Smoothie King Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$312,000

-

$1,379,000

OPERATING PROFIT

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Emily

Updated

February 20, 2024

Is

Smoothie King

a franchise?

Yes,
Smoothie King
is a franchise and
currently
accepts
franchise
applications

Smoothie King, a privately held American smoothie company, is dedicated to offering nutritious smoothies crafted from organic vegetables and whole fruits, without the inclusion of artificial colors, flavors, or preservatives.

Currently headquartered in Dallas,Texas, Smoothies King was established in 1973 by Steve and Cindy Kuhnau, the company later transitioned to ownership by Wan Kim, who was a Smoothie King franchisee in South Korea.

Smoothie King began franchising in 1988 and at present the company maintains a global presence with 1,400 locations spanning the US, Grand Cayman, Korea, and Trinidad.Out of these,1,074 are franchises in the US.

As per the official website of Smoothie King, the company has currently declared that it is not pursuing expansion into international territories.

How many

Smoothie King

franchises

are there?

In 2022, there were
1082
outlets in the United States, of which
1030
are franchises, and
52
are corporate-owned.

What are the

Smoothie King

franchise

fees?

Initial franchise fee

$30,000

Royalty fee

6.0%

Advertising fee

7.0%

Initial Franchise Fee ($30,000 - $15,000)

The initial franchise fee for a Smoothie King franchise is $30,000 for the first unit. However, if you already have one unit open and operating, and wish to purchase more units under new franchise agreements, the initial franchise fee is reduced to $25,000 for the second and all subsequent units, provided you are in good standing and meet the qualifications. For non-traditional locations, the initial franchise fee is set at $15,000.

Royalty Fee (6% of Monthly Gross Sales or $500)

Upon the opening of your unit, and no later than 12 months from the effective date of the franchise agreement, you must pay an Operating Fee equal to the greater of $500 each calendar month or 6% of monthly Gross Sales.

Advertising Contributions

  • National Marketing Fee: Up to 5% of Gross Sales.
  • Regional Marketing Fund Fee: Up to 2% of Gross Sales.
  • Local Marketing Fee: A minimum of 2% of Gross Sales.
  • Grand Opening Amount: $15,000 for new traditional units, $7,500 for non-traditional units.

Other Fees

  • Design Fees: Up to $2,500 for design fees for your unit premises.
  • Training Fees: If more than two people attend the initial training program, a fee of up to $1,500 per person is charged.
  • Transfer Fee: $7,500 (Transfer to Existing Franchisee or Manager) or $12,500 (Transfer to a third party).
  • Relocation Fee: $2,500.

How much does

it cost

to start a

Smoothie King

franchise?

It costs between
$312,000
and
$1,379,000
to start a
Smoothie King
franchise.

Starting a Smoothie King franchise requires a substantial investment, with the total estimated initial investment ranging from $311,601 to $1,379,150.

This investment can vary based on a multitude of factors including the location, size, and the specific type of the franchise unit.

The following table provides a detailed breakdown of the estimated initial investment costs associated with starting a free-standing drive-thruSmoothie King franchise, offering a clear insight into the financial commitment required:

Type of Expenditures Amount
Initial Franchise Fee $25,000 to $30,000 ($15,000 for a Non-Traditional location)
Three Months’ Rental & Deposit $5,000 to $30,000
Technology Systems $12,000 to $14,500
Grand Opening Marketing New Unit: Minimum of $15,000 for Traditional Units and Minimum $7,500 for Non-Traditional Units
Travel and Training Expenses $2,700 to $6,000
Insurance (First Year’s Premium) $3,500 to $7,500
Other Prepaid Expenses $14,700 to $29,400
Start-Up Supplies, Inventory $23,000 to $24,000
Furniture, Fixtures & Equipment, Millwork and Graphics $100,000 to $130,000
Architectural & Engineering Professional Services $42,000 to $52,000
Signage $28,000 to $38,000
Leasehold Improvements $450,000 to $875,000
Legal, Accounting & Organizational Costs $500 to $4,000
Miscellaneous Costs $1,000 to $5,000
Drive-Thru $25,000 to $33,750
Additional Funds—3 Months $15,000 to $25,000
Total $762,400 to $1,379,150

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Smoothie King

provide

training

to its

franchisees?

Yes,
Smoothie King
provides training to its franchisees.

Smoothie King emphasizes a comprehensive training approach to ensure its franchisees are well-prepared to operate their franchises effectively.

Before commencing operations, franchisees, especially those opening their first, second, or third unit, are required to attend and satisfactorily complete the initial franchise management training program.

This program is offered either at a designated site by Smoothie King or, at the company's discretion, virtually.

For those opening their first unit or if the unit is among the first 3 operated by the franchisee or a related entity, all designated managers or other employees actively involved in managing the franchised business must attend and complete this initial training.

Does

Smoothie King

provides

territory

protection?

Franchisees are granted the limited right to operate a Smoothie King Restaurant within a specific geographic area termed the "Territory" as outlined in the Area Development Agreement. Within this Territory, they are obligated to develop Franchised Restaurants. The boundaries of the Protected Territory are defined by identifiable factors such as population criteria, street or walk-by traffic patterns, and natural geographic features. However, this Territory does not guarantee exclusivity.

Furthermore, if franchisees operate from a Non-Traditional location, they will not receive a Protected Territory and will not have any protectable rights to an area or Protected Territory. It's also important to note that franchisees may face competition from other franchisees, outlets Smoothie King owns, or other channels of distribution or competitive brands controlled by Smoothie King.

Can a

Smoothie King

franchise

be run as

a passive

investment?

While a franchisee does not have to conduct on-premises supervision or personally participate in the direct operation of the Unit, it is recommended that they are actively involved in the operation of the Smoothie King franchise as personal participation may enhance the likelihood of operating successfully.

The franchise must at all times be under the direct, full-time, on-location supervision of either the franchisee or a trained and competent employee acting as a full-time manager.

If a franchisee (or their affiliates) operates 4 or more Units, they must also have a district manager that oversees the operation of the Units. If the franchisee is a business entity, Smoothie King does not require that the manager(s) have an ownership interest in the business entity.

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