FDD Talk 2018: Nékter Juice Bar Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the Nékter Juice Bar franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Nékter Juice Bar franchise, based on Item 7 of the company’s 2018 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Nékter Juice Bar franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned Nékter Juice Bar outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD

• Section V – Presentation and analysis of Nékter Juice Bar’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• 2017 average and median gross sales, cost of goods sold, labor costs, occupancy costs, and EBITDA for the 17 Nékter Juice Bar Stores owned and operated by franchisees during the full 2017 calendar year and submitted the needed financial information

Section I – Background Information

24 Things You Need to Know About the Nékter Juice Bar Franchise

Accelerates National Expansion

1.  At the end of May 2018, Nékter Juice Bar announced that it was continuing its strong national growth this summer as new franchise partners prepare to bring the healthy lifestyle concept to several new markets, including Jacksonville Beach, Coconut Creek, Tampa, and Valrico in Florida; Knoxville, Tennessee; Eugene, Oregon; and Woodbury, Minnesota.

2.  At the same time, Nékter has 150 more restaurants in development in multiple markets, including Illinois, Georgia, Kansas, Louisiana, and Pennsylvania, and is seeking franchise partners who want to bring a thriving and growing brand to more communities across the United States.

3.  Steve Schulze, co-founder and CEO of Nékter Juice Bar, said, “Today Nékter Juice Bar continues to be the category leader and trailblazer by offering a dining experience that offers benefits beyond the menu to improve lives. As we grow across the country, it’s becoming increasingly evident that consumers are rejecting rhetoric and disingenuous hyperbole and are now demanding authenticity and ingredient integrity, which is what they have always found at Nékter.”

4.  In the same press release, Nékter said that recent strategic brand and operational enhancements have also contributed to rising guest loyalty and bottom-line improvements, including:

• A new “Farm-to-Cup” initiative supported by a strengthened national supply chain network to ensure ingredient quality, freshness, and safety while lowering overall food and distribution costs.
• A flexible restaurant design program for traditional and non-traditional settings with value-engineered models for new markets and multi-unit operators.
• An upgraded mobile app that has led to a greater than 200 percent increase in online ordering sales.

5.  To help support sustained growth, Nékter Juice Bar also added two proven industry professionals to its team: Philip Notaro as director of construction, and Kenny Burdi as director of real estate. A 20+-year industry veteran, Notaro has served in leadership positions at several restaurant brands, including Pressed Juicery, Robeks, Togo’s Eateries, and at Warner Bros. Studio and Sony Picture Studios Imageworks. Notaro will focus his efforts at Nékter Juice Bar on value-engineering and streamlining the design process, build-outs, and improvements.

6.  Burdi arrives at Nékter from Jimmy John’s Gourmet Sandwiches, where he most recently served as regional real estate manager. At Nékter, Burdi will lead the real estate program, including market development and analysis, site selection, and lease negotiations. Both will work closely with Nékter’s executive team, including Schulze; Natalie LaClair, vice president of business operations; and Chris Turpin, vice president of franchise relations, to grow and solidify the brand’s leadership position within the juice bar category.

Leads Farm-to-Cup Movement With Innovative National Procurement and Distribution Program

7.  Around the start of May 2018, Nékter Juice Bar announced that it had partnered with Produce Alliance to ensure the procurement and delivery of the freshest and most local produce to each of its locations around the country. Through a network of more than 50 specialty distributors of fresh produce, the partnership will bolster Nékter’s procurement, national distribution, and food safety assurance programs as the juice bar concept quadruples its footprint over the next few years.

8.  Steve Schulze, co-founder and CEO of Nékter Juice Bar, said, “Restaurant brands that deliver transparency, ingredient quality and authenticity like Nékter Juice Bar will win the hearts and loyalty of the American consumer. Nékter continues to be a trailblazer in the fresh and clean juice bar movement, and as we grow, our partnership with Produce Alliance allows us to maintain our high standards and provide our guests with the freshest ingredients from growers across the country. Essentially, fresh will always be in season at Nékter Juice Bar no matter what the part of the country you live in.”

9.  The partnership will provide an uninterrupted supply chain to improve sourcing and distribution efficiencies and is inclusive of Nékter’s growing Grab N’ Go options, including its cold-pressed bottles and healthy snacks. While the vast majority of the brand’s research and development is done in-house, Produce Alliance will also contribute expertise stemming from decades of culinary innovation and expertise.

10.  According to Schulze, Nékter and Produce Alliance share common goals and core values around ingredient integrity and transparency. Schulze added, “As we grow, we will not compromise our standards, and will always seek innovative solutions and like minded partners that will continue to set the industry standard.”

New Summer Specials and First Vegan Ice Cream

11.  At the start of summer in early June 2018, Nékter Juice Bar added several new items to its menu including fiber-rich Fusion Blends, a new protein-packed Protein Power Bowl, new functional toppings and boosts, the brand’s first vegan ice cream, and two limited-time summer specials.

12.  Steve Schulze, co-founder and CEO of Nékter Juice Bar, said, “At Nékter, we are always striving to offer the very best that nature has to offer. We’ve powered up our menu with new flavors and functional ingredients to help keep our guests energized and feeling great during the busy summer season. Our team spent quite a bit of time researching the best ingredients for the best flavor and nutritional impact, and the results are fantastic!”

13.  The two new limited-time offerings feature pineapple, which is now available as a flavor option across Nékter’s entire menu. The Pineapple Mint Refresh Juice is a blend of sweet pineapple, green apple, Fuji apple, lime, and a touch of fresh mint. The new Skinny Colada features a combination of coconut water and sweet pineapple, blended with Nékter’s creamy house-made cashew milk and a dash of agave nectar. Both drinks were available at each of Nékter’s 110+ locations across the country until July 4.

14.  In addition to the limited-time drinks, Nékter added three Fusion Blends, an entirely new menu category that fuses a juice with a smoothie by blending entire fruits and vegetables for a higher-fiber and nutrient-dense beverage and ideal meal replacement.

15.  The Banana Boost Fusion Blend is ideal for beginners — made with banana, spinach, kale, apple, lemon, chia seeds, and coconut water. The Slender Greens Fusion Blend is packed with tropical flavors, including spinach, kale, cucumber, pineapple, mango, chia seeds, and coconut water blended with ice. The Tropical Cooler Fusion Blend, which combines maximum nutrients and minimal calories, is a lush puree of spinach, kale, pineapple, banana, coconut butter, and coconut water.

16.  Nékter also introduced its first vegan Skoop ice cream flavor, Coconut Vanilla. The vegan ice cream is a creamy blend of coconut milk, Madagascar vanilla, agave nectar, and a pinch of sea salt – a healthy frozen indulgence without dairy, gluten, or refined sugars at only 160 calories per serving.

17.  To round out the new menu items, Nékter expanded its bowl options with a new Protein Power Bowl, which boasts 45 grams of protein. The bowl starts with a blended base of strawberry, banana, cacao, coconut butter, vanilla hydrolyzed whey protein, and house-made cashew milk, and is topped with peanut butter protein granola, fresh strawberry, blueberry, banana, chia seeds, hemp hearts, a scoop of peanut butter, and agave nectar.

18.  Nékter further powers up its bowl category with several new fresh and flavorful Boosts and Toppings, including pineapple, green apples, vanilla hydrolyzed whey protein, and peanut butter protein granola.

Company History

19.  Nékter Juice Bar was founded in 2010 by Alexis and Steve Schulze in Costa Mesa, California. Alexis was inspired to open her own juice bar after being turned off by the taste of traditional fresh pressed juices at a local health food store.

20.  She said, “There wasn’t a welcoming way to ease newbies into juicing there. The taste of straight greens wasn’t the best introduction to the concept of fresh pressed juices. It’s an acquired taste at that level. I wanted to find a way to ease into that green juice and develop my palate. It’s really as simple as adding an apple to sweeten it up a bit. I realized that this type of juice could be the gateway!”

21.  Alexis began experimenting and making her own juice blends at home. Her friends and family loved what she came up with and ended up providing the initial investment for Alexis and her husband Steve to open the first Nékter Juice Bar.

22.  The Nékter Juice Bar concept was popular from the beginning and within a few years, the Schulzes had opened several locations in the Southern California region. As interest in the brand increased, the Schulzes brought in a franchise expert and decided to start franchising the Nékter Juice Bar concept in 2012.

23.  Since then, Nékter Juice Bar has grown beyond Southern California and there are now locations in Nevada, Arizona, Texas, Utah, Colorado, Washington state, and North Carolina. Nékter Juice Bar plans to expand nationally to 425 stores by 2020.

Entrepreneur’s Franchise 500

24.  Nékter Juice Bar ranked No. 384 on Entrepreneur’s 2018 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Nékter Juice Bar franchise costs, based on Item 7 of the company’s 2018 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Nékter Juice Bar’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2015

• Outlets at the Start of the Year:  10
• Outlets at the End of the Year:  14
• Net Change:  +4

2016

• Outlets at the Start of the Year:  14
• Outlets at the End of the Year:  18
• Net Change:  +4

2017

• Outlets at the Start of the Year:  21
• Outlets at the End of the Year:  51
• Net Change:  +30

Company-Owned

2015

• Outlets at the Start of the Year:  36
• Outlets at the End of the Year:  38
• Net Change:  +2

2016

• Outlets at the Start of the Year:  38
• Outlets at the End of the Year:  43
• Net Change:  +5

2017

• Outlets at the Start of the Year:  43
• Outlets at the End of the Year:  49
• Net Change:  +6

Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis

Average Gross Sales, Cost of Goods Sold, Occupancy Costs, and EBITDA for Franchised Locations

• There were a total of 21 Nékter Juice Bar Stores owned and operated by franchisees during the full 2017 calendar year. Of these 21, only 17 franchisees submitted the financial information needed for the chart below. Those 17 franchised locations are the ones included in the averages in the chart below.

• The four Stores whose financial information are missing are located in California and Arizona.

• The following table shows past performance actual average Gross Sales, Cost of Goods, Labor Costs, Occupancy Costs, and EBITDA information for the 17 franchised Stores described above.

• The 17 Stores in the below averages are located in California, Nevada, and Texas.

Franchised Store Averages and Medians (2017)