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Smoothie King Franchise Cost In 2022 Worth Profit Potential

Written by: Patrick Findaro
Last Updated by Brenda Bagnoli: November 10, 2022
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This article is based on its 2022 FDD

Smoothie King franchise Inc. (also known as Smoothie King) is an American smoothie company. Smoothie King franchise primarily sells custom blend smoothies and other related nutritional products in order to propel “active and healthy” lifestyles.

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Smoothie King was founded in 1973 in Kenner, LA by Steve and Cindy Kuhnau. As of 2012, Smoothie King was still a privately held company. Wan Kim – a South Korean Smoothie King franchisee since 2002 – bought the company from the Kuhnaus. Kim acquired US$58 million (equivalent to about $68M in 2021) from the Standard Charter Private Equity and the National Pension Fund to grow the company. To succeed in growing the company, Kim had several ideas for Smoothie King. He planned to open 800 new franchises and the company’s first 200 corporately-owned stores. Kim also planned to experiment with selling salads and wraps at these latter locations (in South Korea, they made over 20% of his revenue).

smoothie king franchise

History

 

CEO since 2012, Wan Kim appointed Tom O’Keefe as Smoothie King’s corporate president in 2014. In 2019, he replaced Jennifer Herskind with Rebecca Miller (who was previously with On the Border Mexican Grill & Cantina) as the chief marketing officer. Kim further shuffled his corporate positions in September 2019: chief operating officer Dan Harmon also took on the role of president (replacing O’Keefe), chief development officer Kevin King became the chief business development officer, and Miller was promoted to head of field marketing.

Predominantly in the United States, Smoothie King also has locations in South Korea, the Cayman Islands, Trinidad and Tobago, and previously had shops in Singapore (Smoothie King left the Singaporean market in 2016). In 2018, the company opened its 1001st store.

As of today, there are 1051 locations of the company in the USA and 1300+ locations worldwide.

Smoothie King was ranked the #1 Juice Bar Franchise on Entrepreneur Magazine’s Annual Franchise 500 list through 2020, marking the 28th year the brand has occupied the top spot. The ranking is primarily based upon financial strength and stability, growth rate, and system size. They are also the #1 ranked Smoothie brand focused on health and fitness and currently have over 1,300+ stores with another 100+ opening in the next year.

How is Smoothie King Franchise Positioned in the Food and Beverage Industry?

The Food and Beverage industry in the USA accounts for 13% of all manufacturing employment in the country. Around 1.46 million people are employed in this industry. Food franchises make up to 36% of the total franchise establishments in the USA and it is expected to create 1.6 million more jobs by 2027. The annual growth rate in the industry is around 2% and the EBITDA multiplier is around 3x for a single restaurant. Multiples can go up to 7x for 5+ restaurants.

How Much is a Smoothie King Franchise?

The initial Smoothie King Franchise Fee is $25,000 – $30,000 for a traditional location and $15,000 for a non-traditional location. You have to pay this upfront fee when opening a Smoothie King franchise.

Smoothie King Franchise Cost

 The estimated total investment necessary to begin the operation of a Smoothie King Franchise ranges from $320,301 – $585,465 for an End-Cap or In-Line location but $723,501 – $1,184,865 for a Free-Standing Drive-Thru location. The following costs are part of the upfront costs included in the initial investment for a Smoothie King. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy a Smoothie King franchise in 2022.

Image of multiple smoothies

(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$5,001 – $30,000
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 $ 100,000 – $130,000
Architectural & Engineering Professional Services$ 3,500 – $14,500
Signage$ 7,000 – $14,000
Leasehold Improvements$ 120,000 – $240,000
Legal, Accounting, and Organizational Costs$500 – $4,000
Misc. Costs$ 1,000 – $5,000
Drive-thru$ 0 – $33,750
Additional Funds – 3 months$ 15,000 – $25,000
TOTAL$320,301 – $585,465

Buy FDD Smoothie King

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$5,00 – $30,000
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 $ 100,000 – $130,000
Architectural & Engineering Professional Services$ 42,000 – $52,000
Signage$ 28,000 – $38,000
Leasehold Improvements$ 425,000 – $750,000
Legal, Accounting, and Organizational Costs$500 – $4,000
Misc. Costs$ 1,000 – $5,000
Drive-thru$ 25,000 – $33,750
Additional Funds – 3 mos$ 25,000 – $33,750
TOTAL$ 723,501 – $1,184,865

Smoothie King Franchise Requirements

Below are the financial requirements to open a Smoothie King in the United States:

Investment Range:

○     Endcap or inline location: $320,301 – $585,465

○     Free-standing Drive-thru location: $723,501 – $1,184,865

  • Minimum Net Worth (1 Store): $300,000
  • Minimum Liquidity (1 Store): $100,000
  • Minimum Credit Score: 700

smoothie king

Owning a Smoothie King Franchise Requires Ongoing Fees

Operating Fee: 6% of Gross Sales (Subject to a monthly minimum fee of $500)

National Marketing Fee: Currently 3% of Gross Sales

Regional Marketing Fee: If established in a region where the Unit is located, not to exceed 2% of Gross Sales.

Local Marketing Requirement: Minimum of 2% of Gross Sales.

How much do Smoothie King franchise owners make?

Since Smoothie King does not provide separate sales data for the different types of locations, we will take the lowest and highest estimate from all four values and assume it to be the midpoint investment. You should do your own calculations using whichever figures you like once you decide what kind of location you want to open and determine an estimate of your initial costs.

Average Net Sales of USA Units – December 31, 2019 to December 28, 2020

 Top 10%Top 25%Top 50%Top 75%TOTAL (All)
No. of Units in Category82206413620827
Average Net Sales$935,280$793,456$672,270$593,329$521,461
Number or Percent that Met or Exceeded the Average Net Sales in Category32/39%84 / 41%162 / 39%244 / 39%252 / 43%
Median Net Sales $898,175$751,827$623,662$549,148$490, 938
Range of Net Sales (high)$1,636,073$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$131,024
 Bottom 10%Bottom 25%Bottom 50%Bottom 75%TOTAL (ALL)
No. of Stores in Category82206413620827
Average Net Sales$247,246$305,821$370,726$430,924$521,461
Number or Percent that Met or Exceeded the Average Net Sales in Category48/ 59%117 / 57%228 / 55%315 / 51%352 / 43%
Median Net Sales $247,246$316,099$384,973$433,199$490,938
Range of Net Sales (high)$299,626$383,008$490,825$623,252$,636,073
Range of Net Sales (low)$131,024$131,024$131,024$131,024$131,024

2020 Smoothie King Median Franchise Sales: $490,938

Initial investment (midpoint)%Profit margin of average franchise salesEstimated ProfitsTime to recoup investments
$752,58310%$49,09315 years
15%$73,64010 years
20%$98,1877.5 years

Based on the median sales provided by Smoothie King’s franchise locations for 2020, at an average of a 15% profit margin it will take around 10 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.

Average Net Sales of USA Units – December 29, 2020 To December 27, 2021

 Top 10%Top 25%Top 50%Top 75%TOTAL (All)
No. of Units in Category88220440660880
Average Net Sales$1,062,545$907,346$775,979$689,233$609,753
Number or Percent that Met or Exceeded the Average Net Sales in Category36/ 41%84 / 38%176 / 40%266 / 40%377 / 43%
Median Net Sales $1,014,225$855,618$730,050$643,696$573,269
Range of Net Sales (high)$1,605,120$1,605,120$1,605,120$1,605,120$1,605,120
Range of Net Sales (low)$896,948$730,074$573,792$461,013$156,243
 Bottom 10%Bottom 25%Bottom 50%Bottom 75%TOTAL (ALL)
No. of Units in Category88220440660880
Average Net Sales$304,367$371,310$443,526$510,555$609,753
Number or Percent that Met or Exceeded the Average Net Sales in Category50/ 57%124 / 56%274 / 56%339 / 51%377 / 43%
Median Net Sales $313,983$385,209$460,896$514,148$573,269
Range of Net Sales (high)$363,472$460,778$572,747$730,026$1,605,120
Range of Net Sales (low)$156,243$156,243$156,243$156,243$156,243

2021 Smoothie King Median Franchise Sales: $573,269

Initial investment (midpoint)%Profit margin of average franchise salesEstimated ProfitsTime to recoup investments
$752,58310%$57,32613 years
15%$85,9908.75 years
20%$114,6536.5 years

Based on the median sales provided by Smoothie King’s franchise locations for 2020, at an average of a 15% profit margin it will take around 10 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.

TABLAS

Based on the median sales provided by Smoothie King’s franchise locations, at an average of a 15% profit margin it will take around 8.75 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.

Many factors affect the sales, costs, and expenses of your Franchised Store. Such as the Franchised Store’s size, geographic location, menu mix, and competition in the marketplace. The presence of other Food and Beverage stores; the extent of market penetration and brand awareness that Smoothie King stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.

Is the Smoothie King Franchise Profit Worth the Franchise Cost?

To assign a valuation multiple for Smoothie King franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.

Estimated Selling Price = Net Sales * 0.44

When you go to sell a Smoothie King franchise based on the median multiple of .44 and net sales averaging between 2020 and 2021 of $532,103, it would sell for $234,125. This is significantly lower than the midpoint investment of $752,583.

The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.

The Average Unit Volume (AUV) for Smoothie King Franchised Stores is $609,753.

Below you can see some listings of existing Smoothie King franchises.

Network of 3 Smoothie King Franchises in VA

Manassas, VA (Manassas City Country)
smoothie king
Asking Price:$619,000Cash Flow$154,250
Gross Revenue:$1,558,500InventoryN/A
EBITDA:N/AEstablished2015
FF&E:$1,050,000  

Smoothie King Franchise in Prime Location For Sale

Sterling, VA (Loudoun Country)
Smoothie King Featured Image
Asking Price:$49,500Cash Flow:$50,000
Gross Profit$300,000Inventory:N/A
EBITDA:N/ARent:$4,166.67 per Month
FF&E:$0Established:2015

Smoothie King Franchise For sale in Southern Virginia

Virginia
smoothie king
Asking Price:$499,000Cash Flow:$145,000
Gross Revenue:$660,000Inventory:N/A
EBITDA:N/ARent:N/A
FF&E:$0Established:2008

Network of 5 Smoothie king Franchise Stores in Texas

Texas
smoothie king franchise
Asking Price:$2,300,000Cash Flow:$572,000
Gross Revenue:$3,565,000Inventory:N/A
EBITDA:N/AEstablished:N/A
FF&E:$1,750,000  

The above listings are from BizBuySell – we can see that there is a huge variation in the asking price to cash flow ratio or asking price to revenue ratios. As such, you should speak to an accountant, look over the franchise’s financials, and build your own financial projects and valuations before buying an existing Smoothie King franchise.

Smoothie King (Franchisor) Income Statement Key Insights:

Income Statements

 Years ended December 27, 2021, December 28, 2020, and December 30, 2019
202120202019
Renevues   
Franchise fees and royalties$46,751,455$37,920,191$46,340,137
Operating cost and expenses   
Depreciation and amortization1,088,5081,170,6661,365,007
General and administrative27,022,19720,875,56325,145,656
Relocation expenses229,016
Total operating cost and expenses28,110,70522,046,22926,739,679
Operating income18,640,75015,873,9629,600,458
Other income, net6,6392,143,03845,209
Income before income taxes18,647,38918,017,0009,645,667
Income tax expense4,929,9225,375,7142,883,479
Net income$13,717,.467$12,641,286$6,762,188

Smoothie King is a very profitable business for the franchisor with retained earnings of 13.71$ million in 2021. Compared to 6.7$ million in 2019, they saw an increase of over 100% from 2019 to 2021. This is a good indication of high growth as a company overall.

Image of multiple smoothies

How many Smoothie King units have opened and closed?

Unit typeYearUnits at the Start of the YearUnits at the End of the YearNet Change
Franchised2019871931+60
2020931968+37
2021968995+27
Company Affiliate Owned20192938+9
20203840+2
20214056+16
Total Units2019900969+69
20209691008+39
202110081051+43

Over the last three years, the company has been expanding. Both franchising units and company-operated stores have increased. Over the last three years, franchises have opened at a rate of 50 units a year. This is an indicator that the stores are performing very well. The company grew 16.7% in the number of stores between 2019 and 2021. The number of franchise locations went up from 871 to 995 – a 14.23% growth rate.

Conclusion

Altogether, the financial performance of the average Smoothie King franchise unit and the growth of the franchise system show 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. While this may be the business for you, make sure also to check out other companies offered in the Food and Beverage Industry.

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