Tropical Smoothie Franchise Cost Exposed

Tropical Smoothie Franchise offers customers a variety of premium, handcrafted smoothies made with select fruit and vegetables blended fresh in the cafe using proprietary recipes, as well as specialty sandwiches, flatbreads, wraps, and bowls.
A Tropical Smoothie Cafe is a better-for-you, fast-casual restaurant business offering freshly prepared food and smoothies served in a fun, friendly environment. There are currently 913 franchised locations and 1 company-owned restaurant.
Tropical Smoothie Cafe is a Georgia LLC organized on June 25, 2012. Charles Watson has been the CEO since December 2018. Tropical Smoothie Cafe was recognized as one of the Top 10 Fastest-Growing Chains as well as Entrepreneur’s Best Franchises for Any Budget. We will examine if the initial Tropical Smoothie Franchise Cost is worth the potential return.
You can learn more here: www.vettedbiz.com/tropical-sm...
00:00 Introduction
00:17 Tropical Smoothie Cafe Franchise
00:36 Initial Franchise Fee
00:50 Initial Costs
01:10 Average Sales and Profits
01:41 Recoupment of initial investment
02:40 Finantials
03:58 Competition
04:29 Conclusion
#TropicalSmoothieCafe #VettedBiz #FranchiseReview
The Tropical Smoothie franchise fee is $30,000. This is the upfront fee that must be paid when opening a Tropical Smoothie Cafe franchise. You will also pay a grand opening marketing contribution of $10,000.
If you qualify to develop and operate multiple Tropical Smoothie Cafe’s, then you will pay $20,000 for each additional unit you decide to open.
The estimated total investment necessary to begin the operation of a Tropical Smoothie cafe ranges from $257,500 - $560,500.
The following costs are part of the upfront costs included in the initial investment. Many of these are one-time fees that are needed to launch the franchise.
Royalty Fee: 6% of Gross Sales
Local Advertising Cooperative Contribution: 2% of Gross Sales.
The table below represents 555 franchise locations that were in traditional units and have been in operation for at least 350 days in 2020.
The highest-earning franchise made over $2.5 million in revenue while the lowest-earning franchise made $244,000. These figures indicate that there is a widespread of the potential earnings you can make and it depends on how well the business is run, the location, and the amount of time in operation. It is estimated that based on average net revenue of $840,000 and a profit margin of 15%, the average tropical smoothie franchise owner salary/ compensation is $126,000 per year.
From the moment you allocate your capital to invest in a food franchise, it can take up to a year to open the location and pass the breakeven point.
Based on a midpoint investment of $409,000 with estimated profits of $126,000, we expect it to take a little over 4 years to recoup the initial investment in a Tropical Smoothie franchise.
Overall, Tropical Smoothie Cafe is a profitable business, with a net income of $7.6 million in 2020. Total revenues were $58 million while expenses were only $41 million indicating a healthy profit margin of around 30%. One of the biggest expenses seen in the income statement is $12 million spent in national advertising indicating the franchisor’s commitment to expanding and growing their brand which in turn will help franchisees see success.
In 2020, Tropical Cafe Smoothie had a net income of $7.6 million, and their cash, cash equivalents, and restricted cash was $31.3 million at the end of 2020 an almost 100% increase from the cash they started with at the beginning of the year. This extra cash flow is mainly from proceeds from a revolving line of credit which accounted for $65 million.
On average there have been 100 openings per year for the last three years. The strong consistent growth indicates the success that Tropical Smoothie Cafes have been experiencing. It would be important to find out how many franchisees have multiple cafe locations.
Tropical Smoothie Cafe has been seeing rapid franchise location growth with almost 100 new restaurants a year opened in the last three years.
Tropical Smoothie Cafe is in a new emerging market of healthy food options. However, this market is starting to grow in popularity with other companies such as Juice it Up, Jamba Juice, and Smoothie King capitalizing on the new wave of healthy eating and living.
We strongly recommend you speak to at least 5 Tropical Smoothie franchisees to better understand the financials (see questions to ask).
Think Tropical Smoothie is the right franchise for you, or are you interested in other franchise opportunities in the healthy food industry? Check out our listings page on the Vetted Biz website for thousands of franchises available for your investment.
You can learn more here: www.vettedbiz.com/tropical-sm...