Tropical Smoothie Café franchise

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Tropical Smoothie Café is the second largest smoothie chain in the US and they claim to think big, priding themselves on innovations that give franchise owners more bang for the buck with everything they sell.

Tropical Smoothie Café business details

What began as a single juice bar on the beach in Destin, Florida has now become a national brand with more than 1400 locations across the country. Tropical Smoothie Café sells premium smoothies as well as sandwiches, flatbreads, wraps, and salads. They are headquartered in Atlanta, Georgie and have offered franchise opportunities since 1998.

Tropical Smoothie Café at a glance:

  • US stores: Approximately 1400
  • Required Investor net worth: $350,000
  • Required investor liquid cash: $125,000
  • Min. investment: $300,000
  • Max. investment: $720,000
  • Standard franchise term: 15 years

Can I start a Tropical Smoothie Café franchise?

You can if you have a minimum net worth of $350k and at least $125k in liquid cash. Tropical Smoothie Café say their ideal franchisee should understand their culture and business model and have previous experience in running a business (not necessarily in hospitality). They also say that franchise owners are not required to participate in the daily operations of the store. You can hire a manager to do that work for you. This means this opportunity may be suitable for passive investment.

How much does a Tropical Smoothie Café franchise cost?

Set-up costs for a Tropical Smoothie Café store start at a more affordable $300,000 but can reach as high as $720,000 depending on the size and type of store you choose – a cost range that ranks as low to moderate.

The company offers two types of franchise:

  • Endcap or inline location – small locations that provide carry-out and (with prior approval) delivery services only – similar to the food/drink stores found in the food at your local mall.
  • Free-standing/drive-thru location – larger, purpose-built premises that often have dedicated parking facilities and provide dine-in service as well as carry-out and delivery.

The initial franchise fee ranges from $15,000 to $30,000. Military veterans may be eligible for a 50% discount off this cost.

After opening, you are required to pay an array of ongoing fees and charges. They include:

  • Royalty fee: 6% of gross sales
  • National marketing fee: 3% to 4% of gross sales
  • Local advertising fund: Minimum 2% gross sales
  • Back of house fee: One time $145, then $179 per month
  • Online ordering: $30 per month
  • Managed firewall fee: $103 per month
  • Interest charge: 18% per annum or highest rate applicable by law
  • Late fee: $25 per week
  • Management fee: 10% of gross sales for period franchisor operates the franchise
  • Supplier approval: $500 to $2,000
  • Remodel marketing: $3,750
  • P/L data software subscription: $14.95 per month
  • TSC mobile app: $75 per month

Estimated key costs to open a Tropical Smoothie Café franchise:

Key Costs GuideLowHigh
Franchise fee$15,000$30,000
Professional fees$5,000$26,000
Furniture, fixtures and equipment$105,500$166,500
Leasehold improvements$150,000$288,500
Signage$5,000$22,000
Initial inventory$3,000$18,500
Training expenses$1,000$18,500
Initial deposits$1,000$22,500
Grand opening contribution$5,000$10,000
Additional costs – first 3 months $6,000$59,000

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Are Tropical Smoothie Café franchises profitable?

Yes. According to Tropical Smoothie Café’s figures, the top 50% of their franchise outlets generate average gross revenues of $1,248,000 per year. High competition tends to keep profit margins slim in traditional fast food businesses, but healthy offerings typically sell at a premium and margins of 20% or even 30% may be possible. Using Tropical Smoothie Café’s turnover figures and allowing for a 20% margin, franchise owners could achieve net profits of $249,600 per year. This ranks as excellent, and it would pay the average TSC franchise investment of $500k back in less than 24 months.

What is the failure rate for a Tropical Smoothie Café franchise?

The failure rate for a Tropical Smoothie Café is 1% in year one, rising to 3% by year three. This ranks as very low.

What are the franchise territory policies for Tropical Smoothie Café?

Franchisees receive a ‘protected area’ consisting of a geographical area within a one-half mile radius around the site of their Tropical Smoothie Cafe restaurant. As long as franchisees are in substantial compliance with their franchise agreement, the franchisor will not operate or grant to others the right to operate a Tropical Smoothie Cafe restaurant from a location within the protected area. Franchisees cannot offer delivery service without prior approval.

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What franchise resources does Tropical Smoothie Café offer?

Tropical Smoothie Café support for franchisees includes:

  • Training: For their first Tropical Smoothie Café, the initial training is mandatory for franchisees and their approved manager and must be successfully completed within 15 days before opening the franchised business. Initial training consists of approximately one week of classroom training, followed by three to four weeks of in-cafe training (three weeks for cafes without a drive-thru and four weeks for cafes with a drive-thru). The company reserves the right to add an additional two weeks of training as required. The franchisor may also provide ongoing continuing education and training programs, meetings, or seminars that franchisees must attend.
  • Marketing support: Tropical Smoothie Café provides promotional and other marketing support for their franchisees.
  • Third-party financing: Tropical Smoothie Café provides no financial support for investors seeking franchise funding. However, you may be able to obtain economical and flexible funding solutions from the many independent funders who provide business loans to franchise operators.

Why should you start a Tropical Smoothie Café franchise?

Firstly, America’s love for all things smoothie is growing at an exponential rate – with the US smoothie market projected to rise from $4.04 billion in 2023 to $9.86 billion in 2033. That’s a compound growth rate of 9.4% year after year. Secondly, Tropical Smoothie Café has also been growing fast – adding new locations at a clip – up 45.7% over the past three years. Thirdly, the business delivers stellar profits and carries a miniscule failure rate. In short, what’s not to like? If you’re looking for a business that appears to deliver in all areas, this opportunity might be the one for you.

What is the process for starting a Tropical Smoothie Café franchise?

It begins with an application. Start the process here.

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Testimonials

Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.

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Swoop requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

Franchise funding: https://swoopfunding.com/us/blog/funding-your-franchise-a-guide-for-franchisees/

Profitability: https://www.tropicalsmoothiefranchise.com/why-us/

Tropical Smoothie Cafe franchise application: https://www.tropicalsmoothiefranchise.com/why-us/#get-started

Tropical Smoothie Cafe: https://www.tropicalsmoothiefranchise.com/why-us/

Failure rate: https://www.vettedbiz.com/franchises/tropical-smoothie-cafe/

Set-up costs: https://www.franchisedirect.com/tropical-smoothie-cafe-franchise-costs-fees

Think big: https://www.tropicalsmoothiefranchise.com/why-us/

Second largest in USA: https://www.franchisechatter.com/2023/12/10/the-top-smoothie-and-juice-franchises-of-2024/

Growth in the sector; https://www.precedenceresearch.com/smoothies-market

TSC growth past 3 years: https://www.entrepreneur.com/franchises/directory/tropical-smoothie-cafe/308831

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