Smoothie King Franchise Costs: Estimated Initial Investment (Item 7, 2021 FDD)
- The figures below are estimates of the complete investment in establishing a Smoothie King Business and it is possible to significantly exceed these costs in many of the areas listed below.
For End-Cap or In-Line Location
1. Initial Franchise Fee: $25,000 to $30,000 ($15,000 for a Non-Traditional Location)
- Your Initial Franchise Fee is $30,000 for your first Unit.
- If you have 1 Unit open and operating, and you desire to purchase more Units under new Franchise Agreements, you will pay an Initial Franchise Fee of $25,000 for the second and all subsequent Unit you purchase if you are in good standing and meet Smoothie King’s qualifications.
- The Initial Franchise Fee for all Non-Traditional locations is $15,000.
- Smoothie King is a member of the International Franchise Association (“IFA”) and participates in the IFA’s VetFran program, which provides financial incentives to qualified veterans to help them acquire franchised businesses. If you are eligible for the Vet Fran discount, you receive a 20% discount off your Initial Franchise Fee.
- If you are eligible for the first responders discount, you receive a 20% discount off your Initial Franchise Fee.
2. Three Months’ Rental and Deposit: $3,000 to $40,000
- Typical traditional locations for Smoothie King Businesses are shopping centers within suburban shopping areas.
- Typically, you would lease an existing location in a strip center or other commercial shopping center and remodel the location to conform to the current design specifications of a Smoothie King Business.
- For a typical Unit, you likely will lease approximately 800 to 1,600 square feet of building space. Rental rates for this type of Unit may range from $1,000 to $13,000 per month ($12,000 to $160,000 per year), excluding additional charges such as common area maintenance (CAM), insurance, and taxes.
- The average rental for Units opened in calendar year 2019 was $59,625 per year, excluding CAM. The low and high rent were $29,250 and $126,250 annually respectively, excluding CAM.
- For a Unit at a Non-Traditional location, you will typically lease approximately 200 to 600 square feet (although certain locations, such as mall kiosk, food court, or university settings may range from 100 to 500 square feet). Rental rates vary for a Non-Traditional location.
3. Technology Systems: $9,100 to $12,215
- This amount includes the cost of telephone and data setup and installation, internal data lines, technology setup, installation of music system, computer equipment, and Point-of-Sale (POS) system(s) installation and equipment.
4. Grand Opening Marketing (New Unit): minimum of $15,000
- 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 during the 4-week period before and within 3 months after the opening of your Unit, Smoothie King will collect the shortfall and deposit it into the National or applicable Regional Marketing Fund.
5. Travel and Training Expenses: $2,700 to $6,000
- Smoothie King provides instructors and instructional materials, but you must arrange for transportation, lodging, and meals for yourself and for any costs incurred by your employees for in-person training or you must provide the necessary technology for virtual training. Typically, only one person attends training.
- The estimate above assumes that one person attends the one-day orientation and the training program (currently up to 15 days) and includes meals and hotel rates at the franchisor’s recommended hotels.
- The low end assumes that the individual attending training will drive to the site of the training program and will not incur airfare or car rental expenses in attending the training program. The high end reflects the airfare and car rental expenses that the individual will incur in attending the training program.
- The costs do not include wages paid for employees attending training.
- You also are responsible for your employees’ and your costs associated with on-location training before your Unit opens for business.
- The estimates also include $200 to attend a ServSafe course locally.
6. Insurance (First Year’s Premium): $3,500 to $7,500
- You must obtain comprehensive general liability, and provide coverage at a minimum for bodily injury, personal injury, advertising injury, property damage, and products liability including food borne illness injury, cyber/data breach, property insurance, including business interruption insurance and other types of insurance coverage as provided in your Franchise Agreement and lease, and as required by law.
- The estimate given in the chart is for the first year’s premium for all policies currently required.
7. Other Prepaid Expenses: $1,000 to $2,500
- These costs include installation charges and deposits for a business telephone line, utilities, occupational licensing, and health and other permits.
8. Start-Up Supplies, Inventory: $12,000 to $16,000
- This is the estimated amount to cover an initial supply of smoothie ingredients, paper products, cleaning supplies, and retail inventory for your Unit for at least two weeks to one month of business operations, depending upon your sales level.
- Smoothie King franchisees entering new markets will likely incur higher freight costs than franchisees in established markets, and may need additional storage space and higher levels of inventory.
9. Furniture, Fixtures, Equipment, Millwork, and Graphics: $70,600 to $115,500
- This amount includes the costs of all furniture, millwork, equipment, decorative ceiling elements, graphics/artwork, light fixtures, interior menu boards, stainless sinks, shelving, and other miscellaneous items.
10. Architectural and Engineering Professional Services: $3,500 to $14,500
- The referenced amount includes estimated costs of all architectural and engineering services (including those of third parties) needed to localize the design documents into construction drawings as required by local code and governing authorities.
- The referenced amount excludes any civil, structural, or landscaping professional services.
11. Signage: $7,000 to $14,000
- This amount includes the costs of exterior building and monument panel signage.
12. Leasehold Improvements: $100,000 to $215,000
- For an inline or end cap location, this amount includes the costs to alter the existing interior space to the requirements of a Smoothie King Unit.
- The high end of the estimate includes costs for cost a space delivered in shell condition without the floor, walls, electrical or HVAC provided.
- This amount excludes costs for major exterior improvements, materials testing, and zoning or impact fees.
- For a freestanding drive-thru location, the costs include all the costs for constructing the building only. It excludes all site work which Smoothie King estimates will range between $150,000 and $300,000.
- Smoothie King has not included site work in this amount due to the wide variance in costs, and many times a significant portion is included in what the landlord provides to you as a tenant.
13. Legal, Accounting, and Organizational Costs: $500 to $4,000
- Smoothie King requires that you have monthly income statements compiled or reviewed for each store by a licensed certified public accountant (CPA) in order to meet the monthly reporting requirements.
14. Miscellaneous Costs: $1,000 to $5,000
- Smoothie King recommends that you budget an additional amount of cash to cover miscellaneous costs incurred with the opening of the Unit.
15. Drive-Thru: $0 to $33,750
- Many Units may include a drive-thru window. The low end of the estimate assumes that your Unit will not include a drive-thru window. If your location has a drive-thru window, you should plan on incurring these estimated costs.
- Smoothie King has not included costs to modify the building or the site in these additional costs.
16. Additional Funds – 3 Months: $15,000 to $25,000
- This amount reflects the minimum amount of additional funds you will need for the first 3 months you operate a Smoothie King Business. This amount includes salaries and wages, payroll taxes, advertising, product purchases, line of credit, payment of royalties, uniforms, utility bills, ongoing professional fees, freight, and other miscellaneous administrative and operating expenses.
17. Total: $268,900 to $555,965
- Smoothie King relied on its many years of experience in this business to compile these estimates.
- Calculation of this total investment figure does not include the Initial Franchise Fee for a Non-Traditional location.
- Smoothie King does not offer, either directly or indirectly, financing to you for any items.
For Free-Standing Drive-Thru Locations
- The total estimated initial investment necessary to begin operation of a Smoothie King store in a free-standing drive-thru location ranges from $589,300 to $858,900.