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The REAL Tropical Smoothie Café Franchise Cost
Nothing beats the heat like a classic tropical smoothie. Perhaps you’re thinking of buying a smoothie cafe but hesitant without knowing the FULL cost breakdown. So, let’s get into the overall Tropical Smoothie Cafe franchise cost and see if buying it makes sense.
Tropical Smoothie Café: The Details
The smoothie business started in 1997 in Atlanta, Georgia. The franchisor is under the name Tropical Smoothie Café LLC with an estimated 900 units. It offers various handcrafted premium smoothies made with select fruits and vegetables blended in the café using its proprietary recipes. Aside from smoothies, the café also sells bowls, flatbreads, specialty sandwiches, and wraps.
Training Program
Franchisees are required to undergo initial training. However, if the franchisee is an entity, then one owner should be designated as the operating principal. The program consists of one week of training. After the classroom training, franchisees then proceed to an actual in-cafe training for three to four weeks.
- Three weeks for a cafe without a drive-thru
- Four weeks for a cafe with a drive-thru
Also, the franchisor has the sole discretion for the following:
- To add two weeks of training as a requirement.
- Make available other relevant continuing education and training programs, meetings, or seminars.
- May host one or more conventions per calendar year and conference telephone calls, included in education and training.
Furthermore, franchisees and their designated managers must attend and complete all ongoing continuing education and training programs. Also, franchisees must attend all conventions, meetings, seminars, and telephone conference calls, as the franchisor may require.
Territory Agreement
The franchisor grants a protected area consisting of a geographical location within a one-half mile radius around the restaurant’s site. However, the franchised Tropical Smoothie Cafe is not a “reserved facility as stated in the FDD. As long as the franchisee remains compliant with the Franchise Agreement, the franchisor will not grant other franchisees the right to operate within the radius. Do take note that franchisees are not allowed to offer delivery services without prior approval.
What’s Expected of the Franchisee?
- Franchisees are not required to participate in the business’ operation. However, the franchisor does advise to participate.
- If franchisees are an entity, they must designate an operating principal among the owners.
- The franchise must be under the direct, on-site supervision of the franchisee or operating principal. If not, a manager selected by the franchisee and approved by the franchisor.
- Franchisees and managers should complete the initial training program.
- Franchisees must offer for sale all foods, menu items, products, beverages, goods, and services that the franchisor requires. Also, franchisees must comply with the franchisor’s specifications and standards.
Financial Support
Neither franchisor nor any of its agents or affiliates offer direct or indirect financing. The franchisor also does not guarantee any note, lease, or obligation. However, the franchisor provides a reduced initial franchise fee for qualified veterans. The rate may go down from $30,000 to $15,000 for the first and each subsequent franchised business.
Did You Know?
Before diving into the breakdown of Tropical Smoothie Cafe Franchise cost, let’s learn more about the brand with these fun facts!
- A group of friends started a tropical Smoothie Cafe on a beach in Florida. They blended fruits and vegetables as a means of replenishment while playing games in the sand. Little did they know that their concoction will cause customers to line up!
- The smoothie business partnered up with Camp Sunshine™ to support destinations that provide children with memorable experiences. In fact, they helped raise $7 million to help create an authentic camp for children with life-threatening illnesses.
- Tropical Smoothie Cafe created a holiday called “National Flip Flop Day” on their tenth anniversary. They give free 16 oz Sunshine Smoothie to customers wearing flip flops from 2 pm to 7 pm every year, on the second Friday in June.
Tropical Smoothie Café Franchise Cost Breakdown
Now, let’s jump into the full breakdown of Tropical Smoothie Cafe franchise cost. Let’s see if buying a franchise of a smoothie cafe business makes sense. Take note that the details below are a compilation from Tropical Smoothie Cafe franchise cost.
| Name of Fee | Low | High |
|---|---|---|
| Franchise Fee | $25,000 | $25,000 |
| Sales Professional Orientation | $100 | $500 |
| Exterior Signs | $1,000 | $20,000 |
| Stationery and Related Supplies | $2,000 | $5,000 |
| Yard Signs | $5,000 | $10,000 |
| Grand Opening Advertising | $5,000 | $5,000 |
| Computer Hardware | $1,000 | $4,000 |
| Approved Broker Management System (computer software) | $3,000 | $5,000 |
| Approved Software Support Expenses | $100 | $1,000 |
| Business Class Telephone Service | $20 | $50 |
| Business Class Internet Access | $50 | $300 |
| Real Property whether purchased or leased | $0 | $6,000 |
| Furniture, Fixtures & Equipment | $0 | $5,000 |
| Business Insurance | In excess of $1,000 in most cases. | |
| Agent Commissions | Prevailing commissions in the franchisee’s geographical area. | |
| Additional Funds – 3 months | $30 | $525 |
| ESTIMATED TOTAL | $43,300 | $88,375 |
Other Costs
| Type of Fee | Amount |
|---|---|
| Continuing Royalty | Declining percentage of gross revenue or, after the first year of operations, the greater of the stated percentage of gross revenue or $15,000. |
| Marketing Fee | Declining percentage of gross revenue, with a monthly minimum of $500. |
| Referral Fee | $750 to $7,500 |
| Additional Location Fee | $2,500 |
| Restricted Purpose Location Fee | $1,000 |
| Sales Convention Registration Fee | Standard registration fee for 1 person: $569 to $600. |
| Examination Fee | All costs incurred by the franchisor in connection with the cancellation, by the franchisee, of an examination of the franchisee’s books and records or a finding of an understatement of gross revenue. |
| Indemnification | Varies. |
| Attorney’s Fees | Varies. |
| Fees Connected with Cure of Defaults | Costs incurred if the franchisor cures a default for the franchisee. |
| Late Fee | 12.5% per annum or the highest rate permitted by law, whichever is lower. |
| Transfer Fee | $5,000 |
| Transfer Fee (with public offering) | $10,000 plus reimbursement of all of the franchisor’s expenses including legal fees. |
| Optional: Orion Commercial Real Estate Subscription Fee | $3,000 per year payable to a third party vendor. |
Final Note
Now that you’ve seen the full Tropical Smoothie Cafe franchise cost, have you decided if it makes sense? One thing for sure, a healthy tropical smoothie is always a treat. For more franchising options, visit Franchise How.