Published on 23 Aug 2021 Time 10 min read Last update by 29 May 2024

Smoothie King Franchise Cost in 2024 Worth Profit Potential

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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.

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).

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.


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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.

(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 Marketing New 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

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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 Marketing New 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

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 Category 82 206 413 620 827
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 Category 32/39% 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 Category 82 206 413 620 827
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 Category 48/ 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 sales Estimated Profits Time to recoup investments
$752,583 10% $49,093 15 years
15% $73,640 10 years
20% $98,187 7.5 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.

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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 Category 88 220 440 660 880
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 Category 36/ 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 Category 88 220 440 660 880
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 Category 50/ 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

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2021 Smoothie King Median Franchise Sales: $573,269

Initial investment (midpoint) %Profit margin of average franchise sales Estimated Profits Time to recoup investments
$752,583 10% $57,326 13 years
15% $85,990 8.75 years
20% $114,653 6.5 years

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.

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Network of 3 Smoothie King Franchises in VA

Manassas, VA (Manassas City Country)

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Asking Price: $619,000 Cash Flow $154,250
Gross Revenue: $1,558,500 Inventory N/A
EBITDA: N/A Established 2015
FF&E: $1,050,000

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Smoothie King Franchise in Prime Location For Sale

Sterling, VA (Loudoun Country)

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Asking Price: $49,500 Cash Flow: $50,000
Gross Profit $300,000 Inventory: N/A
EBITDA: N/A Rent: $4,166.67 per Month
FF&E: $0 Established: 2015

Smoothie King Franchise For sale in Southern Virginia

Virginia

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


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Network of 5 Smoothie king Franchise Stores in Texas

Texas
Asking Price: $2,300,000 Cash Flow: $572,000
Gross Revenue: $3,565,000 Inventory: N/A
EBITDA: N/A Established: 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
2021 2020 2019
Renevues
Franchise fees and royalties $46,751,455 $37,920,191 $46,340,137
Operating cost and expenses
Depreciation and amortization 1,088,508 1,170,666 1,365,007
General and administrative 27,022,197 20,875,563 25,145,656
Relocation expenses 229,016
Total operating cost and expenses 28,110,705 22,046,229 26,739,679
Operating income 18,640,750 15,873,962 9,600,458
Other income, net 6,639 2,143,038 45,209
Income before income taxes 18,647,389 18,017,000 9,645,667
Income tax expense 4,929,922 5,375,714 2,883,479
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.

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How Many Smoothie King Units Have Opened and Closed?

Unit type Year Units at the Start of the Year Units at the End of the Year Net Change
Franchised 2019 871 931 +60
2020 931 968 +37
2021 968 995 +27
Company Affiliate Owned 2019 29 38 +9
2020 38 40 +2
2021 40 56 +16
Total Units 2019 900 969 +69
2020 969 1008 +39
2021 1008 1051 +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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