Do you want to open a juice bar business by buying Smoothie King franchise? If YES, here is how much it cost to open a Smoothie King franchise successfully. The juice and smoothie bar franchise segment in the United States is ripe for investment. The rapidly growing industry is expected to outgrow $3 billion in 2020. For smoothie bars, high product demand, coupled with low overhead costs and simple operations, can align together to create an unparalleled business opportunity.

Many prospective smoothie bar owners seek out turnkey franchise models, which offer them a pre-determined investment range that clarifies initial expenses and ongoing operational costs. However, Smoothie King is here to offer that and a lot more.

Smoothie King is a privately held New Orleans, Louisiana – based Franchise Company and it is the premier Smoothie Bar and Nutritional Lifestyle Centre in the industry. Smoothie King Centres offer their guests the industry’s first and original nutritional fruit and function-based fresh blended smoothies.

Each “Lifestyle Centre” also offers healthy retail product solutions in sport beverages, energy bars, healthy snacks, vitamin supplements, and herbs, minerals, and sports nutrition products.

Right from 1989, Smoothie King was been proclaimed #1 franchise in their category 16 times. Smoothie King has about 600 locations operating in the continental US and Seoul, Korea and is presently developing additional stores across the United States.

According to the company, the ideal size range for a Smoothie King Franchise is generally 800 – 1,600 square feet. However, smaller or larger stores are an option. They’re usually located in neighbourhood and community strip centres, power centres, shopping malls, universities, airports, and downtown business districts.

The optimal area typically has a strong residential population, strong daytime employment, dynamic retail activity and proximity to fitness (gyms, large parks, etc). It also has good street visibility and presence as well as good ingress and egress. The company also prefers a drive – thru when possible.

Smoothie King’s ideal customer is a millennial who is between the ages of 16 and 35. The company’s focus is 55% skewed towards women. They are steadily looking for starter families, baby boomers, and established Americans.

Smoothie King offers a premium product, so all guests are expected to have some ancillary income in order to frequent the locations on a regular basis. Therefore, the company strives to find locations among the average household incomes, or higher for a given market.

Since the actual results of individual franchises are based on factors that are not within the control of Smoothie King, the company does not provide estimates of profits or revenues. After consulting with a Smoothie King Franchise Development Manager and reviewing the Franchise Disclosure Document (FDD), you will have the opportunity to contact existing franchisees regarding their experiences.

Each qualified candidate receives a copy of the Smoothie King Franchise Disclosure Document (FDD), which provides the following information and more: franchisor’s financial statements, copy of the franchise agreement, copy of the area development agreement, list of existing franchisees to contact, cost breakdowns, advertising fees, royalties, and initial franchise fees.

Financial Requirements of Opening a Smoothie King Franchise

According to Smoothie King FDD, here are major fees to expect when acquiring this franchise. However, note that all fees are payable to Smoothie King and apply to the Franchise Agreement. The fees are non – refundable. Occasionally, Smoothie King waives or reduces certain one – time fees, otherwise the fees are uniformly imposed unless otherwise noted.

Also note that during the term of the Franchise Agreement, Smoothie King may offer optional services not presently contemplated for which Smoothie King may charge a fee. All fees apply to both Traditional and Non – Traditional locations unless otherwise noted.

Table of Content

1. Initial Franchise Fee – Traditional Location:  $24,000 to $30,000

  • You are expected to pay a $30,000 lump sum initial franchise fee when you sign the Franchise Agreement.
  • If you are an existing franchisee in good standing and meet Smoothie King’s qualifications, Smoothie King may approve you to develop an additional Unit.
  • Once you are an existing franchisee in good standing and meet Smoothie King’s qualifications, for the second Unit and each subsequent Unit, Smoothie King will offer you a reduced initial franchise fee equal to $25,000.
  • Smoothie King is a member of the International Franchise Association’s VetFran program. If you are an active member of the United States Armed Forces or if you have been honourably discharged from the United States Armed Forces, you are expected to be eligible for a discount of 20% off the initial franchise fee.

2. Initial Franchise Fee – Non – Traditional Location:  $15,000

You are expected to pay a lump sum initial franchise fee of $15,000 when you sign the Franchise Agreement for a Non – Traditional location. The initial franchise fee is not refundable under any circumstances.

3. Development Fee: $12,500 for each Unit that you are authorized to develop after the first franchise

  • You are expected to pay a lump sum development fee when you sign the Development Agreement.
  • Note that the development fee is calculated at the rate of $12,500 for each Unit that you are authorized to develop after the first franchise. For example, if you enter into a Development Agreement to establish your first Unit and an additional four Units, your development fee will be $50,000.
  • Development fees will be applied to the franchise fees for each Unit opened under your Development Agreement.
  • The development fee is not refundable under any circumstances.
  • Coupled with the development fee, you are expected to sign a Franchise Agreement and pay the initial franchise fee for your first Unit at the same time you sign the Development Agreement unless you are a current Smoothie King franchisee.
  • If you are a current Smoothie King franchisee, you are expected to sign a Franchise Agreement and pay the initial franchise fee at least four months before your Unit is scheduled to open or before the beginning of the site selection process, whichever occurs first.
  • Under the Development Agreement, the initial franchise fee for the first Unit is $30,000. The initial franchise fee for the second and each subsequent Unit is $25,000.
  • Each initial franchise fee under the Development Agreement is for a Traditional location; the right to develop Units under a Development Agreement does not include Non – Traditional locations unless specifically agreed upon in writing by Smoothie King.

4. Other Initial Fees Before the Smoothie King Business Opens

  • Coupled with the initial franchise fee and, if applicable, the deposit described above, you are expected to pay Smoothie King up to $2,500 for design fees for your Unit premises.
  • Note that these fees are not refundable under any circumstances.
  • You are also expected to acquire the hardware for the Brink POS System and Data Central Back Office System from Smoothie King. The hardware costs approximately $4,500 to $10,000. These costs are not refundable under any circumstances.
  • Once you fail to open your Unit for business within 18 months from the date you sign the Franchise Agreement, you may extend the date by which you need to open the Unit by up to 6 additional months, if you pay Smoothie King a monthly extension fee of $1,000 at the beginning of each such month. For each month in which you pay a monthly extension fee, you do not have to pay a minimum Operation Fee.

5. Operating Fee:  6% of Gross Sales, subject to a monthly minimum fee of $500

  • Due Date: Accounting paperwork due within 2 business days after the end of each month; payment due by the 16th of each month for the prior month’s fees.
  • Gross Sales is simply referred to as all products and services sold in or from the Unit. This includes concessions off premises, catering, and delivery. Gross Sales do not include any excise or sales tax. In the past, Smoothie King has reduced or waived the royalty fee for certain locations.
  • Additionally, Smoothie King reserves the right to include in Gross Sales all ancillary charges or fees, including delivery service fees, that a customer pays to Smoothie King or any third party in connection with the acquirer of any products or services sold in connection with the Unit.
  • Upon the earlier of (i) you opening and operating the Unit and (ii) the beginning of the 16th full calendar month after the effective date of your Franchise Agreement, you are expected to pay Smoothie King an Operating Fee equal to the greater of $500 each calendar month or 6% of Gross Sales.

6. National Marketing Fee:  Presently 3% of Gross Sales; Smoothie King has the right to increase the Fee to 5% of Gross Sales upon 60 days’ notice

  • Due Date: Same as Operating Fee.
  • You are expected to pay Smoothie King the National Marketing Fee, beginning on the date you open for business.
  • The National Marketing Fee is presently 3% of monthly Gross Sales. Smoothie King may increase the National Marketing Fee up to 5% of monthly Gross Sales with 60 days’ notice.

7. Regional Marketing Fee:  if established in a region where the Unit is located, Smoothie King will determine the amount of the Fee, not to exceed 2% of Gross Sales

  • Due Date: Same as Operating Fee.
  • Any contribution to the Regional Marketing Fund will be credited to your local marketing requirement.

8. Local Marketing Requirements:  minimum of 2% of Gross Sales

  • Due Date: As incurred.
  • Any contribution to a Regional Marketing Fund will be credited towards your local marketing requirement.
  • Except for Non – Traditional locations, Smoothie King may require you to pay all or any part of the local advertising and marketing fee to a Regional Marketing Fund if one is established in your area.

9. Grand Opening Advertising:  minimum of $15,000 for all locations

  • Due Date: Paid to approved suppliers when expenses are incurred during the 4 – week period before and within 3 months after the opening of your Unit.
  • Paid to approved suppliers.
  • You are expected to submit to Smoothie King a single report of all expenditures within 90 days of opening. If you fail to spend $15,000, Smoothie King will collect the shortfall and deposit it into the National or Regional Marketing Fund.

10. Interest on Late Payments:  18% per annum or maximum rate allowed by law, if less than 18%

  • Due Date: After the date payments are overdue.

11. Training Fees:  There is no charge for initial training programs for the first two trainees. Substantial fee may be charged for additional trainees to attend.

  • Due Date: As incurred. Presently not charged.
  • Immediately after the initial training program, Smoothie King may require you to pay Smoothie King a substantial fee for other personnel to attend the same, or other, training programs.
  • You are expected to pay all personal expenses you and/or your employees incur to attend training programs, including costs and expenses of transportation, lodging, meals, wages, and employee benefits.
  • Smoothie King reserves the right to charge substantial fees for materials and participation in any training courses or seminars, but Smoothie King will not charge for the attendance by up to two persons representing you at the initial franchise management training program.

12. Remodel Costs: 5 years:  $0 – $15,000 for materials; transfer:  $0 – $15,000 for materials

  • Due Date: After 5 years from date the Franchised Business opens for operation, upon transfer of Unit, or upon renewal.
  • Note that these amounts are for materials only and are payable to third – party suppliers. Labour costs will vary based on where you are located.
  • If a transfer occurs at the time a mid – term or renewal upgrade is due, those upgrade costs shall apply.

13. Audit Fees: Audit discrepancies and substantial actual costs of conducting audit

  • Due Date: After audit and audit costs if gross sales are understated by 2% or more.

14. Transfer Fees – Franchise Agreement: $7,500 to $125,00; Transfer Fees – Development Agreement:  10% to 20% of the then – current initial franchise fee

  • Due Date: Prior to closing.
  • These Fees may be reduced under certain circumstances (e.g., Smoothie King will consider a reduced fee for transfers to immediate family members).
  • Note that the amount of the transfer fee depends upon whether you are transferring your interest to a current Smoothie King Business manager, franchisee, or developer and whether the transfer will require a new location for the Business.

15. Securities Offering Fee – Franchise and Development Agreement:  not to exceed $25,000

  • Due Date: Upon your review of Securities Offering.

16. Supplier Approval Fee: The main costs of inspection and testing

  • Due Date: Upon inspection and testing of products.
  • Incurred if you want to acquire any items from an unapproved supplier.

17. Monthly Financial Report Deviation Fee:   A maximum of $20 per hour

  • Due Date: As incurred.
  • Incurred if Smoothie King must correct your financial reports because they do not meet its designated form.

18. Legal Fees and Costs – Franchise and Development Agreement:  Substantial expenses associated with enforcement of agreements

  • Due Date: Upon conclusion of legal proceedings.

19. Design Documents for New and Relocated Units:  Can reach $2,500

  • Paid to Smoothie King.

20. NSF Checks or Draft:  $50 for first occurrence; $75 for each occurrence thereafter

  • Due Date: As incurred.
  • Smoothie King may change this fee on notice, in order to reflect its additional costs.

21. Product and Service Acquires:  This cost may vary

  • Due Date: As incurred.

22. Extra Operational and Marketing Support – Franchise and Development Agreement:  reimbursement of substantial actual expenses

  • Due Date: As incurred.
  • Note that this includes visits to cure operational issues.

23. Technology Fee:  Substantial monthly fee; presently $200 per month

  • Due Date: Note that this fee is paid monthly at the same time you pay the operating fee.
  • Smoothie King may change this fee on notice, in order to reflect its additional costs.
  • For computer software support and other technical services provided by Smoothie King or its designee.

24. Software and Security Fee:  presently, $190 to $265 per month

  • Due Date: This fee is paid monthly at the same time you pay the operating fee.
  • Note that it includes a license for Smoothie King’s Proprietary Software and participation in its data security program. Smoothie King may change this fee on notice, in order to reflect Smoothie King’s additional costs.

25. Relocation Fee:  Can reach up to $500 (site package and plans may be an additional charge)

Due Date:  As incurred.

26. Renewal Fee:  $5,000

  • Due Date: 30 days before renewal.

27. Monthly Package Reporting Late Fee:  $25 to $300

  • Due Date: As incurred.
  • Incurred if you are late in sending in the required monthly paperwork package.

28. Late Income Portion of Paperwork Fee:  $50 or as Smoothie King adjusts from time to time

  • Due Date: As incurred.

29. Resale Assistance Fee:  Greater of $10,000 or 10%, plus any advertising costs

  • Due Date: As incurred.
  • Note that from time to time, Smoothie King may offer this optional program. If the program is chosen, offered, you (as the franchisee) and the prospective acquirer meet Smoothie King’s then – current qualifications, and you agree to follow all specified guidelines, Smoothie King will assist in the sale of the Unit and collect the greater of $10,000 or 10% of the acquire price.

How to Buy a Smoothie King Franchise in the United States

A Smoothie King franchise offers several advantages to new business owners, including a successful business model and national branding as a company that sells healthy products. Additionally, they sell the products and supplies to franchisees without any mark-up. This helps you to increase profits. If you are interested in investing, below are steps to follow:

  • Analyze and confirm that you meet the financial requirements to obtain a franchise. The company does not require previous small business experience as they provide extensive training to new franchisees. However, you do not have to actively manage your franchise, although you do have to complete the training program.
  • Fill and submit the franchise application that you will find on the corporate website.
  • Interview at the corporate office located outside of New Orleans. The company will offer the mandatory disclosure document, confidentiality documents and paperwork for requesting a franchise.
  • Take your time to complete the paperwork given to you at the interview and attend a second interview, if requested.
  • Carefully review and sign the franchise agreement Smoothie King sends to you upon approval. Wait seven days and then return it to the company along with your $25,000 franchise fee.
  • At this point, attend orientation at Smoothie King Headquarters in Covington, Louisiana. The one – day orientation introduces you to their corporate culture while explaining the process that leads up to opening your own franchise.
  • Fix an appointment with the real estate development team to select a site for your new franchise. The company suggests high traffic areas, such as urban business districts. Your start – up costs can vary widely, dependent on the location, amount of construction necessary and size of the store.
  • Carefully complete the management program for new franchisees at the company’s training complex in Metairie, Louisiana. The course lasts 12 days and educates you about their products and how the franchise system functions.
  • Then employ the staff and arrange for the next segment of training. Smoothie King provides seven days of training in your store before opening day. They cover the business topics related to operational and marketing practices, such as conducting nutritional classes for guests. You get hands – on practice running the smoothie bar and the sales area.
  • Then open your new franchise and take advantage of Smoothie King’s continuous training and support program. The knowledge and support they provide will help you to earn a profit.

Conclusion

Blend your enjoyment of delicious smoothies with your business savvy and consider buying a Smoothie King franchise. The company has been in business since 1973, starting as a vitamin shop, and currently ranks as one of the top franchises in the country.

When franchisees invest in Smoothie King, they’re not only investing in themselves and the business, they’re helping each guest invest in their well – being. Anyone can toss fruit, vegetables, yogurt and dairy into a blender. But the Smoothie brand creates specialized smoothies expertly blended for guests’ specific needs, purpose and goals – which has been the companies purpose from the very start.

Joy Nwokoro