In this FDD Talk 2015 post, you’ll learn the following:
- Section I – Background information on the Planet Smoothie franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Planet Smoothie franchise, based on Item 7 of the company’s 2015 FDD
- Section III – Presentation and analysis of Planet Smoothie’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
- 2014 average gross sales for the highest performing 10%, 25%, 50%, 75%, and all franchised Traditional Planet Smoothie models of Planet Tasti Centers in the United States that were open and operating during the entire period from January 1, 2013 through December 31, 2013 (the “2013 Fiscal Year”) and from January 1, 2014 through December 31, 2014 (the “2014 Fiscal Year”)
- average increase in annual gross sales from 2013 Fiscal Year to 2014 Fiscal Year for the highest performing 10%, 25%, 50%, 75%, and all franchised Traditional Planet Smoothie models of Planet Tasti Centers in the United States that were open and operating during the entire 2013 and 2014 Fiscal Years
Section I – Background Information
Planet Smoothie Moving West
Planet Smoothie, the third-biggest player in the $2.4 billion U.S. smoothie market, is again under new ownership amid plans to continue expansion west of the company’s strong foothold in the East.
The chain was acquired in November 2011 by Tasti D-Lite LLC, which operates Tasti D-Lite stores. Some stores converted to dual operations, offering both Planet Smoothie’s smoothies and smoothie bowls and Tasti D-Lite’s soft-serve dessert.
Kahala Brands, a quick-service restaurant franchisor, purchased the two companies in June 2015 and runs the chains from its corporate headquarters in Scottsdale, Arizona. Kahala owns 14 quick-service restaurant brands providing about 2,600 locations in more than 25 countries. The largest brand in its portfolio is Cold Stone Creamery.
Planet Smoothie, which entered Southern California in 2014, is pairing up with Tasti D-Lite for dozens of planned dual-branded locations in Los Angeles County. Twenty stores are also planned in the next three to four years in North Texas.
Financially, things are looking up in 2015 as Planet Smoothie enjoyed a 15 percent increase in same-store sales in the first quarter compared to the first quarter of 2014.
Growth Began in Southeast
Planet Smoothie was founded by Martin Sprock in 1995 as a single store in Atlanta, Georgia, and quickly expanded through the Southeast. The chain grew to more than 100 locations nationwide, primarily in the East with a number of locations in the West and a handful in the Midwest.
Millennials Drive Success
Planet Smoothie’s customers tend to be young, with more than half of them millennials. The chain said in September 2015 that 26.1 percent of its customers were 18-24 and 25.6 percent were 25-34. Those numbers drop slightly to 19.4 percent for the 35-44 age group and fall to 12.6 percent for ages 45-54 and to 3.6 percent for ages 55 and older.
The young clientele points to a long-term return on investment for franchisees, as these health-conscious 18-to-24-year-olds will be around for many years. In a $9 billion worldwide smoothie market, youth is a major factor.
Social Media, Menu Changes Lure Customers
The chain utilizes social media to connect with people and promote new and limited-time menu items to lure customers to the stores.
The smoothie menu is divided into sections: Planet Classics, Planet Lite, Energy, Protein, Meal Replacement, Superfruit and Kids Smoothies.
The chain has introduced matcha green tea in two flavors, Green With Passion and Gotcha Matcha, which also feature fruit and yogurt. For coffee lovers, there are Java the Nut and Frozen Goat smoothies.
The menu also offers two dozen add-ins, such as fruit, leafy greens, sherbet and honey, and half a dozen supplement boosts providing vitamins, minerals, fiber and others.
Chain Introduces Lite Line
Planet Smoothie in June 2014 added its Planet Lite line of 10 22-ounce smoothies, each with fewer than 300 calories. The flavors are sweetened with the company’s LeanLeaf sweetener, which is made from agave and stevia, and contain ingredients like fruits, fat-free milk, supplements and green yogurt and can be boosted with leafy greens as well as vitamin and protein supplements.
A Smooth Way to Eat Your Veggies
Veggie Love smoothies hit the menu in September 2014 in an effort to provide kids and others with more vegetables. Nutritionists say kids should eat five to seven servings of vegetables each day, but many do not, Planet Smoothie Vice President of Marketing Donna Smith said in a news release.
“Veggie Love smoothies are a solution for Americans who don’t have the time or don’t even like to eat the recommended amount of daily vegetables they need each day to stay healthy,” Smith said.
Veggie Love smoothies feature fruit, greens, carrots and beet root. The top sellers are Just Beat It, 24 Carrot Mango-ld and Lean Green Extreme.
Section II – Estimated Costs
- Please click here for detailed estimates of Planet Smoothie franchise costs, based on Item 7 of the company’s 2015 FDD (updated).