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Smoothie King Franchise: Costs, Profits, and More

Smoothie King Featured Image

Smoothie King primarily sells custom blend smoothies and other related nutritional products in order to propel “active and healthy” lifestyles. The franchise concept was founded in 1973 by Stephen C. Kuhnau under the name “Smoothies with a Purpose”. Its first juice bar franchise opened in 1989 in New Orleans, Louisiana. Smoothie King Co. is currently headquartered in Dallas, Texas. The current CEO of Smoothie King is Sung-Wan Kim. He was formerly the President and Chief Executive Officer of Smoothie King Holdings Inc. (formerly known as Smoothie King Korea, Inc.)

Smoothie King Franchise Cost

End-Cap or In-Line Location

The initial franchise fee ranges from $25,000 to $30,000. The fee is $15,000 for a non-traditional location.

The estimated total initial investment ranges from $268,900 to $555,965.

Free Standing Drive-thru Location

The initial franchise fee ranges from $25,000 to $30,000. The fee is $15,000 for a non-traditional location.

The estimated total initial investment ranges from $589,300 to $858,900.

Image of multiple smoothies

Additional Cost Breakdown

End-Cap or In-Line Location

Additional Cost Breakdown

Initial Franchise Fee$25,000 – $30,000 ($15,000 for a non-traditional location)
Three Months Rental & Deposits$3,000 – $40,000
Technology Systems$9,100 – $12,215
Grand Opening MarketingNew Unit: Minimum of $15,000
Travel and Training Expenses$2,700 – $6,000
Insurance (First Years Premium)$ 3,500 – $7,500
Other Prepaid Expenses$ 1,000 – $2,500
Start – up supplies and inventory$ 12,000 – $16,000
Furniture, fixtures, and equipment, millwork, and graphics $ 70,600 – $115,500
Architectural & Engineering Professional Services$ 3,500 – $14,500
Signage$ 7,000 – $14,000
Leasehold Improvements$ 100,000 – $215,000
Legal, Accounting, and Organizational Costs$500 – $4,000
Misc. Costs$ 1,000 – $5,000
Drive-thru$ 0 – $33,370
Additional Funds – 3 mos$ 15,000 – $25,000
 

Free-Standing Drive-thru Location

Additional Cost Breakdown

Initial Franchise Fee$25,000 – $30,000 ($15,000 for a non-traditional location)
Three Months Rental & Deposits$3,000 – $40,000
Technology Systems$9,100 – $12,215
Grand Opening MarketingNew Unit: Minimum of $15,000
Travel and Training Expenses$2,700 – $6,000
Insurance (First Years Premium)$ 3,500 – $7,500
Other Prepaid Expenses$ 14,700 – $29,400
Start – up supplies and inventory$ 12,000 – $17,000
Furniture, fixtures, and equipment, millwork, and graphics $ 80,100 – $115,500
Architectural & Engineering Professional Services$ 42,000 – $52,000
Signage$ 28,000 – $38,000
Leasehold Improvements$ 312,700 – $428,535
Legal, Accounting, and Organizational Costs$500 – $4,000
Misc. Costs$ 1,000 – $5,000
Drive-thru$ 25,000 – $33,370
Additional Funds – 3 mos$ 15,000 – $25,000
 

Ongoing Costs and Fees

There are several ongoing fees associated with a Smoothie King franchise. The first is an operating fee, which is 6% of gross sales or a monthly minimum fee of $500, paid on a monthly basis.

There are also several advertising and marketing fees that come with running a Smoothie King franchise. The first is a national marketing fee, which is currently 3% of gross sales. There is also a regional marketing fee, which is not to exceed 2% of gross sales.

The local marketing requirement is a minimum of 2% of gross sales. Finally, the last marketing payment is the grand opening advertising payment, which is a minimum of $15,000 for all new units and a minimum of $10,000 for relocated units.

How Much Do Smoothie King Franchisees Make?

The following chart shows the average net sales of Smoothie King Units from the latest fiscal year (2020).

The vast majority of Smoothie King franchisees, or the top 75% made $593,329 in net sales over one year. 

Given the estimated initial investment of a Smoothie King franchise can be as high as $858,000, it is important to invest less money to start a location. If you invest $500,000+ to start a Smoothie King location, it could take you 5+ years to recuperate your initial investment.  

By the end of the first year, it is likely that the average franchisee will be able to break even and then some. 

The least amount of expected sales that a Smoothie King franchise owner could make, according to the bottom 10% of units, is $247,246. 

Average Net Sales of Smoothie King Units

 Bottom 10%Bottom 25%Bottom 50%Bottom 75%
No. of Stores in Category82206413620
Average Net Sales$247,246$305,821$370,726$430,924
Number or Percent that Met or Exceeded the Average Net Sales in Category48/ 59%117 / 57%228 / 55%315 / 51%
Median Net Sales $258,452$316,099$384,973$433,199
Range of Net Sales (high)$299,626$383,008$490,825$623,252
Range of Net Sales (low)$131,024$131,024$131,024$131,024

Average Net Sales of Smoothie King Units

 Top 10%Top 25%Top 50%Top 75%
No. of Stores in Category82206413620
Average Net Sales$935,280$793,456$672,270$593,329
Number or Percent that Met or Exceeded the Average Net Sales in Category32/ 39%84 / 41%162 / 39%244 / 39%
Median Net Sales $898,175$751,827$623,662$549,144
Range of Net Sales (high)$1,636,073$1,636,073$1,636,073$1,636,073
Range of Net Sales (low)$794,559$623,954$492,127$386,544

Average Unit Net Sales Percentage Increase

Comparison YearNumber of UnitsAverage percentage (same store sales) increaseNumber / Percentage of Units that Met or Exceeded Average Percentage IncreaseMedian Percentage Increase
2020 v 20198272.46%415 /50%2.61%
2019 v 20188061.43%408 / 51%1.56%
 2018 v 20177380.36%342 / 46%0.45%
2017 v 20166601.23%331 / 50%1.29%
2016 v 20155859.38%275 / 47%8.73%
2015 v 20145209.79%260 / 50%9.64%
 

Another important metric to look at is the increase in net sales percentage increase. The following table shows how net sales numbers have increased from the previous fiscal year.

From 2019 to 2020, same-store net sales increased by 2.46%. For almost the past decade, same-store sales have increased, although there was a lag in growth in the years 2017-2018. However, growth has been revitalized since then and the increase in same store net sales has been growing steadily.

Overall, these numbers show that Smoothie King is a financially stable and significantly profitable franchise concept.

 

Number of Units Opened/Closed

Franchised

At the end of 2018, there were 871 Smoothie King franchised units for a net change of +84 units.

At the end of 2019, there were 931 Smoothie King franchised units for a net change of +60 units.

At the end of 2020, there were 968 Smoothie King franchised units for a net change of +37 units.

Company-Owned

At the end of 2018, there were 29 Smoothie King corporate owned units for a net change of +1 unit.

At the end of 2019, there were 38 Smoothie King corporate owned units for a net change of +9 units.

At the end of 2020, there were 40 Smoothie King corporate owned units for a net change of +2 units.

Total

At the end of 2018, there were a total of 900 Smoothie King units for a net change of +85 units.

At the end of 2019, there were a total of 969 Smoothie King units for a net change of +69 units.

At the end of 2020, there were a total of 1008 Smoothie King units for a net change of +39 units.

Overall, the franchised Smoothie King units have been growing at a much faster rate than the corporate owned units. Even in 2020, with the COVID-19 pandemic, there was a net positive change in the number of units. Furthermore, there are significantly more Smoothie King franchises than corporate owned units, proving that the franchisor has invested a lot of their resources into their franchise system.

These metrics show that the Smoothie King franchise system is stable and has a lot of potential for growth. Furthermore, there is a lot of operational support for franchisees, given that most of the Smoothie King units are franchised.

Conclusion

Altogether, the financial performance of the average Smoothie King franchise unit and the growth of the franchise system shows that it is a reliable franchise system and could be worth your investment.

The Food and Beverage industry is one of the largest, most diverse, and most established franchise industries. Although it has a high amount of competition at 3.10, on a scale of 0 (low) to 4 (high), it also has a high industry trend multiple at 2.70 on the same scale as above. The Food industry is also relatively marketable at a 2.9 multiple on a 4.0 scale.

Interested in investing in a Smoothie King franchise, or looking for other opportunities in the Food and Beverage industry? Make sure to check out the Vetted Biz listings page to explore thousands of franchise and business opportunities available to you.

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