Once only a luxury item, spa and wellness services are in high demand because they minimize health costs, reduce stress and help people live healthy, happy lives. This explains why Planet Beach Contempo Spa revenue numbers are growing system-wide, even in today's tough economy. Stress relief is the number one reason customers visit spas and Contempo spa is able to offer luxury spa services at non-luxury prices.

A Day Spa for the Masses Lower prices mean the average customer can visit a spa several times a week and benefit from a variety of services. That's the genius of a Planet Beach Contempo Spa: the average customer can get health and wellness services for one low monthly price and can use what they want, when they want. ‚"We have regular customers visit our spas 2-3 times a week. If they had to pay hourly rates for our services, they would spend well over $2000 a month,‚"Steve Smith, CEO of Planet Beach Franchising Corporation. ‚"We've made it possible for most people to afford regular relaxation and rejuvenation."

The Neighborhood Wellness Center The wellness industry is booming and products and services related to wellness are hitting the market at a rapid pace. Consumers seek a trusted source for expert advice and a consistent spa experience. Planet Beach spa consultants are all professionally trained to provide the highest quality, most knowledgeable service to our clients. We provide an affordable alternative to the lavish cost of spas while maintaining the highest quality of personal care and attention Planet Beach Contempo Spa is filling a need for the local products and expert services in a neighborhood wellness center. Want a massage twice a week? Need a healthy and attractive spray-tan? Want to work guided meditation in to your schedule? Want to burn calories and detox with a hydration treatment? With a neighborhood contempo spa, customers can escape the daily grind and slip away to the 'beach' on a whole other 'planet' and get consistent service every time they visit.

Huge Potential Who doesn't want to feel great, inside and outside? A fundamental shift in how we think about health, disease and aging is taking place and it's called wellness. Wellness is no fad or passing fancy. This shift is a social movement, and much like the "green" movement changed the way we think about energy usage and recycling, it is changing how people across all age groups eat, exercise and spend their time and their money. The customer base is huge and continues to grow.

Source: International Spa Association The growth in the health and wellness industry is phenomenal. Consider these numbers: From 2005 to 2008, retail sales of health and wellness products, including organic and natural personal care products, increased 42 percent, to a total of $112 billion in 2008. Revenues for the U.S. spa industry jumped 32 percent over the same period, to $160 billion in 2009, according to the International Spa Association. Scheduling a spa massage was once about pampering -- today it is as much about prevention. Our lives are stressful, and we have a much better understanding of how chronic stress affects our health. Finding healthy ways to unwind is more and more an important part of a balanced lifestyle. That's where Planet Beach Contempo Spas come in. Planet Beach taps into two key wellness trends: stress-reduction treatments and wellness products. A Contempo Spa is a neighborhood wellness center, a one-stop, membership spa that provides unlimited access to services for a monthly fee. All the services are in private rooms and are fully, self-automated. Wellness treatments include facials, a detoxifying sauna, rejuvenating hand therapy, oxygen therapy, guided meditation, therapeutic massage, weight management treatments and spray tans, UV therapy and so much more. The spas also carry a number of proprietary and national

nutrition, skincare and take-home spa products lines. The Contempo Spa concept connects with customers because it delivers what they want: • Convenient, less expensive services • Somewhere to relax and recharge • Privacy, no need for an attendant • Innovative technology • Reciprocal membership-based offering • A place to escape the everyday grind

1 in 4 People Has Visited a Day Spa ISPA estimates that one of every four people has been to a spa. Men now make up more than 30 percent of spa-goers. The so-called Millennials, born in the 1980s, are making spas a regular part of their lives. In the United States, 78 million baby boomers are getting ready to hit their 60s. As this group ages, the need for Contempo Spa services will skyrocket. We may be getting older, but who says we have to look and feel it?

The Planet Beach Story Everyone loves the beach. Do you know anyone who doesn't daydream about escaping to relax and recharge their batteries?

The reasons are simple: our lives are complex, fast paced and full of stress. We all want to escape to an ultra-relaxing place to center ourselves and slow our lives down. When we can escape and replenish our energy, we are more patient, produce better work and live happier, healthier lives. When we escape, we are far away from the forces that create stress in our daily lives; we might as well be on another planet. Stephen Smith had this in mind when he passed by a neon sign in front of a defunct uptown New Orleans tanning salon in 1994. The sign said "Electric Beach." He had been operating healthclubs and gyms for years and understood the value of helping people live healthy lives but the gym business was limited; he wanted to help people feel better about themselves. Smith decided to open his first salon and bought the uptown location. Since funds were tight, he could only change one of the words on the sign outside. Beach stayed, replaced with Planet to represent the desire to escape to the beach and have an "otherworldly" and relaxing experience.

The first tanning spa -- and the spas that followed -- were an overnight success. The Planet Beach franchise system grew to several hundred locations and many foreign countries. Today, there are over 340 franchise units in 38 states and 9 foreign countries. The company is still based in New Orleans and the original uptown location is still posting great numbers. In 2005, Steven had a self-described "moment of inspiration:" why not expand Planet Beach into a full service day spa and make it affordable to the average citizen? Smith's idea tapped into a real need in the marketplace. "I saw that we could provide the same results of a traditional spa in less time and a whole lot less money," Smith says. "Our industry was changing, demand for tanning was diminishing and demand for day spa services was increasing. It became very clear to me that we needed to reposition our brand to become a more successful franchise. We broke into an untapped niche with the Planet Beach Contempo Spa concept. " The franchise is now positioned to turn the day spa industry on its ear by making spa services, traditionally considered luxury purchases, available at extremely affordable prices to massive amounts of customers. "Until Planet Beach Contempo Spas there were only day spas for the affluent," said Smith. "Now we have a day spa for the masses. By offering a membership model that cost members a mere $79 to $99 a month, customers can receive the same amenities one gets at an elite spa for a fraction of the costs. We believe we have created the future of the day spa industry." The future is here! Planet Beach Contempo Spas are thriving in the market and even posted

positive revenue gains in the worst of the recent recession.

Who Are My Customers?

Planet Beach: It's for Everyone and Everyone Needs it Now! As the world's first automated day spa franchise, our technology-driven equipment means there's no need for licensed therapists‚ our clients enjoy our services in less time, and at a far less cost than an ordinary day spa. Rather than spending a fortune on traditional spa services, consumers can now experience Contempo Spa luxury without the Day Spa price. Our innovative version of the traditional day spa made spa services available to a much larger population of customers than previously possible.

Who are your customers? A Contempo Spa membership isn't about being young or old, rich or poor. It's about having a healthy attitude, a desire to improve physically and psychologically and wanting the best for friends, family, community and self.

Our customers include working class, middle class, upper middle class or high society. Taken together, they create a modern collage, stay-at-home moms, career-minded professionals, teens and university students, armed services personnel, CEOs, teachers, athletes, patients, scientists, pilots, artists, models, actors, entrepreneurs and retirees. Planet Beach Contempo Spa enthusiasts come seeking a few minutes away from the office, family or classroom. They have fallen in love with the calm, therapeutic atmosphere of the spa, the convenience of its automated and affordable services and the diversity

of its holistic nutrition and skincare products. Some live with chronic health conditions such as arthritis or fibromyalgia. They have discovered that Planet Beach services such as aqua massage or infrared light treatments provide relief and hope. Still others are battling weight gain and use Planet Beach's nutrition products and the calorie-burning SlimCapsule treatment. Others come seeking traditional day spa services: a spray tan, a facial or even teeth whitening. Planet Beach Contempo Spa members don't have a minute or dollar to waste. They demand

value and quality and have found it in affordable monthly membership plans. They know an hour of relaxation and rejuvenation a few times a week will make them a better employee, parent, boss, teacher, manager, coach or student. "I immediately felt comfortable and welcomed," says Fran, a customer who recently wrote a note to the Highland Road Planet Beach Contempo Spa in Baton Rouge, La. "I think I've found a place to stay!" Cori Ann, a customer at the Crow Canyon Commons Planet Beach in San Ramon, Calif., says the spa staff excels at making her feel comfortable, relaxed and spoiled. I love the décor," Cori Ann says. "It has a great high-energy feel the moment you walk in, yet you still feel relaxed and excited about all the pampering you are about to received. I love Planet Beach!"

What Services do I Provide? What could be easier than pushing a button to receive a massage, hydration treatment, teeth whitening or a sauna? A Contempo Spa provides all these amazing options and so much more. Each service is fully self-automated, allowing our members to get what they want when they want it. For today's busy lifestyles, our system is a perfect fit. We have nearly 20 popular services all in one, convenient neighborhood wellness location. Our services fall under three broad categories: RELAX, GLOW and RENEW. Each service makes our customers look great and feel even better. Franchise owners have a varying number of services depending on the local market and customer demand. Customers who put a few of them together feel like they've had a mini-vacation. RELAX: The top reason people visit a day spa is to get a massage to relieve stress. At a Planet Beach Contempo Spa, members can choose from a menu of massage options. Massage customers remain clothed and enjoy their treatments in private rooms without the need of an attendant. Our AquaMassage bed uses adjustable water temperature, jets and pressure to decrease muscle tension and increase flexibility. Hydro-Massage is a similar treatment with a whirlpool twist. Our Therasage bed targets the body's pressure points with infrared heat and massage and targets vital pressure points along the spine. Take a seat in the Cyber-Relax massage chair, which offers 509 combinations after scanning your shape and posture.

We also offer Oxygen therapy, with popular aromatherapy choices, and SpaTempo, a personal sound system with 70 commercial-free satellite radio feeds. Our Cloud 9 guided meditation service uses creative visualization and relaxation techniques that help reduce anxiety, increase energy, improve sleep and achieve a specific state of mind. Get more details on relaxation services RENEW: Stress, pollution and aging all take a toll on how we look and feel. Planet Beach Contempo Spas have ways to help our members fight back. Our Luminous Facial uses light therapy, topical skincare products and dietary supplements to help you look your best at any age. This treatment helps with wrinkles, dark circles, clogged pores, age spots and other common skin issues. Cool nutrient-enriched mist is how our Umo Facial helps improve skin elasticity and create even skin tone and texture. Tired hands get similar pampering with our Umo Hand Spa hydrotherapy, which uses Gamma PGA. Dense, nutrient-rich steam and infrared heat combine in our Hydro-Derma Fusion treatment for head-to-toe rejuvenation. We use premium-grade L.E.D. whitening light to brighten and whiten teeth. One session can mean 4 to 6 shades lighter in 15 minutes. We also offer Saunatox, an infrared sauna system that penetrates deep into muscle tissue, melting away tension and aches. Customers rave about SlimCapsule, a system that integrates vibration massage, full-body LED light technology, aromatherapy and cool facial air that work to slim, tone and detoxify your body in a single session. Get more details on rejuvenation services GLOW: Our customers achieve a healthy glow and a lifted spirit with UV-Free Mystic or UV Therapy services. The UV-Free Mystic Spray Tan Mystic spray tan gives customers beautifully bronzed skin in

seconds with no exposure to ultraviolet rays. No streaks, no orange, no melanin production. The deep natural-looking glow lasts 5 to 7 days and takes seconds.

High Pressure UV Therapy allows customers with light complexions to benefit from responsible UV therapy. Maintaining a healthy glow with this system requires only two to four sessions a month. Planet Beach Contempo Spas also offer UV Therapy, and members can choose treatments that allow them to stand or lay down. We work with our customers to help them make

intelligent choices and practice responsible skin wellness habits. EXPERIENCE Spend some time at a Contempo Spa yourself. You may not be a different person at the end of the day, but you will be happier and more relaxed!

Customer Reviews Planet Beach Contempo Spas have loyal customers who come for a variety of reasons and often recomend day spa services to their friends. Here's some actual customer reviews:

My name is Emily Davis, and I've been a member at Planet Beach since 2002, 9 years! I currently use the Hydration Station, Slim Pod Capsule, and Mystic Spray tanning system as often as I can. I thoroughly enjoy using all the equipment at Planet Beach, it's very easy, relaxing, and has given me some amazing results. I use MANY products at Planet Beach including: Mystic Hypertan (put on before you do a mystic spray) and Mystic Life lotion, both products make my mystic tan last longer. I use the entire Body by Planet Beach system, which includes the Body Contouring oil (use before Hydration and/or Slim Pod), the Hydrate daily moisturizer (use after Hydration and/or Slim Pod and/or everyday use), and lastly, the Enhance, anti-cellulite cream (use after Hydration and/or Slim Pod), it smells great and really works! I strongly suggest

everyone to give Planet Beach a chance and try out all they have to offer; there are many other spa systems to try too, such as the Lumiere Light Therapie face lamp or a Whiter Image teeth whitening session. Overall, it has made me feel and look better inside and out, and I've actually made some lasting friendships at Planet Beach, as well. THANKS! ~Emily Davis

"Planet Beach is the best little vacation that completely relaxes and de-stresses me in only 1-hour! I've been a member for 2 months and have enjoyed every minute of it. I whole heartedly believe that the best investment for my sanity is Planet Beach. I have even dropped 5 pounds using the Hydration Station, Slimpod & Indulge drinks. I can also see a difference in my face from using the Luminous Facial. I feel better mentally and physically than I have in years. This is definitely the place to be!" ~Kelly M., North Carolina I just love this place! I was looking to get a spray tan and I'm so happy that I came here. I had no idea they had so

many services besides tanning. The Hydration Station is amazing and I am completely addicted to the Lumiere facial. All the girls who work in the spa are super sweet and friendly too. Can't say enough about this place - so glad that I tried it!! ~Christine N., San Jose, CA I've been coming to Planet beach since it opened, it's been a haven, a place where no one needs/wants anything from me. I can come in tired and down and leave feeling great. The hydration has really helped my skin look much better and feel softer. The facial is also great, I love the aftercare product. The chair massage is tops. This was a mother's day gift for mother's day and has been the best gift I have received in a long time. Thanks Planet Beach! ~Julia G., Austin, TX I just joined PB a few days ago. The staff was incredibly sweet, knowledgeable, and helpful in picking out both products and services. Every time I've been in this location it has been very clean and tidy. I like that you get use of a towel and bathrobe while spending time at their "spa." The services are great for what I'm paying. I'm getting Mystic tan, hydration beds, LED fotofacial, and 2 types of massage unlimited for $80/month. To me, that's totally worth it. I paid more than that for 2 airbrush tans somewhere else. Overall, I like this place. It's a nice treat during these depressing times. ~J.C., San Jose, CA Love, love, love them! I've been to several other spas and none compare to these guys. Not only are they accommodating but sweet as could be! My favorite Planet Beach employees are Mallory and Jennifer because they're totally laid back and 100% friendly, but all of the girls I've dealt with have been great as well. They offer lots of different options: a water massage bed, a hydration bed, Mystic spray tan and just all sorts of things. I've dealt with their manager on one occasion and she was wonderful. Again, love, love, love! I don't know what else to say but for the price of an average spa visit you just get so much more here. It's entirely worth it! ~Whitney H., Campbell, CA The services are great and the staff is very helpful. The Planet Beach products skin care and tanning lotion are phenomenal. I highly recommend this spa. Planet Beach gives you the best results while doing it healthy to your skin. They offer so many other services as well from massage, to hydration, to teeth whitening. They get an A++ from me and I am difficult to please.

~Dee, Middleton, NJ

How Much Can I Make? Quite frankly, it's up to you. Nobody wakes up in the morning and says to themselves "I want to be average today," yet most people focus on averages when they research buying a franchise. Average is average. Please don't stop at average. We encourage you to aspire to a lot more! Please see the table below to see information on our franchisee's results. Like all companies, some people become top producers and some struggle. We want you to make a decision you feel good about, which is why we don't hard sell or candy-coat our earnings claims. We are looking for new members for our winning team. Unlike a lot of franchise companies, we don't do well unless you do well, and we want you to become a top producer. We want people who see themselves as potential top-producers and can't wait to break our records. If you want to be above average, we can tell you how. The following information is taken directly from the August 2011 Planet Beach Franchise Disclosure Document, item 19. The full FDD is provided to all candidates:

FINANCIAL PERFORMANCE REPRESENTATIONS The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances. PBFC does not have a company-owned Spa as of February 2011. The following is three sets of data that represent the gross revenues of our Top 10, 75 and 100 locations.. The Top 10 locations are the locations that finished the year in the Top 10 of all locations. The Top 75 and 100 location monthly averages represent the top 75 or 100 locations as measured monthly for each of these categories. Some locations are new and emerging while others are mature locations that have settled into a normal sales cycle. The locations experience resurgence in their growth whenever they add new Spa services that are rolled out by PBFC. We launch new products that tie in to the new services as each service we offer has products that are either required or compliment the experience or results from the session.

The Top 10 locations averaged $532,617 in gross revenues for 2010. These locations range in age from 20 months to 15 years in operation. The operators of these locations aggressively follow the system and participate in our Franchisee School, regional training and web based training seminars. The Top 75 and Top 100 averaged $374,690 and $346,848 in gross revenues respectively. These locations ranged in age from less than 1 year to 13 years of operation. Many of these locations are still in the ramp up stage of the business and have further growth opportunities.

Spa Results—Top Performing Locations Nationwide PBFC compiled the annual gross revenues for the top ten (10) Spa locations for fiscal year 2010. These top ten (10) Spas had average gross revenues of $532,617 for fiscal year 2010. On an annual gross revenue basis, revenues increased $15,109 per location or 3% from 2009 to 2010 for these top ten (10) Spa locations. The gross revenues were obtained from PBFC’s point of sale software, which gathers location gross revenues and other data. These gross revenues are verified and submitted by the franchisee, or area representative to PBFC Spa performance personnel on a monthly basis. General Comments The top ten (10) Spas represented herein operate in the following states: Louisiana, Florida, Texas, Montana, North Carolina and Kansas. We urge you to contact our System franchises to make your own evaluation of your potential Franchised Business success. Exhibit 3 to this franchise disclosure document contains the names of all of our franchisees and the address and telephone numbers of all Franchised Businesses. Actual results will vary from franchise to franchise and we cannot estimate the results of any particular franchise. We do not represent that any franchisee can expect to obtain the above revenue levels. You must accept the risk that your actual numbers may or may not reach or exceed these reported calculations. Further, the expenses identified in Schedule B are not the only expenses that you will incur in connection with your operation of your business. Average operating expenses in Section B are based on worksheets that franchisees have provided to PBFC. You may incur other additional expenses including, but not limited to, insurance, legal, accounting, interest on debt service, depreciation/amortization, property taxes, other taxes and licenses. You and your advisors should consider this in your due diligence and preparation of your business plan. You are responsible for developing your own business plan for your business, including capital budgets, financial statements, projections and other elements appropriate to your particular circumstances. PBFC encourages you to consult with your own accounting, business, and legal advisors in doing so. In developing the business plan, you are cautioned to make necessary allowance for changes in financial results to income, expenses, or both, that may result from operation of your business in different geographic areas or new market areas, or during periods of, or in areas suffering from, economic downturns, inflation, unemployment, or other negative economic influences. In addition, historical costs do not necessarily correspond to future costs because of factors such as inflation, changes in minimum wage laws, location, financing, real estate related costs and other variables.

Finally, prospective franchisees must bear in mind that a newly opened business cannot be expected to achieve sales volumes or maintain expenses similar to those of an established business. Other than as set forth in this Item 19 or in any supplemental financial performance representation, PBFC does not furnish, or authorize its salespersons (or anyone else) to furnish, and you should not rely on, any oral or written information concerning the actual or potential sales, income or profits of a Contempo Spa business. PBFC has not suggested, and it certainly cannot guarantee, that you will succeed in the operation of your business. Your ultimate success will be a function of the following: (i) your skill and experience; (ii) the effort that you devote to your franchised business; (iii) your business acumen; (iv) whether your territory is in a rural versus urban setting; (v) prices you charge for products and services; (vi) the number and skill of the sales agents you use; (vii) the amount you expend on advertising and promotion; (viii) general economic conditions; (ix) the growth or shrinkage of the population in your territory; (x) the enthusiasm of the population in your territory towards tanning and spa services; (xi) the relative affluence of the population in your territory; (xii) other factors affecting supply and demand; and (xiii) other factors affecting profitability, like your operating expenses, general and administrative expenses and other variables.

What are My Startup Costs?

Frugal is Back! "Smart entrepreneurs are doing more with less," says Joseph R. Cardamone, president of the U.S. Federation of Small Businesses. "With diminished cash flow and tight credit, only those businesses that operate efficiently will survive this economic downturn, which may last several years." With over fifteen years of growth, Planet Beach Contempo Spas is breaking records and we believe in operating efficiently and running profitable businesses. We care about the profitability of our franchise

owners and we want all of them to survive the economic downturn. We're downright stingy about operating expenses and believe in spending hard-earned money on items that have a strong rate of return. How much money does it take to start up a Contempo Spa franchise? Below is our Item 7 of our Franchise Disclosure Document. This table gives the ranges for typical start up costs:

Franchise Disclosure Document (FDD), Item 7

ESTIMATED INITIAL INVESTMENT Description Estimated Amount

or Low-High Range

Method of Payment

When Due To Whom Payment Is To Be Made

Initial Franchise Fee (2)

$8,500 to $20,000 Lump Sum Upon signing of Franchise Agreement

PBFC

Planet Beach Spa Equipment and Timer System with shipping, installation (3)

$81,700 to $120,240 Lump sum As arranged PBFC

Leasehold Improvements (4)

$5,000 to $70,000 As arranged As arranged General Contractor

Owner Furnished Items (5)

$9,000 $12,000

As arranged As arranged Approved Vendors

Utility, phone and lease deposits (6)

$2,500 to $4,500 As arranged As arranged Landlord and Local providers

Insurance initial payment (7)

$600 to $1200 As arranged As arranged Insurance Provider

Computer and Software (8)

$3,200 to $6,800 Lump sum Upon ordering PBFC and/or Approved Vendor

Printing & Marketing (9)

$10,000 to $20,000 As arranged As arranged Various

Wholesale Goods (10) $6,000 to $7,500 Lump sum Upon ordering PBFC Washer and Dryer (11)

$0 to $1,200 As arranged As arranged Local Provider

Permits, licenses (12) $500 to $1,000 As arranged As arranged Various Working Capital and Miscellaneous (13)

$8,000 to $20,000 As arranged As arranged N/A

Totals (14) 135,560 to $289,440 Note 1. Estimates are based on a single unit Spa. The difference in price is due to the multi unit franchise fee square footage. Square footage is approximately 1400. Theses spas feature one spray tanning unit , one airbrush sytem and automated spa services as determined by PBFC. Note 2. You must pay us an initial franchise fee of $20,000.00 for a Spa, or the option fees should they be granted. In California, Minnesota, North Dakota and Washington the initial franchise fee will be placed in an escrow account until the Spa opens. In Hawaii and Virginia the initial franchise fee will be deferred until the Spa opens. Note 3. The low end represents the recommended equipment mix. This estimated range does include a T-Max Timer system or wiring and delivery and installation. All Spas are required to have a minimum of one (1) spray tanning booth, one airbrush system and six (6) pieces of spa equipment or a maximum of 2 UV tanning units can replace two of the spa

units determined by PBFC. This amount may vary depending on shipping and installation costs. This amount does include taxes calculated at 4%, and you must check with you state to determine if there are additional taxes due. Note 4. The low estimate is based on a Spa with an estimated 1400 square foot space with significant landlord participation (in the form of actual landlord improvements performed or tenant improvement allowance) and no demolition or the acquisition of a site previously occupied by a similar business model. Rooms and necessary electrical and HVAC are in existence in this scenario. This estimated range will vary depending on the location, necessary leasehold improvements and landlord participation. The higher range estimate is based on no landlord contributions and the required build out to Planet Beach specifications from a vanilla box. This also includes flooring. Note 5. Owner Furnished Items (OFIs) consist of millwork (including retail fixtures, various shelving, reception counter and office management system), lighting, interior signage, exterior signage, and furniture. Note 6. Some landlords may require a deposit of first and last month’s rent. Deposits on utilities will also vary. Deposits will vary based on the market rental rates for your market. Note 7. You will need to obtain Commercial General Liability ($1 Million Minimum Coverage) insurance, Worker’s Compensation, Business Interruption insurance, Flood, Life Insurance (equal to amount borrowed) and Construction Coverage insurance. Note 8. Low end includes hardware and required software. The “high” figure includes the costs for two CPUs, monitors, keyboards, cash drawers, credit card swipes, receipt printers, and one laser printer. Note 9. You are required to invest this amount in marketing prior to your Spa opening and through the initial opening of your Spa. You may spend additional amounts with PBFC approval. Note 10. You will be required to purchase a specified amount of wholesale goods for the initial inventory of products to be offered for sale based on the size of your Spa. A selection of PBFC’s proprietary products and national brand products must be stocked. Note 11. Zero dollars as a “Low” because not all Spas can accommodate a utility room due to size or layout restrictions. Therefore, the washer and dryer are optional. Note 12. This figure includes inspection fees and occupational licenses. Note 13. PBFC requires that you open upon the achievement of a $12,500 membership draft for the first month your Spa is open, This figure does not necessarily mean that you will “break even” or that you will reach any certain financial position. This range is also based on costs for transportation, meals and other expenses associated with pre-opening training. Note 14. PBFC relied on its experience in the tanning and day spa business to compile these estimates. You should review these figures carefully with a business advisor before making any decision to purchase the franchise. Note 15. PBFC does not offer indirect and direct financing to franchisees. Note 16. If you sign a Single Unit Franchise Agreement, your initial investment for your first Spa should be within the range disclosed in this Item 7 chart. The Initial Franchise Fee for each subsequent Spa is set forth in Item 5. You also should be aware that your initial investment for your second and subsequent Spas likely will be higher than the above estimates for your first Spa due to inflation and other economic factors that may vary over time. Note 17. All payments are non-refundable unless otherwise agreed.

A Day in the Life There's no such thing as a typical day at Planet Beach Contempo Spa.

Just ask Brandon and Julie Price, a turbo-charged, entrepreneurial couple who own a successful franchise in Helena, Montana. "Every day is different, and every day is exciting," Brandon Price says. "The beauty of spa ownership is that we are in charge of our own schedule, depending on what's needed. We never get bored, we always have fun and we have this great opportunity to share duties with the kids. We couldn't be happier." The Prices mean business when it comes to family. Brandon's sister Katie is spa manager. It's not just a job for her. Katie sees it as a serious career with a huge opportunity for expansion and education.

Here's a look inside a whirlwind day at the Helena Planet Beach Contempo Spa. 8 a.m. Brandon and Julie divide up the day's duties. The former schoolteachers used to spend a fortune on daycare, but the success of their spa now means their children are at home. Throughout the day, they share and trade duties. There's constant communication, juggling and problem solving. They touch base with Katie. Does she have everything she needs? How are

appointments looking for the day? Who needs their help, and what task needs to be done?

"We love working together," Julie says. "We're creating the best of two worlds: family life and business life." 9 a.m. Katie Price opens the spa. Early customers usually want holistic skin care and hydration treatments because many have not applied their makeup for the day. It's also a popular time for spa members with physical conditions such as fibromyalgiaand arthritis. These clients are finding relief with Planet Beach's infrared heat treatments. Katie and her staff schedule appointments using the Millennium software. 11 a.m. Either Brandon or Julie checks on the flow of morning business. If time permits, they go into "guerilla marketing" mode and plan creative ways to promote Planet Beach services and products. "We like grassroots marketing," Brandon says. "We might go to the local YMCA or Humane Society and hand out coupons for a free massage service or to a local sporting goods store and promote complimentary services for the wives of hunters. We call that one the 'Hunter's Widow' special." Their marketing mindset produces results. They've won several top internal franchisee awards at Planet Beach for sales, management and marketing and have one of the highest membership rates in the Planet Beach Contempo Spa family. 12 p.m. Lunch hour! For members, it means quick, on-the-go treatments: facials, UV tanning, hydration or massage. 3 p.m. "It turns to chaos," Brandon says with a chuckle. "People who've had a hard day flock in. It doesn't slow down until 6:30 p.m." Massage treatments and Mystic Tan spray sunless tanning are two ultra-popular choices. 6:30 - 9 p.m. Slow-down time doesn't mean the spa is empty. College students love these later hours for spa services. "Some customers have a pretty open schedule -- for them time doesn't matter," Brandon says. And it's safe to say the Price children are safely tucked into bed or at least headed that way.

How do I Finance my Contempo Spa?

Need help financing your Contempo Spa? We're here to help. Unlike a lot of franchise companies, we are here to walk you through the process as you prepare your financials and seek out potential lending sources. Financing a franchise is much easier than funding a startup business and we put our expertise to work for you. Today's lending market is vastly different than it was before the recession: the Small Business

Administration (SBA) is still a major lending source and smaller, regional and local banks have stepped up to replace lending in the absence of lending by larger banks. Smaller banks may not have franchising experience and you'll need to come fully prepared with an explanatory packet that helps a banker understand a Contempo Spa. Here are some points you'll need to consider: • Key measurables: Liquid assets, net worth, credit score • Net Worth equal to or greater than total investment, $350K + • Candidate Minimal Requirements: FICO Score 700 or better, favorable income to debt

ratio • Based on 3rd party lending, the banks are going to want to see 20-30% cash injection,

$60K+ in cash/liquid assets • Initial investment range = $135,560 to $289,440

Training and Support

Expert Training Jamie Hagen, Director of Skincare and Nutrition, is completely devoted to training and supporting Contempo Spa franchisees. She conducts live webinars several times a week, teaches at the company's franchise school and conducts numerous regional training tours. "I believe in what I do 110 percent," Hagen says. "We work hard to find the best products and services, and we back them up with expert training and support. It's not at all unusual to see a franchisee exceed their own expectations when they make the most of their training opportunities." All franchise companies promise good training and support. Planet Beach truly delivers! As well they should. Franchising is a unique business model where the franchisor only does well if you do well. Owning a franchise should give you some substantial advantages over mom-and-pop business owners and the single biggest advantage is aggressive training and support. A franchise is a systematized way of doing business and the training and support helps you coax out revenue gains by following a preset system.

How do you know how what you'll really get out of Planet Beach's training and support? "Our franchisees are never alone," says Mandy Bryant Verges, Director for Spa Performance at Planet Beach Contempo Spas. "We have a wide range of resources for our franchise

owners and it all begins long before they first open their doors and continues long after." Planet Beach Contempo Spa support staff work with franchisees on training and marketing strategy from the very beginning, usually several weeks or even months before the spa opens. There's always a lot of legwork to be done: signing a real estate lease, generating leads for pre-sales, learning the ins and outs of equipment, staffing, products and computer systems. Of course, that's only the beginning. Once the spa opens, there are ongoing and ever-changing needs. The Planet Beach Contempo Spa team is there to help with all the twists and turns opening and running a business entails. "Running a franchise is a challenge for new owners but you can count on us to make it fun, too," Verges says. "We have several levels of support, and we have someone who can help with every aspect of the business. New franchise owners go through the learning curve with us at their side which helps even those who have never run a spa become competent in a short period." Help comes in the form of online trainings, live weekly seminars, private telephone consultations, on-site visits, yearly regional conferences, manuals and newsletters. New equipment and retail products are backed up with substantial training and support. Plus, all the critical information needed, including procedure manuals and a large archive of educational webinars, are available at any time online. "In the beginning there's a lot of online conference training," Verges says. "That's also when we help with pre-marketing and pre-sales. There are a lot of techniques, such as offering beginning memberships at a discount, that can help a franchisee make their overhead costs by the time they open their doors." Once a lease has been signed, franchisees are able to attend Planet Beach's Franchise and Manager School, a week-long intensive training program at corporate headquarters. They immerse in a variety of topics, including management, skincare, marketing, customer service and employee relations. When it comes time for the much-anticipated grand opening week, franchisees can work with an on-site specialist for five consecutive days. "We show the franchisee how to execute our system to its highest potential," Verges says. "We have a very successful, proven model already place for the franchisee." Don't take our word for it‚ ask Contempo Spa franchise owners who have been through our training and have experienced our support. You'll find that we both live up to and exceed our promise to provide you with the best training and support in the day spa industry.

Quick Facts • Franchise 500 rank: #383 (2010); #383 (2009) • AllBusiness AllStars Top 300: #243 (2010) • Inc. Top 10 Most Promising Franchises for 2011 Initial Franchise Fee: $20,000 (Single), $39,000 (3-pack), $54,000 (5-pack)

Royalty Fee: 6% Term of Agreement: 20 years Cash Required: $60,000 + Investment Range: $135,560 - $289,440 (single unit) Business Type: Franchise Retail Location Required: Yes SBA Financing: Yes Financing: 3rd Party

Franchise Types Whether you're opening your first franchise or want to expand your existing business experience, we're the perfect franchise for growth. We have 3 options to choose from when deciding what package is right for you! Single Unit: $20,000 3-Pack: $39,000 5-Pack: $54,000

Area Representative Area Representatives oversee the growth of the Planet Beach brand in their territory. As they grow the Planet Beach brand, they receive a percentage of the fees and royalties from the franchises they award. We have a geographically limited number of opportunities available. $.08 USD per capita within a specified DMA, minimum 500,000 population

Salon Conversion Are you a tanning salon owner who is frustrated with limited offerings, seasonal income and competition? Call us and we'll explain the business implications of expanding your target customer base with a low cost alternative to the pricey day spas with an easy conversion from a tanning salon.

Testimonial: "After converting from a tanning salon to a Contempo Spa, I was amazed with the transformation. My clients seemed more relaxed and more satisfied with their overall results. Staff morale even increased. Most astonishing was the increase in sales after I converted. I feel like I won the lottery!" -Cathy Blanchard, LA

Inside Scoop Want to learn more about owning a Contempo Spa franchise? Read what our franchise owners have to say: Charlotte and Sean Nemec, Spokane, WA

"We picked Planet Beach Contempo Spa for two main reasons," says Charlotte Nemec, who co-owns a spa in Spokane, Wa. with her husband Sean.

"The level of service from corporate is top notch, and that's extremely important. We were -- and continued to be -- very impressed with the Contempo Spa concept. We knew that one else in town was going to have the selling point of a fully automated, affordable day spa. It really came down to that. This is

a company that's going to continue to be relevant." Dana and Brad Eilersten, Deer Park, IL

"Health and wellness is really important to our clientele. It's also very important to my family," says Dana Eilertsen, who co-owns a Planet Beach Contempo Spa in Deer Park, IL. with her husband Brad. "People are frugal in the Midwest, so you have to offer them a service that's practical and very valuable. The response to Planet Beach Contempo Spa in

our community is just great. This is a business we feel very proud of." Dana is also pleased with the growing career potential offered by Planet Beach Contempo Spa. "We are constantly recruiting career-minded people out of college," she says. "It's really very exciting. Young graduates see the great promise of the health and wellness industry." Brandon and Julie Price, Helena, MN

Brandon and Julie Price weren't sure Helena, Montana had the population to support a Planet Beach Contempo Spa, but they quickly found out they were wrong when they bought a franchise in 2007. The Helena franchise took off immediately and is one of the most successful in the Planet Beach Contempo Spa network. "In the end, we were willing to put everything on the line for this and it worked out beautifully," Brandon says. "We love the way Planet Beach Contempo Spa zeroes in on health and wellness with unique, affordable services. The inexpensive monthly memberships are perfect for the hard-working, money-conscious families in Helena. It's obvious that Planet Beach is way ahead of the curve." Three years after purchasing the franchise, Brandon says they are "living their dreams." The

couple has much more time for family life with their three young children -- ages 5, 3 and six months. Recently they bought a bigger house and a lake cabin for family getaways. Andrea McNeil, Franchisee Terrytown, LA

Although there are plenty of franchises to choose from, I knew Planet Beach was the right one for me. Planet Beach Franchising Corporation is an established organization consisting of employees who care just as much about the Brand as you will as a Franchisee. I am excited about my new business opportunity and am confident in my investment. The health and wellness industry will continue to grow far into the future!

Meet the Management Team As a franchisee in the Planet Beach system, you have a lot of contact with the home office staff. We are in this business relationship together and everyone at the home office is interested in your success. With that in mind, we want you to get to know our management team:

Stephen Smith, CEO and Chairman Mr. Smith is the Co-Founder of the company and has served as President, Chief Executive Officer and Chairman of the Board of Directors since April 1996. He received a B.A. in Political Science from the University of Mississippi, a Masters in Organizational Management from the University of Phoenix, and the Distinguished Certified Franchise Executive Designation from the International Franchise Association for his work and study in the Franchise industry. Mr. Smith has an extensive business background, which includes being an entrepreneur since 1986. He opened and operated Bodyplex Fitness Center from 1986 through 1989, Bay Street Tanning Boutique from

1988 Through 1989, and was a licensee of three Gold's Gym locations from 1989 Through 1995. Mr. Smith also opened the original Planet Beach location in New Orleans, Louisiana in 1995, which was first called Electric Beach; he still owns this store today. In 1996, Mr. Smith founded Planet Beach Franchising Corporation and began franchising that same year.

Richard L. Juka, Chief Operations Officer and Director Mr. Juka is one of our Co-Founders has served as our Senior Vice President, Chief Operating Officer, Secretary, Treasurer and Director Since July 1996. He has 25 years of management xxperience in retail, wholesale and franchising businesses. Prior to joining Planet Beach Franchising Corporation, Mr. Juka served as Store Director and Field Operator for Pet Smart from 1991 until 1996. He was with Pet Smart during their 1993 Initial Public Offering. Additionally, Mr. Juka worked for two publicly traded companies in the home improvement industry. In 2002, Mr. Juka received the designation of Certified Franchise

Executive from the International Franchise Association for his work and study in the Franchise Industry. He has been a Planet Beach Franchisee since November 2, 2009.

Craig M. Berner, Chief Financial Officer Mr. Berner has served as our Chief Financial Officer since August 2007. Prior to that time, Mr. Berner served as Associate Controller and Director of Accounting for Tulane University from October 1999 to August 2007, where his primary responsibilities included overseeing all financial reporting, developing and monitoring internal controls, managing the operations of the accounting office, and preparing cash forecasts and capital budgets. He was also Manager of Budgeting and Financial Reporting for Tidewater Inc. from March 1998 to October 1999, and was responsible in that position chiefly for all budgeting and financial reporting, preparing quarterly and annual SEC filings,

supervision of accounting staff, and custody of corporation and insurance reserve general ledger accounts. Mr. Berner, who is a Certified Public Accountant, has a B.S. in Accounting from the University of New Orleans and a M.B.A. from the A.B. Freeman School of Business at Tulane University, with a concentration in Finance and Management.

Nancy Price, Senior Vice President of Sales Mrs. Price has studied Health and Physical Education while attending Southeastern Louisiana University from 1986-1990. She has 12 years experience in the Health Club Industry and a total of 29 years experience in Membership Sales, Health and Wellness. Additionally, Mrs. Price acted as the National Marketing Representative for Sydney Frank Importing Company, Inc. from 1988 - 1992 and also served in the role of National Corporate Trainer for the Outside Field Staff of Models and Promoters. Mrs. Price has served as the Senior Vice President of Sales since 1996. She received the designation of Certified Franchise Executive (CFE) from the International Franchise

Association for her work and study in the Franchise Industry. She has also Been a Top 10 Franchisee for Planet Beach Franchising Corporation for 13 Years.

David Q. Mesa, Vice President of International Development Mr. Mesa served eight years in the Unites States Marine Corp as an Air Traffic Controller, receiving an Honorable Discharge. Additionally, Mr. Mesa also served as Director of Business Operations for Allegis Group, a personnel staffing company, for eight years. In March of 2005, he received the designation of Certified Franchise Executive (CFE) by the International Franchising Association for his work and study in the Franchise Industry and has Maintained that designation to date. Mr. Mesa is also a member of the International Institute for Franchise Education (IIFE) Mini MBA Club. In October of 2007, Mr. Mesa

became a Director of Planet Beach International, LLC and is currently Acting Vice President.

Planet Beach Franchise News

Tenacious Former Ms. Planet Beach Wins Big Brother 13

Rachel Reilly takes hot CBS reality show with fierceness that she turns charm

Sticking with what works;

whether a skin care regimen,

weight loss program, or cut-

throat reality show, strategy

makes the difference and one of

Planet Beach’s brightest stars

proved it this week.

Rachel Reilly, Ms. Planet Beach Nevada 2008, emerged the victor in “Big Brother 13.” The

popular CBS show locks roommates from wildly divergent walks of life into a house for 75

days with cameras monitoring their every spat, spree and stand-off. As a contestant on “Big

Brother 12,” Reilly did well but did not win, collecting fans as well as haters during the

season.

Second time was the charm, though most parties admit Reilly was far from charming.

Declared the winner by the show’s seven-member jury — which included her fiance,

Brendon Villegas — Reilly triumphed over 23-year-old Porsche Briggs to earn the $500,000

grand prize.

“Rachel, you’re lucky this is not a personality contest,” fellow veteran Daniele Donato, 25,

sniped as vote in favor of Briggs.

“I have fought,” countered Reilly. “I was a target since I walked through these doors.”

She won six of the show’s coveted Head of Household and Power of Veto competitions and

secured four of the seven final jury votes.

“Oh, it’s going to be a very hard decision,” Villegas, 31, joked as he cast his jury vote for

Reilly on Wednesday’s show. The couple first met during last summer’s Big Brother

installment and got engaged after filming wrapped.

Rachel, now based in Los Angeles, is a fierce competitor. She has beauty, brains, glamour,

athleticism and an uncanny ability to stay top-of-mind among her colleagues and

competitors.

Once considered the villain, Reilly is now a champion. At Planet Beach, we are thrilled for her. We also think she embodies what Planet Beach Contempo Spa is about – creating a unique style, finding what is right for you and sticking with it.

INC Magazine Lists Planet Beach as a Top 10 Franchise

2011 is the year of the automated Day Spa!

Entrepreneur Magazine said franchised day spas were a hot sector of franchising this year

and listed Planet Beach Contempo Spas as a best bet. This week, INC Magazine followed

suit and listed Planet Beach Contempo Spas as one the top 10 franchises for 2011.

Here’s what INC had to say about Planet Beach:

Planet Beach Contempo Spas Franchise

Ten years ago, the spa industry reported yearly revenues of around $5 billion. Now,

according to the International Spa Association, annual revenues generated from spas total

more than $15 billion. One reason for the boom is that an increasing number of men are

frequenting spas. Stephen Smith, the founder of Planet Beach, operated health clubs and

gyms for eight years before establishing Planet Beach in 1995. Based in New Orleans, the

company now operates over 300 franchise units in 38 states and 9 countries, and, according

to a recent statement, the company “expects 2011 to be a promising year.”

As the economy recovers, more and more people are paying attention to Planet Beach Contempo Spas.

AllBusiness.com Ranks Planet Beach ‘Best of the Best’ for 2011

Automated day spa franchise makes list of top 300 franchises

Allbusiness.com ranked Planet Beach Contempo Spas in its annual list of the 300 Franchise

Allstars, a list the company refers to as the “best of the best” in franchising for 2010.

2009 was a tough year for franchising but a handful of franchises such as Planet Beach

Contempo Spas are thriving in the down market. Allbusiness.com ranked Planet Beach #243

in its list of the top 300 franchise systems.

Allbusiness.com compared over 800 franchises with more than twenty-five locations to

determine its ranking. The company website states “We used a number of criteria to rank

our winners: franchise unit growth rate, financial strength, system size, years in business,

years franchising, availability of financing, and Web (brand) visibility to produce the overall

AllStar rank.”

Planet Beach Contempo Spas, an automated day spa franchise and the largest chain of day

spas in the country, was also ranked among Entrepreneur Magazine’s Franchise 500 for

2010.

The Planet Beach Contempo Spa is designed specifically for customers juggling family,

work, and social obligations who also desire a convenient and affordable escape to

relaxation. A Planet Beach Contempo Spa is a franchised twist on a traditional day spa:

members have unlimited access to automated day spa services in private rooms and

treatments for a modest monthly membership fee, allowing them to get regular massages,

facials, spray tans and spa visits for one monthly price.

“Larger numbers of people are seeking relaxation in the tough economy and we’re an

attractive and affordable option for them,” said Stephen Smith, Planet Beach’s CEO. “We’re

posting sales gains in the down economy when many franchisors are experiencing sales

reductions.”

Entrepreneur Magazine Ranks Planet Beach in its Annual Top 500 Franchise List

First of its kind automated day spa thrives in down market

Planet Beach Contempo Spas, an automated day spa franchise and the largest chain of day

spas in the country, was ranked among Entrepreneur Magazine’s Franchise 500 for 2010.

The Planet Beach Contempo Spa is designed specifically for customers juggling family,

work, and social obligations who also desire a convenient and affordable escape to

relaxation. A Planet Beach Contempo Spa is a franchised twist on a traditional day spa:

members have unlimited access to automated day spa services in private rooms and

treatments for a modest monthly membership fee, allowing them to get regular massages,

facials, spray tans and spa visits for one monthly price.

“In today’s market, people are stressed out and crave relaxation and rejuvenation,” said

Stephen Smith, Planet Beach’s CEO. “Our customer base is expanding because we offer day

spa services at far more reasonable rates than traditional spas and we’re happy Entrepreneur

Magazine selected our franchise as one to watch.”

Entrepreneur Magazine’s uses a formula with objective factors that include financial strength

and stability, growth rate and size of the franchise system to evaluate franchises. The 500

franchises with the highest scores make the list.

“We’re posting sales gains in the down economy when many franchisors are experiencing

sales reductions,” said Smith. “Entrepreneur Magazine says that wellness and fitness

franchises are booming and we see that in our system. We offer a spa customer some real

advantages and benefits over traditional day spas. By creating an automated Contempo Spa,

we have created an entirely new sector of the day spa industry.”

Franchisee Reviews: Interviews with Actual Franchise Owners

Interview With Planet Beach Contempo Spa Owner Jennifer Cabrera - brand new area rep for Miami area

Jennifer Cabrera didn’t take the traditional road to Planet Beach Contempo Spa ownership. After years in corporate sales, she knew she wanted to own her own business. She made a move from sales to real estate and mortgage services, but the fit wasn’t right. A member of Planet Beach, she heard about the Ms. Planet Beach Gen X contest and a grand prize package that included a free license. “I entered into the contest, won and here I am now,” she says. In fact, she just celebrated the two-year anniversary of opening the doors at the North Miami Beach Contempo Spa in September and credits the 2009 contest victory with changing her career path. “I am just working right now diligently to grow the Broward area,

build some locations and get the area full of Planet Beaches,” Jennifer says. Planet Beach: How long has your new role as area representative been in the works? JC: I have been interested in it for quite some time. My location is successful, and we have such happy members. Frequently people would come in to tell me they wanted to open their own location, so that is how it happened. I have had a lot of response from people being interested in opening a location. PB: Why Planet Beach? JC: I am really passionate about Planet Beach and what it offers. I thought it would be a perfect fit. PB: How did winning Ms. Planet Beach Gen X change your life? JC: I was a member for two years and I loved the services. I was previously in real estate and in the mortgage business and I needed to make a change. It just kind of evolved: I was a member, I loved the services, and it was something I really was passionate about. I always wanted to open my own business so I entered into the Miss Planet Beach Gen X contest. PB: What is your background? JC: I had been in corporate sales for about 14 years, and I started out working for quite a few Fortune 100 companies. I worked for AT&T, GTE, and in the telecom industry. Then I got into the real estate and mortgage industry when I moved to Florida, and I have been in Miami for about 13 years. I am originally from Texas. PB: What works in your market in terms of getting people in the door? JC: We do Groupon, but our biggest and best referral service is the Ambassador program where you get referrals from your own clients. We do a little bit of everything. We do Groupon, we do events, we do parties and we do business-to-business. We go out to other businesses and co-promote with them, so we do have a combination of everything. PB: What have you liked best about Planet Beach? JC: As a customer, I love the services. Especially the Lumiere Facial -- that is my favorite and I get amazing results. As a franchisee, I love the support that you get from the company. It is like a family and they have so many years of experience to share in terms of what works, whether it is about employees, different marketing events, a pay structure or even scheduling They give you all the tools that you need. PB: Why would you recommend Planet Beach to someone looking to open a franchise? JC: I would recommend it because of the product. It sells itself and the services are amazing. It is very, very affordable and it works well, especially right now with the economy when people do really need to relax. And then, again, all of the support that you get with the franchise. They help you so much and they give you a foolproof system to use. All you need to do is follow the instructions. PB: What do you do in your free time? JC: I don’t have much free time, but I love traveling and I love spending time with my dogs.

Interview with Planet Beach Contempo Spa Franchisee Don Campbell

Don Campbell became a Planet Beach Contempo Spa owner 10 years ago, after stepping away from a high-stress career selling elite clothing lines. Campbell's Longview, Texas, spa shows just how well the Planet Beach brand can do in small and medium markets and is often 'the place to be' in Longview. His Contempo Spa has been named the top performing franchise in the entire Planet Beach network several times.

Planet Beach: How long have you been a Planet Beach Contempo Spa franchisee? Don Campbell: I've been a franchisee for 10 years. PB: Why Planet Beach? DC: Originally, I was interested in the tanning salon side of the day spa and a lot has changed, and very much for the better. Planet Beach Contempo Spa is now on the cutting edge of the health and wellness market. The combination of our automated services and retail products offer what I think is the best opportunity in the day spa industry. It's a great concept and we have fun running our business. SH: How did you hear about us? DC: Planet Beach has a passionate customer base and I first read what the customers were saying about the franchise on the Internet. PB: What's your background? DC: I was a manufacturer's sales rep selling upscale clothing lines for many years. I retired from that, and was looking for a second career, something less stressful and more fun. I'm 63 now, and I can tell you I made the right choice. It was one of the best decisions I ever made. PB: What do you like best about the Planet Beach franchise opportunity? DC: It gives you -- the operator -- the freedom to own your own business. You enjoy all the freedom that goes along with it. I don't have to work the store. I direct and manage the spa director and deal with administrative duties. It's very flexible and gratifying work. PB: What keeps you active in your free time? DC: Fishing, hunting and traveling. PB: Why would you recommend Planet Beach to someone interested in owning a business? DC: It's more affordable than ever. You can set your own schedule. If you put in the effort you can make a very good income. You're not in corporate America; you work for yourself. They have it set up so that you can knock it out of the ball park.

PB: Can you share one of your secrets? What really works for you in your market? DC: There really are no secrets. If you follow the Planet Beach training and franchisee support systems you'll succeed. If you don't you won't. The corporate support is fantastic. PB: What's the most surprising thing you've learned? DC: I'd say it's the ease of ownership. Planet Beach offers a fun, exciting environment. It's a young, aggressive, exciting, fast-moving, forward-thinking company. You can't help but be energized by it. It's also interesting to see how well Planet Beach does in smaller markets. My spa is in Longview, Texas. We‚re a city of about 76,000, a Texas, blue collar, oil-based town. It's not a major metro area. But our spa is consistently one of the top performing ones in the franchise. My Planet Beach Contempo Spa is the place to be in Longview.

Interview with Planet Beach Contempo Spa franchise owner Brent Marek

Brent and Candace Marek have three Planet Beach Contempo Spas in the Raleigh-Durham area of North Carolina and have turned their spa businesses into award winning franchises in the Planet Beach system. Planet Beach: How long have you been a Planet Beach franchisee? Brent Marek: Since December 2003. PB: Why Planet Beach Contempo Spa? BM: I thought Planet Beach had the best business model because the membership stabilizes income from month to month. I like having the residual income coming in - it lets you plan ahead. The retail sales are great, too. Planet Beach has really increased what we have to sell and that's a growing part of our business revenue.

PB: How did you hear about us? BM: We lived in an area that needed a tanning salon / day spa and I looked at franchise opportunities on the internet and contacted four. I am impatient. Planet Beach was the first to get back to me. If it takes a company three weeks to get back to you and you are not even a franchisee yet, good luck. Planet Beach is good to its franchisees and that is important. PB: What's your background? BM: I was in sales for 12 years and was the national marketing manager for the company that makes Bayer Aspirin. I was never home and I lived out of a suitcase. I wanted a better quality of life and starting a business like a Planet Beach Contempo Spa was a great alternative. PB: What do you like best about the Planet Beach Contempo Spa franchise opportunity? BM: I like their model of memberships, which provides stable income, and there is a lot of diversity in terms of services and products, which means a lot of revenue streams. Also, I could do it for myself. PB: What has been most surprising? BM: How expensive mass media is and how ineffective it is. Sixty percent of our leads are business-to-business. We do it every day for an hour, at lunchtimes, promotions on weekends. We just had a pool party at Duke University and there were 300 people there. Those people are coming in this week. It cost us three hours in wages. So what? PB: What keeps you active in your free time? BM: We raise a two-year-old and we like to work four days a week. We work most mornings, take her to day care for only half a day and we can spend time with our family. Owning the franchise has given us freedom to spend time as a family. PB: Why would you recommend Planet Beach Contempo Spa to someone interested in owning a business? BM: It is a great model. Talk to a few franchisees, that is always the best. Look at who is doing good and why. Definitely talk to people who have grown their business and are top-performers. Those are the important people to talk to. look at the Franchise Disclosure Document and know what you are getting into. It's a great business with a bright future.

Franchise Review: Interview with Las Vegas Planet Beach Contempo Spa franchisee Lloyd Zellner

The land of decadence, Las Vegas, seemed like just the right spot for owner Lloyd Zellner to stake his Planet Beach Contempo Spas. The Brooklyn native had semi-retired from business but now has two Vegas locations, which he manages when he is not playing keyboards in the rock band One Way Street. Zellner is a Top Performer in the Planet Beach System and PLanet Beach CEO and

Founder Stephen Smith awarded Zellner the 'game ball' at this year's franchise conference for his help improving the franchise's software system. Zellner is outspoken and hard-driving and runs the largest Planet Beach Contempo Spa in the country. Planet Beach: How long have you been a Planet Beach franchisee? Lloyd Zellner: I’ve owned this store for two years and I am the partial owner of another one that I bought into about 2 ½ years ago. I am the area rep for the Las Vegas area. PB: Why Planet Beach Contempo Spa? LZ: It seemed like a good, hip, modern franchise. I did not want to get into food or anything like that and it seemed like a good concept. Las Vegas is an image oriented city with lots of people involved in the casino and show business; a Contempo Spa makes a lot of sense here and we have members who come in daily. They love it. PB: What’s your background? LZ: I was the chief operating officer for a national bank, chief information officer for a national bank and several other companies prior to that. I was kind of semi-retired when I found out about Planet Beach. PB: Why come out of semi-retirement? LZ: I needed something to do. I wasn’t trying to find something but I'm married and have kids and I'm not the restless type. I really liked the hipness of this franchise and how unique it is in the spa market. PB: What do you like best about the Planet Beach Contempo Spa franchise opportunity? LZ: It’s a challenge. Just like any business is a challenge. The upside when everything comes together, is really good. But it is a lot of hard work. We're planning to open several other Contempo Spas in the Las Vegas area and as the economy recovers, the market is really improving for what we do. To me, it is the challenge of making something happen. PB: Can you share one of your secrets? What really works for you in your market? LZ: Right now the two things that seem to actually work are LivingSocial and Groupon. Marketing is changing and we are doing a lot more social media, PR and online promotions. LivingSocial and Groupon are really helping us grow. PB: What keeps you active in your free time? LZ: I am actually a consultant and do outside IT consulting for other companies. I've helped Planet Beach really improve its internal software and we're on a better technology platform this year than we have ever been. I work when I’m not working. But my expensive hobby is music. I play keyboards. PB: Why would you recommend Planet Beach Contempo Spa to someone interested in owning a business? LZ: It’s a neat concept. Where else can you go and get unlimited spa services for $99 a month? Or where can you get everything and be able to do three or four things in a day, as far as weight loss and nutrition and UV therapy and facials and massages. There is no place around that does that. And that is what makes Planet Beach so cool. It is great to see people’s reactions when they come in. That is the fun part. When the staff is doing well and they are bringing in new members and they are seeing results, they are all happy. We are located in a pedestrian mall across from a large 24-hour fitness center and we have members

who come in every day. As soon as we open, we've got our regulars who really love coming here. Who wouldn't?

Interview with Planet Beach Contempo Spa franchise owner and area representative Kevin Nunes Ten years ago Kevin Nunes had no intention of working in the spa industry. He was already firmly established in the airline industry, but then 9/11 made the future of original career path unclear. Faced with a furlough that lasted more than a year with no guarantee of an end, he began looking for another option. He found one with his Brentwood, CA, Planet Beach Contempo Spa and now represents seven more Contempo Spas in his area. Planet Beach: How long have you been with Planet Beach? Kevin Nunes: I opened my franchise in 2006 and became an area rep in 2007. PB: How did you find your way to Planet Beach? KN: I was in the airline industry and post 9/11 the airlines were cutting jobs, filing bankruptcy and so forth. I was furloughed for about a year and a half and during that time I started looking at my options in case I wasn’t ever going to be called back. I was at the age where going back to school was going to be a little bit more difficult. I had a friend who owned one of the Planet Beach locations here, and he and his wife were very successful. They had done it for several years and enjoyed the lifestyle and the company, so I decided to go ahead and move forward with learning more. The more I learned the more excited about it I became. And here I am. PB: Did you consider any other franchises? KN: Really, just Planet Beach. In fact, I didn’t even realize Planet Beach was a franchise until I started looking into it, but I am definitely happy that I did go the franchise route. I have learned a lot along the way that I probably would never have thought about as an independent business owner. I want to take what I have learned, as far as how to run a business, and apply it to pretty much any concept out there. It has definitely prepared me for the rest of my life. PB: What has been the biggest surprise sine you have been with Planet Beach? KN: I would have to say the changes in the industry. But transitioning from tanning only to the spa concept has solidified our niche and helped to keep things stable. PB: What works in your market to drive memberships? KN: Our main focus is guerrilla marketing and utilizing our networking skills and prospecting skills to generate new and repeat business. We work with fellow businesses to set up advertising co-ops and to do cross promotions, and that has been our biggest success. We work with other businesses to tap into their database and use their extensive knowledge of people and connections to generate traffic. And then we use our own members. The easiest sale is a referral sale, and they are the ones who bring most of the traffic in through word of mouth and referrals. Treating our existing customers the right way is definitely going to be beneficial down the road. PB: What do you do in your spare time?

KN: I have two small children and love spending time with them. I like that lifestyle and I am fortunate enough that Planet Beach has allowed me to be a bit of a work-from-home dad. I really cherish the early years of my children, watching them go to school, going on field trips with them and so forth. A lot of dads don’t get the opportunity to spend that quality time with their children. I have been very blessed to have Planet Beach supply me with the ability to not have to work every day. I have been able to become successful and manage from home. I also really enjoy traveling and fishing and going to Disney Land. We try to go to Disney Land as much as possible with the kids. PB: Is that flexibility one of the things you like best about Planet Beach? KN: Definitely. The business model is so sound that if you train your staff well your employees know exactly what needs to be done each day. In order to accomplish B, you need to have A accomplished. There is kind of a stepping stone for each employee to be successful. The model is easy for to employees to follow because everything is built on everything else. It a waterfall effect. That flexibility has allowed me to work from home and manage my store from home. I go into my shop a few times a week to meet with the staff and do administrative work, but for the most part I have a full-time management team who runs my operation for me. The business model is sound and secure, and I know that by following our business model our sales will be there. Like the movie Field of Dreams, if you build it they will come. If you follow our business model, they will come. PB: Why would you recommend Planet Beach to someone interested in a franchise? KN: I think Planet Beach has the ability to evolve and predict the movement of the industry and what is to come. We showed that resilience in 2005 when we launched the Contempo Spa model. We saw the tanning industry facing challenges so we knew we had to change and solidify our concept, create our own niche market and eliminate the competition. That is really proving to be the cornerstone of our business now. We are constantly evolving and monitoring miniscule evolutions every month in the industry so that we can evolve, too.

Interview with Planet Beach Contempo Spa franchise owner Michael Oubre When Michael Oubre opened his Brusly, La., Planet Beach Contempo Spa location it was a far cry from his background in environmental engineering. But Planet Beach’s creation of a niche in the marketplace appealed to his entrepreneurial spirit. “The fact there wasn’t already a presence in the market of something like this was a big draw,” he says. Planet Beach: How long have you been a Planet Beach franchisee? Michael Oubre: I opened in February 2006. PB: Why Planet Beach Contempo Spa? MO: The area I am in is a suburb of Baton Rouge that is growing. There was a potential there to start something at the right time as far as development goes. And as I was looking for some investment opportunities I came to the conclusion of going in this direction. PB: How did you hear about us?

MO: I started the process in 2005. I did research about various opportunities online, but the fact they were a Louisiana company and based not too far from Baton Rouge was appealing - especially since I had a foothold in the Baton Rouge market already. PB: What's your background? MO: I am an environmental engineer and manager. I work for a large Fortune 300 company based out of Baton Rouge and I manage everything from unexploded ordinance and cleanups to train derailments and that kind of stuff. PB: Can you share one of your secrets? What really works for you in your market? MO: The market where I am at is more localized. It is not as transient as you would have in downtown New Orleans or downtown Houston, where people come in to work and then go back out to the suburbs. I am the suburbs. Most of the people who are my customers ─ or the vast majority ─ I already know. I grew up here and my family is from there. So it is nice because it gives me that much more interaction with people. And as the area grows you get to meet new people and it kind of keeps you grounded. I have a built-in checks and balances. One way or another, if something isn’t right or someone doesn’t like something, they are going to come by the house, or call me, or shoot me an email. To me, that is an advantage. PB: What’s the most surprising thing you’ve learned? MO: People in general! And I’ve learned a lot and that has been a journey. In my day-to-day life I will fall over myself trying to do what my customers need because if I don’t, someone else will. PB: What keeps you active in your free time? MO: I am not married but I have a very serious relationship. No kids. I travel extensively for my career. And I am a diehard LSU fanatic. I went to LSU, graduated from LSU. A bunch of people I grew up with, we take the motor home out on Fridays for LSU football games and stay out until Sundays. I love to cook. I hunt. I am a fanatic of being in the woods and hunting. That is my time of the year: football season and hunting season. And I enjoy working on projects around the house. PB: Why would you recommend Planet Beach Contempo Spa to someone interested in owning a business? MO: It is a lifestyle service. A lot of folks today can’t or won’t jump up and go to Florida for a week or to Cancun for a week because of money. So maybe another way of treating themselves in lieu of that is to go and pamper themselves. I have a couple of customers who come in, put in their earplugs and that is their escape every afternoon. And that is something every owner, manager and employee needs to focus on. Yes, it is discretionary income and yes it varies with the economy. But people are going to spend money and they are always going to want something that makes them feel good. It is important for local owners to keep what they can and need to position themselves as the providers of services that make people feel better. Everybody has to do something to blow off steam. You could spend $1,000 for a week in Cancun, and as soon as you get off that flight back home, it is over. That same $1,000 at Planet Beach allows you to experience the benefit of relaxation and rejuvenation all year long.

Contact Information

Nancy Price Nancy.price@planetbeach.com

David Mesa David.mesa@planetbeach.com