25 Substantial Fees Every Smoothie King Franchisee Needs to Know

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Updated February 22, 2021.

If you are considering a Smoothie King franchise, don’t get blindsided by these 25 important franchise fees (from the initial franchise fee, to the royalty fee, to 23 other fees found in Items 5 and 6 of Smoothie King’s 2020 FDD).

All fees are payable to Smoothie King and apply to the Franchise Agreement. The fees are non-refundable. Occasionally, Smoothie King waives or reduces certain one-time fees. Otherwise, the fees are uniformly imposed unless otherwise noted.

During the term of the Franchise Agreement, Smoothie King may offer optional services not currently contemplated for which Smoothie King may charge a fee.

All fees apply to both Traditional and Non-Traditional locations unless otherwise noted.

1. Initial Franchise Fee – Traditional Location: $25,000 to $30,000

You will pay a $30,000 lump sum initial franchise fee when you sign the Franchise Agreement.

If you are an existing franchisee in good standing and meet Smoothie King’s qualifications, Smoothie King may approve you to develop an additional Unit.

If you are an existing franchisee in good standing and meet Smoothie King’s qualifications, Smoothie King will offer you a reduced initial franchise fee equal to $25,000.

Smoothie King is a member of the International Franchise Association’s VetFran program. If you are an active member of the United States Armed Forces or if you have been honorably discharged from the United States Armed Forces, you will be eligible for a discount of 20% off the initial franchise fee.

2. Initial Franchise Fee – Non-Traditional Location: $15,000

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You will pay a lump sum initial franchise fee of $15,000 when you sign the Franchise Agreement for a Non-Traditional location. The initial franchise fee is not refundable under any circumstances.

3. Area Development Fee: $12,500 for each Unit that you are authorized to develop after the first franchise

You will pay a lump sum development fee when you sign an Area Development Agreement.

The development fee is calculated at the rate of $12,500 for each Unit that you are authorized to develop after the first franchise. For example, if you enter into an Area Development Agreement to establish your first Unit and an additional four Units, your development fee will be $50,000.

Development fees will be applied to the franchise fees for each Unit opened under your Area Development Agreement.

The development fee is not refundable under any circumstances.

In addition to the development fee, you must sign a Franchise Agreement and pay the initial franchise fee for your first Unit at the same time you sign the Area Development Agreement unless you are a current Smoothie King franchisee.

If you are a current Smoothie King franchisee, you must sign a Franchise Agreement and pay the initial franchise fee at least 6 months before your Unit is scheduled to open or before you sign the lease for the Unit, whichever occurs first.

Under the Area Development Agreement, the initial franchise fee for the first Unit is $30,000 for new franchisees and $25,000 for existing franchisees in good standing. The initial franchise fee for the second Unit and each subsequent Unit is $25,000.

Each initial franchise fee under the Area Development Agreement is for a Traditional location; the right to develop Units under an Area Development Agreement does not include Non-Traditional locations unless specifically agreed upon in writing by Smoothie King.

4. Other Initial Fees Before the Smoothie King Business Opens

In addition to the initial franchise fee and, if applicable, the deposit described above, you must pay Smoothie King up to $2,500 for design fees for your Unit premises.

These fees are not refundable under any circumstances.

You also must purchase the hardware for the Smoothie King POS System from Smoothie King. The hardware costs are currently $2,250 to $4,490. These costs are not refundable under any circumstances.

If you fail to open your Unit for business within 18 months from the date you sign the Franchise Agreement, you may extend the date by which you need to open the Unit by up to 6 additional months, if you pay Smoothie King a monthly extension fee of $1,000 at the beginning of each such month. For each month in which you pay a monthly extension fee, you do not have to pay a minimum Operation Fee.

5. Operating Fee: 6% of Gross Sales, subject to a monthly minimum fee of $500

Due Date: Accounting paperwork due within 2 business days after the end of each month; payment due by the 16th of each month for the prior month’s fees.

Gross Sales is defined as all products and services sold in or from the Unit. This includes concessions off premises, catering, and delivery. Gross Sales do not include any excise or sales tax. In the past, Smoothie King has reduced or waived the royalty fee for certain locations.

In addition, Smoothie King reserves the right to include in Gross Sales all ancillary charges or fees, including delivery service fees, that a customer pays to Smoothie King or any third party in connection with the purchase of any products or services sold in connection with the Unit.

Upon the earlier of (i) you opening and operating the Unit and (ii) the beginning of the 16th full calendar month after the effective date of your Franchise Agreement, you will pay Smoothie King an Operating Fee equal to the greater of $500 each calendar month or 6% of Gross Sales.

6. National Marketing Fee: currently 3% of Gross Sales; Smoothie King has the right to increase the Fee to 5% of Gross Sales upon 60 days’ notice

Due Date: Same as Operating Fee.

You must pay Smoothie King the National Marketing Fee, beginning on the date you open for business.

The National Marketing Fee is currently 3% of monthly Gross Sales. Smoothie King may increase the National Marketing Fee up to 5% of monthly Gross Sales with 60 days’ notice.

7. Regional Marketing Fee: if established in a region where the Unit is located, Smoothie King will determine the amount of the Fee, not to exceed 2% of Gross Sales

Due Date: Same as Operating Fee.

Any contribution to the Regional Marketing Fund will be credited to your local marketing requirement.

8. Local Marketing Requirements: minimum of 2% of Gross Sales

Due Date: As incurred.

Any contribution to a Regional Marketing Fund will be credited towards your local marketing requirement.

Except for Non-Traditional locations, Smoothie King may require you to pay all or any part of the local advertising and marketing fee to a Regional Marketing Fund if one is established in your area.

9. Grand Opening Advertising: New Unit: minimum of $15,000 for all locations; Relocated Unit: minimum of $10,000 for all locations

Due Date: Paid to approved suppliers when expenses are incurred during the 4-week period before and within 3 months after the opening of your Unit.

Paid to approved suppliers.

You must submit to Smoothie King a single report of all expenditures within 90 days of opening. If you fail to spend $15,000 for new Units or $10,000 for relocated Units, Smoothie King will collect the shortfall and deposit it into the National or Regional Marketing Fund.

10. Interest on Late Payments: 18% per annum or maximum rate allowed by law, if less than 18%; plus, $50 late fee payment

Due Date: After the date payments are overdue.

11. Training Fees – Franchise Agreement and Area Development Agreement: no charge for initial training programs for the first 2 trainees. Reasonable fee may be charged for additional trainees to attend.

Due Date: As incurred. Currently not charged.

After the initial training program, Smoothie King may require you to pay Smoothie King a reasonable fee for other personnel to attend the same, or other, training programs.

You must pay all personal expenses you and/or your employees incur to attend training programs, including costs and expenses of transportation, lodging, meals, wages, and employee benefits.

Smoothie King reserves the right to charge reasonable fees for materials and participation in any training courses or seminars, but Smoothie King will not charge for the attendance by up to two persons representing you at the initial franchise management training program.

12. Remodel Costs: 5 years: up to $15,000 for materials

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Due Date: After 5 years from date the Franchised Business opens for operation.

These amounts are for materials only and are payable to third-party suppliers. Labor costs will vary based on where your Units are located.

13. Audit Fees: audit discrepancies and reasonable actual costs of conducting audit

Due Date: After audit and audit costs if gross sales are understated by 2% or more.

14. Transfer Fees – Franchise Agreement: $7,500 to $12,500; Transfer Fees – Area Development Agreement: 10% to 20% of the then-current initial franchise fee

Due Date: Prior to closing.

Transfer Fees may be reduced under certain circumstances (e.g., Smoothie King will consider a reduced fee for transfers to immediate family members).

The amount of the transfer fee depends upon whether you are transferring your interest to a current Smoothie King Business manager, franchisee, or developer and whether the transfer will require a new location for the Business.

15. Securities Offering Fee – Franchise Agreement and Area Development Agreement: not to exceed $25,000

Due Date: Upon your review of Securities Offering.

16. Supplier Approval Fee: actual costs of inspection and testing

Due Date: Upon inspection and testing of products.

Incurred if you desire to purchase any items from an unapproved supplier.

17. Legal Fees and Costs – Franchise Agreement and Area Development Agreement: reasonable expenses associated with enforcement of agreements

Due Date: Upon conclusion of legal proceedings.

18. Design Documents for New and Relocated Units: up to $2,500 (non-refundable)

Due Date: As incurred.

19. NSF Checks or Draft: $50 for first occurrence; $75 for each occurrence thereafter

Due Date: As incurred.

Smoothie King may change this fee on notice, in order to reflect its additional costs.

20. Product and Service Purchases: varies

Due Date: As incurred.

21. Extra Operational and Marketing Support – Franchise Agreement and Area Development Agreement: reimbursement of reasonable actual expenses

Due Date: As incurred.

Includes visits to cure operational issues.

22. Technology Fee: reasonable monthly fee; currently $200 per month

Due Date: This fee is paid monthly at the same time you pay the operating fee.

Smoothie King may change this fee on notice, in order to reflect its additional costs.

For computer software support and other technical services provided by Smoothie King or its designee.

23. Software and Security Fee: currently, $215 to $305 per month

Due Date: This fee is paid monthly at the same time you pay the operating fee.

This fee includes a license for Smoothie King’s Proprietary Software and participation in its data security program. Smoothie King may change this fee on notice, in order to reflect Smoothie King’s additional costs.

24. Relocation Fee: up to $500 (site package and plans may be an additional charge)