Overcoming users' fears with good UX
As with any new technology, it's important to alleviate your users' fears about their privacy with a good UI.
Instead of just using the default location permission dialog box, it's important to tell the user why you want permission for their location with a full description. What's more, since iOS 7, you have been able to add this description using the NSLocationUsageDescription key in the app's info.plist file.
It's also important to ask for location at a relevant point; don't just spring the request on your user as soon as they start the app; otherwise, they're likely to deny your request.
Finally, only get the location if you have to. There's no quicker way to get a user to delete your app than by spamming them with marketing messages.
My final piece of advice when developing apps with beacons is to look at your app as a user and not just a developer. If your piece of functionality feels right from a user...
