Smoothie King is globally No1. Franchise in the Juice Bar industry. This fact is not surprising when we know that this brand has been present on the market since 1973.
The founder of this brand is Steven Kuhnau; he was the first entrepreneur who started using and branding the word ‘smoothie’ thru his business. Although he did not invent this word, he has the most credit for the popularity of smoothies in American culture.
There are currently more than 1,300 Smoothie King franchises presented on the market. The vast majority of the units are located in the U.S., but they are also presented in the international market; this brand is especially popular in Asia.
Smoothies are one of the products that deliver the most profit. Therefore it is not surprising that the Smoothie King is one of the most popular franchise opportunities among the investors.
How Much Does The Smoothie King Franchise Cost
The cost of starting a Smoothie King franchise is in the range between $ 260,000 and $ 850,000. This financial projection includes an initial fee of $ 15,000 to $ 30,000 (this fee is calculated according to the type of franchise and location).
The total investment cost depends primarily on the franchise location; investors from the United States and Canada should expect higher costs than international investors. Also, veterans get a 20% discount on the initial fee; the Smoothie King franchise initial fee cost for veterans will be in the range between $12,000 and $24,000.
The financial requirements that each franchisee must meet are Net Worth of about $ 300,000 and possession of Liquid Assets (non-borrowed funds) of $ 100,000.
Smoothie King has good connections with third-party funding sources, so there is the possibility of assistance in closing the financial construction to start a franchise. This makes this investment a lot easier, and this is one of the more significant advantages of this franchise concept.
All investors who want to reduce the starting Smoothie King franchise cost can buy an already operating unit. The advantage of purchasing a “second-hand” franchise is that the starting cost is reduced to a minimum; in addition, the investor gets a business ready to make a profit immediately after closing the franchise transfer.
Smoothie King franchise cost and financial requirements:
- Estimated total investment: $ 260,000 – $ 850,000
- Net Worth: $ 300,000
- Min. Liquid assets: $ 100,000 – non borrowed funds
Smoothie King Franchise Fee
Smoothie King franchise fees are an Initial fee of $ 15,000 for non-traditional locations, and for other locations, this fee can go up to max. $ 30,000. The ongoing fees that each franchisee must pay every month are 9% of gross revenue (Royalty fee is 6% and Marketing fee is 3%).
Smoothie King is a member of the Vet Fran program, which means that all active members of the U.S Armed Forces and those who are honorably discharged have the right to a 20% discount off the initial fee.
Also, franchisees who are police officers, firefighters, and hospital employees with 10 or more years of experience have the right to a 20% off discount to Smoothie King’s initial fee.
The initial franchise fee is paid after the franchise agreement has been closed.
The ongoing fees must be paid regularly every month regardless of whether the franchise facility is profitable for its owner or not. If these fees are not paid regularly, the franchisor can nullify the franchise agreement.
Other Smoothie King franchise fees are the Technology fee of $ 200 per month and the Design fee of $ 2,500. The design fee is a one-time cost.
Also, we must include the Smoothie King franchise POS System fee in this list, which costs between $ 2,250 and $ 4,490. This is a one-time cost, and after it is paid, the franchise facility will be equipped with the billing system that every facility of this type must have.
Smoothie King franchise one time and ongoing fees:
- Initial fee: $15,000 – $30,000 – one time cost
- Royalty Fee: 6% of Gross revenue – monthly cost
- Marketing fee: 3% of Gross revenue – monthly cost
- Technology Fee: $ 200 per month
- Design fee: $ 2,500 – one time cost
- POS System Hardware fee: $ 2,250 – $ 4,490 – one time cost
Smoothie King Profit
Smoothie King franchises produce EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of 20% of the gross revenue. This indicates that after paying a cost for employees, franchise fee, and other operating expenses, this franchise makes a profit margin of about 13% of the gross revenue.
Most Smoothie King franchises make yearly nets sales of $ 600,000 to $ 850,000, which means that the franchisee can expect a profit of about $ 80,000 to $ 100,000 per year. This indicates that the return of investment for the Smoothie King franchise is five years.
Although five years may seem like an extensive ROI period for a Smoothie King franchise, every investor must understand that every business, including this one, will not become profitable overnight.
This franchise will bring its owner financial stability one year after opening, and good profit can be expected after a few years from the start. So, every investor must be aware that this is not a rich quick scheme.
Smoothies are becoming more popular every day among customers, and that is why it is wise to invest in this franchise. Smoothie King’s profit will grow more in the coming years, and today is the ideal time to get involved in this business.
Suppose the franchisee wants to return the Smoothie King franchise investment as soon as possible and make the best potential profit in the long run. In that case, a franchisee must choose a good location, and the facility must have a drive-thru buy option.
Most customers use drive-thru because of their comfort, and if they are given this opportunity, Smoothie King franchise annual net sales will increase significantly.
Also, before any agreement with the franchisor, read the Smoothie King Franchise Disclosure Document; this document contains all the information about this business opportunity.
Smoothie King History
Smoothie King company is a pioneer of the smoothie industry. Steve and Cindy Kuhnau founded this brand in 1973 in Louisiana, and since 1989 they have been offering the opportunity to start a franchise under the trademarks of this company.
It all began because Steve Kuhnau suffered from various allergies, and in search of a solution to his health issues, he started experimenting with high-protein fruit drinks. Drinks that contained fresh fruits and vitamin supplements reduced his allergies, but they were also tasty, and that inspired him to start the first smoothie bar in the world.
With his Smoothie King franchise, Kuhnau has branded and popularized smoothies, so he is considered a pioneer of this industry.
In 2012, Kuhnau sold the company to South Korean franchisee Wan Kim. This entrepreneur saw the advantages of the Smoothie King franchise, which offers a good profit with a relatively low start-up cost.
Since Wan Kim became CEO of the Smoothie King, from 500 franchise units, they have grown to more than 1,300 franchises. Aside from the United States and Canada territory, this franchising concept is also popular on the international market.
The Smoothie King franchise is different from other similar companies because they put a lot of energy into getting their smoothies as healthy as possible. They have a lot of non-sugar products and use only fresh fruits for their drinks which is why they are very popular in the Fitness community.
From 1973 until today, they are constantly growing as a company, and the smoothie drinks are every day more popular. So, the Smoothie King franchise is an opportunity that will be a good choice for all entrepreneurs who see their business future in this industry.
Summary
When we know how profitable the Smoothie King franchise is, it’s obvious why more than 500 units of this Brand have opened in the U.S. and the international market in the last few years.
The starting franchise has some risks but the Juice business is an industry that is currently worth $ 5 BN in the U.S., and financial predictions say that it will grow even more in the future.
Smoothie King franchises are very popular among fitness lovers and college students, so they have a large and loyal base of customers. This Brand will be an ideal opportunity for all entrepreneurs who want to sell healthy products with a good profit margin.
Although the cost of this franchise is not small, the advantage is that this investment will be profitable in the long run. And because of this profitability, this is an ideal business opportunity for investors who want to enter the Juice & Bar industry.