What I Like About the Smoothie King Franchise Opportunity

1.  Smoothie King’s product line taps into the growing health consciousness among consumers today.   According to the 2009 Smoothie Statistics Report, US consumers spent over $2 billion on smoothies in 2009 (90% being fresh blended) — a figure that has grown 80% in the previous 5 years.

Smoothie King serves a variety of fresh blended smoothies made of fresh fruit, fruit juices, and nutritional enhancers that satisfy different fitness goals (Stay Healthy, Trim Down, Get Energy, Build Up, Snack Right, Indulge, and Kid’s Kups).  They’ve also added to their menu Fit n’ Crunchy Bowls, which have a smoothie-like base topped with whole rolled oats and grains — perfect for a quick breakfast or snack.

2.  Smoothie King franchisees can also offer retail products like sports beverages, energy bars, healthy snacks, herbs, minerals and sports nutrition products by opening a Smoothie King Lifestyle Center (Think a mini-GNC).  The dual format of a smoothie bar and a small sports nutrition retail store helps maximize revenues in the same retail space, without a huge additional investment on the part of the franchisees.

3.  A smoothie bar is a relatively low capital business.  The cost of equipment and fixtures needed to outfit a typical Smoothie King starts from as low as $49,000, and the build out costs start at $35,000.  The total initial investment to open a Smoothie King can be as low as $142,000, which already includes the $20,000 franchise fee, the first month’s rent and deposit, and 3 months of working capital.

In my opinion, the key to making this business work is finding a compact, high-traffic location with a reasonable rent.  Since smoothies are a relatively low ticket item, you need to sell a lot of them in order to generate sufficient revenues.  But going with an expensive retail space is not recommended either because there is a limit to how many smoothies one can reasonably expect to sell in a day.  This requires a very delicate balancing act — but I believe it is the key to success in this type of business.

Smoothie King franchises are usually located in neighborhood and community strip centers, power centers, shopping malls, universities, airports and downtown business district locations.  The company recommends a location in a densely populated area with significant traffic counts, highly visible and located near numerous traffic generators.  A typical store is between 1,000 to 1,400 square feet in size, but can be smaller or larger (I have a strong preference for a smaller footprint to keep overhead costs low).

What I Don’t Like About the Smoothie King Franchise Opportunity

1.  I don’t think Smoothie King’s brand message stands out enough in the marketplace to prevent a mom-and-pop operation from competing successfully with one of its franchise locations.  There is nothing proprietary about Smoothie King’s business, so a franchisee is really paying to be associated with a well known brand that consumers will choose over the alternative.  I would like to see Smoothie King’s brand be a bit more differentiated.

Having said that, I’m a big believer that an aspiring entrepreneur with no previous experience is better off taking the franchise route.  It makes starting a business so much easier and increases one’s chances for success (but by no means does it guarantee success).

In the case of Smoothie King, the training and support alone could well be worth the price of admission (i.e. the initial franchise fee and ongoing royalty fees).  The new franchisee gets 20 days of training:  one day of orientation, 12 days of management training at the corporate training facility, and seven days of on-site training (four days prior to opening and three days after opening).