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FDD Talk: How Much Does a Smoothie King Franchise Make (Average Revenues and/or Profits)?

Last updated on April 27, 2022 by Franchise Chatter Leave a Comment
in FDD Talk: Food Franchises, Franchise Earnings, Smoothie Franchise



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

  • Section I – Background information on the Smoothie King franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Smoothie King franchise, based on Item 7 of the company’s 2021 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Smoothie King franchise, based on Items 5 and 6 of the company’s 2021 FDD
  • Section IV – Number of franchised and company-owned Smoothie King outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD
  • Section V – Presentation and analysis of Smoothie King’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:
  • 2020, 2019, and 2018 average, median, high, and low net sales for Smoothie King franchised units that had been open for the 13-month period ending December 28, 2020, December 30, 2019, and December 31, 2018, respectively
  • 2020 v. 2019, 2019 vs. 2018, 2018 vs. 2017, 2017 vs. 2016, 2016 vs. 2015, 2015 vs. 2014, and 2014 vs. 2013 average and median net sales percentage (same-store sales) increase for Smoothie King units based on a comparison of net sales for a comparable period in both years

Section I – Background Information

20 Things You Need to Know About the Smoothie King Franchise

Experiences Record-Breaking Year

America's Most Lucrative Franchises of the Year

1.  In early January 2022, Smoothie King, the world’s largest smoothie brand with more than 1,300 global locations, said that it saw a 16.5% sales increase year-over-year domestically and opened 109 new stores globally, despite the uncertainty that 2021 brought. Smoothie King’s resilience and success in the face of historic economic upheaval continues to set the industry standard for pandemic-proof investment opportunities for entrepreneurs.

2.  For consumers and entrepreneurs alike, the close of the year brings with it goals of personal health and wellness progress as well as professional betterment, both of which serve to bring customers through the door and franchisees to the table for the leading smoothie brand.

3.  These factors played into Smoothie King’s growth in 2021 as they welcomed 38 new franchisees and signed 196 store commitments, many of whom were attracted to the brand’s franchising opportunities by means of its FRANdata FUND score of 855, the best predictor of the future performance of a franchise system that publicly available information can provide. This score is an indicator of the safety and security that outside investors and aspiring business owners can expect with Smoothie King.

4.  The brand saw significant payoff in the measures they began incorporating last year to boost digital sales for the franchise. Namely, with their healthy rewards app, online ordering for pickup and delivery, and the use of tablet devices to ease the in-person ordering experience. All were instrumental in boosting net profits and generating multiple revenue streams for the company, which will play heavily into the increased success of franchisees.

5.  Of the 196 store commitments, 63% came directly from existing franchisees who are looking to grow across the country. This growth proves the brand’s vision to be an integral part of every health and fitness journey resonates with their guests and franchisees alike.


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6.  Smoothie King’s strong and consistent growth underscores the economic momentum that’s fueling the revitalization of American communities. And having comfortably exceeded their goals for brand expansion in 2021, the Smoothie King team is confident in the metrics they’ll be met with in the New Year. With an aim of spreading brand awareness and core messaging from coast to coast stronger than ever before, they plan to attract 70 new franchisees and sign 200 total store commitments in 2022.

7.  In addition, Smoothie King recently ranked No. 13 on Entrepreneur Magazine’s Franchise 500 list. The brand moved up six spots from last year’s ranking, further cementing the Smoothie King name as the industry leader amongst consumers and competitors. Smoothie King was also named one of the Top Franchises for 2022 by Franchise Business Review.

8.  Wan Kim, CEO and chairman of the board of Smoothie King, said, “Despite what is still in many ways an unsteady economy, there’s never been a better time to become a part of the Smoothie King family than now.”

9.  The focus of the franchise now turns to the New Year, where they plan to continue ramping up unit-level economics and system-wide growth through the introduction of new consumer-facing technology, product lines, and tools for franchisee success. All geared towards inspiring guests and team members to live a healthy and active lifestyle, one which, with the help of Smoothie King, will be more convenient and obtainable than ever.

Celebrates 1,000 U.S. Stores with 1,000 Free Smoothies and Charitable Donation

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10.  At the beginning of April 2021, Smoothie King celebrated the milestone achievement of surpassing 1,000 stores nationwide by giving away 1,000 free smoothies and donating a portion of smoothie sales to the Challenged Athletes Foundation, a Smoothie King partner since 2018.

11.  CEO Wan Kim said, “We would not be where we are today without the guests and the communities who continue to support us. That is why we are celebrating this milestone with 1,000 free, clean-ingredient smoothies and a donation to the Challenged Athletes Foundation, an organization that empowers individuals with physical challenges to pursue active lifestyles and Rule the Day.”

12.  Now more than ever, people are looking for ways to support wellness – and Smoothie King, a health and fitness brand at its core, is seeing tremendous growth in sales and locations. In 2020, it opened a record 263 new stores globally, growing to over 1,300 stores worldwide, and closed out the second half of the year with an unprecedented 12.2% increase in comparable sales.

13.  Smoothie King has also continued to innovate in response to consumer trends and needs, introducing two new purpose-driven smoothie lines, Metabolism Boost and Stretch & Flex, since the beginning of 2020.

14.  These trends are anticipated to continue, with Smoothie King – already the world’s largest smoothie brand – on track to open more than 110 new stores domestically by the end of 2021 in markets across the country, including doubling the stores in Chicago and continued growth in Cleveland, Michigan, Northern Virginia, and its first stores in Rio Grande Valley.

15.  To claim one of the free smoothies in celebration of 1,000 U.S. stores, guests had to be one of the first 1,000 people to find a temporary error hidden somewhere on the “Our Story” page of Smoothie King’s website starting on April 6, at 9 a.m. ET. The first 1,000 to select the correct answer received a free 20 oz. smoothie of any kind uploaded to their Healthy Rewards account, limit $6.50 value. Non-members were asked to create a free membership to redeem.

16.  Smoothie King also donated $1 for every smoothie purchased in-store or online on April 6 from 8 to 10 a.m. to the Challenged Athletes Foundation (CAF). CAF provides opportunities and support to people with physical challenges so they can pursue active lifestyles through physical fitness and competitive athletics, increasing self-esteem, encouraging independence, and enhancing quality of life. Smoothie King has an overlapping mission – to inspire all guests to live healthy, active lifestyles and Rule the Day – and is proud to continue supporting CAF through this 1,000 store celebration.

Company History

17.  Smoothie King was founded in 1973 by Steve Kuhnau and his wife Cindy in Kenner, Louisiana. Not long before starting Smoothie King, Kuhnau found out that he was lactose intolerant and set out to find a treat comparable to milkshakes. Kuhnau began experimenting with smoothies, using real fruit, nutrients, proteins, and other supplements. He developed a satisfying and healthy smoothie that tasted good and improved his health. Kuhnau wanted to share his smoothies with others and he came up with the concept for Smoothie King with help from his wife.

18.  The first Smoothie King was a success and Kuhnau spent the next decade refining the business. In 1989, Kuhnau began franchising Smoothie King and the first franchised location opened in New Orleans, Louisiana. Over the next few decades, Smoothie King grew around the United States as well as internationally.

19.  Kuhnau and his family continued to own and operate Smoothie King until 2012 when they sold the company to Wan Kim, who had been a Smoothie King franchisee since 2002. Since the acquisition, Kim has pushed international expansion, primarily in his home country of South Korea. By the end of the 2010s, Smoothie King had grown to 1,000 locations. Today, there are Smoothie King shops in the United States, South Korea, the Cayman Islands, and Trinidad and Tobago.

Entrepreneur’s Franchise 500

20.  Smoothie King ranked No. 13 on Entrepreneur’s 2022 Franchise 500 list.

Section II – Estimated Costs

  • Detailed estimates of Smoothie King franchise costs, based on Item 7 of the company’s 2021 FDD.

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

  • Detailed information on Smoothie King’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

  • Outlets at the Start of the Year:  787
  • Outlets at the End of the Year:  871
  • Net Change:  +84

2019

  • Outlets at the Start of the Year:  871
  • Outlets at the End of the Year:  931
  • Net Change:  +60

2020

  • Outlets at the Start of the Year:  931
  • Outlets at the End of the Year:  968
  • Net Change:  +37

Company-Owned

2018

  • Outlets at the Start of the Year:  28
  • Outlets at the End of the Year:  29
  • Net Change:  +1

2019

  • Outlets at the Start of the Year:  29
  • Outlets at the End of the Year:  38
  • Net Change:  +9

2020

  • Outlets at the Start of the Year:  38
  • Outlets at the End of the Year:  40
  • Net Change:  +2

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

  • Under Part A below, Smoothie King has provided unaudited statements of average annual Unit Net Sales as of December 28, 2020, December 30, 2019, and December 31, 2018.
  • Under Part B below, Smoothie King has provided information on the average annual Net Sales percentage increase for Units comparing the 2020 and 2019 calendar years, the 2019 and 2018 calendar years, the 2018 and 2017 calendar years, the 2017 and 2016 calendar years, the 2016 and 2015 calendar years, the 2015 and 2014 calendar years, and the 2014 and 2013 calendar years.
  • All Units offer substantially the same products and services to the public. New franchisees will receive substantially the same services as those offered to existing franchisees.
  • Smoothie King obtained these historical financial results from the information submitted by its franchisees. Neither Smoothie King nor an independent certified public accountant has independently audited or verified the information.

Part A – Statement of Average Net Sales for 2020, 2019, and 2018

  • The three tables below provide information on average Net Sales of Units during each of the 12-month periods starting December 31, 2019 and ending December 28, 2020; January 1, 2019 and ending December 30, 2019; and January 1, 2018 and ending December 31, 2018.
  • The term “Net Sales” is defined as all products and services sold in or from the Unit, including off premises catering and delivery, but excluding excise or sales taxes, as well as returns, allowances, and discounts.
  • The data below is a representation of average Net Sales for Units broken into nine segments: top 10%, top 25%, top 50%, top 75%, bottom 10%, bottom 25%, bottom 50%, bottom 75%, and total/all.
  • Net Sales information is provided on Units open for the consecutive 13-month period ending on December 28, 2020, December 30, 2019, and December 31, 2018, including those Units closed for a period of less than 8 weeks for remodeling purposes.
  • Units presented exclude those Units not scheduled to be open daily throughout the period (excluding holidays), such as Units within office buildings that close for the weekend and Units on college campuses that close for the summer period.

Table A-1 – Average Net Sales of USA Units (December 31, 2019 to December 28, 2020)

  • As of December 28, 2020, there were 968 Units operated by franchisees and 40 Units operated by Smoothie King. Of the 1,008 Units, 893 Units operated by franchisees and 39 Units operated by Smoothie King had been open during the 13-month period ending December 28, 2020, meaning Units opened prior to December 3, 2019.
  • The 893 Units do not include 32 Units that permanently closed during the 2020 fiscal year or 1 Unit that Smoothie King purchased from a franchisee.
  • Of those 893 franchised Units, 66 Units were excluded since (i) they were not scheduled to be open daily during the reporting period, (ii) they were temporarily closed for more than an 8-week period during the fiscal year 2020, (iii) they did not use the POS system required by Smoothie King, or (iv) they sold non-Smoothie King approved items pursuant to prior versions of the franchise agreement (2 Units).
  • Of the 827 franchised Units referenced in the below table, all reported sufficient financial performance information to be included in this financial performance representation.
  • The information below does not include information from Units operated by Smoothie King.

Top 10%

  • Number of Units in Category:  82
  • Average Net Sales:  $935,280
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  32/39%
  • Median Net Sales:  $898,175
  • High Net Sales:  $1,636,073
  • Low Net Sales:  $794,559

Top 25%

  • Number of Units in Category:  206
  • Average Net Sales:  $793,456
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  84/41%
  • Median Net Sales:  $751,827
  • High Net Sales:  $1,636,073
  • Low Net Sales:  $623,954

Top 50%

  • Number of Units in Category:  413
  • Average Net Sales:  $672,270
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  162/39%
  • Median Net Sales:  $623,662
  • High Net Sales:  $1,636,073
  • Low Net Sales:  $492,127

Top 75%

  • Number of Units in Category:  620
  • Average Net Sales:  $593,329
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  244/39%
  • Median Net Sales:  $549,148
  • High Net Sales:  $1,636,073
  • Low Net Sales:  $386,544

Bottom 10%

  • Number of Units in Category:  82
  • Average Net Sales:  $247,246
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  48/59%
  • Median Net Sales:  $258,452
  • High Net Sales:  $299,626
  • Low Net Sales:  $131,024

Bottom 25%

  • Number of Units in Category:  206
  • Average Net Sales:  $305,821
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  117/57%
  • Median Net Sales:  $316,099
  • High Net Sales:  $383,008
  • Low Net Sales:  $131,024

Bottom 50%

  • Number of Units in Category:  413
  • Average Net Sales:  $370,726
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  228/55%
  • Median Net Sales:  $384,973
  • High Net Sales:  $490,825
  • Low Net Sales:  $131,024

Bottom 75%

  • Number of Units in Category:  620
  • Average Net Sales:  $430,924
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  315/51%
  • Median Net Sales:  $433,199
  • High Net Sales:  $623,252
  • Low Net Sales:  $131,024

Total

  • Number of Units in Category:  827
  • Average Net Sales:  $521,461
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  352/43%
  • Median Net Sales:  $490,938
  • High Net Sales:  $1,636,073
  • Low Net Sales:  $131,024

Table A-2 – Average Net Sales of USA Units (January 1, 2019 to December 30, 2019)

  • As of December 30, 2019, there were 931 Units operated by franchisees and 38 Units operated by Smoothie King. Of the 969 Units, 838 Units operated by franchisees and 34 Units operated by Smoothie King had been open during the 13-month period ending December 30, 2019, meaning Units opened prior to December 1, 2018.
  • The 838 Units do not include 20 Units that permanently closed during the 2019 fiscal year.
  • Of those 838 franchised Units, 32 Units were excluded since (i) they were not scheduled to be open daily during the reporting period, (ii) they were temporarily closed for more than an 8-week period during the fiscal year 2019, (iii) they did not use the POS system required by Smoothie King, or (iv) they sold non-Smoothie King approved items pursuant to prior versions of the franchise agreement (2 Units).
  • Of the 806 franchised Units referenced in the below table, all reported sufficient financial performance information to be included in this financial performance representation.
  • The information below does not include information from Units operated by Smoothie King.

Top 10%

  • Number of Units in Category:  80
  • Average Net Sales:  $839,133
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  28/35%
  • Median Net Sales:  $810,178
  • High Net Sales:  $1,599,239
  • Low Net Sales:  $720,160

Top 25%

  • Number of Units in Category:  201
  • Average Net Sales:  $723,000
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  76/38%
  • Median Net Sales:  $694,291
  • High Net Sales:  $1,599,239
  • Low Net Sales:  $586,824

Top 50%

  • Number of Units in Category:  403
  • Average Net Sales:  $625,096
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  157/39%
  • Median Net Sales:  $586,202
  • High Net Sales:  $1,599,239
  • Low Net Sales:  $476,846

Top 75%

  • Number of Units in Category:  604
  • Average Net Sales:  $559,891
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  244/40%
  • Median Net Sales:  $526,874
  • High Net Sales:  $1,599,239
  • Low Net Sales:  $380,121

Bottom 10%

  • Number of Units in Category:  80
  • Average Net Sales:  $257,797
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  46/58%
  • Median Net Sales:  $271,163
  • High Net Sales:  $310,433
  • Low Net Sales:  $132,781

Bottom 25%

  • Number of Units in Category:  201
  • Average Net Sales:  $313,428
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  120/60%
  • Median Net Sales:  $325,253
  • High Net Sales:  $379,736
  • Low Net Sales:  $132,781

Bottom 50%

  • Number of Units in Category:   403
  • Average Net Sales:  $371,314
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  224/56%
  • Median Net Sales:  $379,913
  • High Net Sales:  $476,370
  • Low Net Sales:  $132,781

Bottom 75%

  • Number of Units in Category:  604
  • Average Net Sales:  $423,252
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  309/51%
  • Median Net Sales:  $427,177
  • High Net Sales:  $585,907
  • Low Net Sales:  $132,781

Total

  • Number of Units in Category:  806
  • Average Net Sales:  $498,205
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  358/44%
  • Median Net Sales:  $476,608
  • High Net Sales:  $1,599,239
  • Low Net Sales:  $132,781

Table A-3 – Average Net Sales of USA Units (January 1, 2018 to December 31, 2018)

  • As of December 31, 2018, there were 873 Units operated by franchisees and 29 Units operated by Smoothie King. Of the 902 Units, 760 Units operated by franchisees and 23 Units operated by Smoothie King had been open during the 13-month period ending December 31, 2018, meaning Units opened prior to December 1, 2017.
  • The 760 Units do not include 15 Units that permanently closed during the 2018 fiscal year.
  • Of those 760 franchised Units, 22 Units were excluded since they were not scheduled to be open daily during the reporting period, or were temporarily closed for more than an 8-week period during the calendar year 2018.
  • Of the 738 Units referenced in the table below, all reported sufficient financial performance information to be included in this financial performance representation.
  • The information below does not include information from Units operated by Smoothie King.

Top 10%

  • Number of Units in Category:  73
  • Average Net Sales:  $845,902
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  27/37%
  • Median Net Sales:  $814,837
  • High Net Sales:  $1,735,139
  • Low Net Sales:  $732,033

Top 25%

  • Number of Units in Category:  185
  • Average Net Sales:  $730,278
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  73/40%
  • Median Net Sales:  $702,753
  • High Net Sales:  $1,735,139
  • Low Net Sales:  $585,964

Top 50%

  • Number of Units in Category:  369
  • Average Net Sales:  $629,157
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  145/39%
  • Median Net Sales:  $585,964
  • High Net Sales:  $1,735,139
  • Low Net Sales:  $475,493

Top 75%

  • Number of Units in Category:  554
  • Average Net Sales:  $562,101
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  220/40%
  • Median Net Sales:  $530,228
  • High Net Sales:  $1,735,139
  • Low Net Sales:  $379,016

Bottom 10%

  • Number of Units in Category:  73
  • Average Net Sales:  $251,789
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  40/55%
  • Median Net Sales:  $256,839
  • High Net Sales:  $305,835
  • Low Net Sales:  $87,737

Bottom 25%

  • Number of Units in Category:  185
  • Average Net Sales:  $308,690
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  106/57%
  • Median Net Sales:  $318,490
  • High Net Sales:  $379,016
  • Low Net Sales:  $87,737

Bottom 50%

  • Number of Units in Category:  369
  • Average Net Sales:  $367,312
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  210/57%
  • Median Net Sales:  $379,016
  • High Net Sales:  $475,296
  • Low Net Sales:  $87,737

Bottom 75%

  • Number of Units in Category:  554
  • Average Net Sales:  $421,946
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  292/53%
  • Median Net Sales:  $429,609
  • High Net Sales:  $585,964
  • Low Net Sales:  $87,737

Total

  • Number of Units in Category:  738
  • Average Net Sales:  $498,235
  • Number and Percent That Met or Exceeded the Average Gross Sales in Category:  334/45%
  • Median Net Sales:  $475,394
  • High Net Sales:  $1,735,139
  • Low Net Sales:  $87,737

Part B – Statement of Average and Median Annual Net Sales Percentage Increase for Units

  • Part B below includes the average and median Net Sales percentage increase for Units based on a comparison of Net Sales for Units open for a comparable period in both years.
  • Partial years are included in the calculation; for example, if a Unit was opened on October 1, 2018, there would be three months of sales from both years included in the 2019-versus-2018 comparison.
  • The information disclosed includes only Units scheduled to be open daily during the reporting period, or were closed for less than an 8-week period during each calendar year.
  • Of the total number of Units listed for each comparison year in the table below, all reported sufficient financial performance information to be included in this financial performance representation.

2020 vs. 2019

  • Number of Units:  827
  • Average Percentage (Same-Store Sales) Increase:  2.46%
  • Number and Percentage of Units That Met or Exceeded Average Percentage Increase:  415/50%
  • Median Percentage Increase:  2.61%

2019 vs. 2018

  • Number of Units:  806
  • Average Percentage (Same-Store Sales) Increase:  1.43%
  • Number and Percentage of Units That Met or Exceeded Average Percentage Increase:  408/51%
  • Median Percentage Increase:  1.56%

2018 vs. 2017

  • Number of Units:  738
  • Average Percentage (Same-Store Sales) Increase:  0.36%
  • Number and Percentage of Units That Met or Exceeded Average Percentage Increase:  342/46%
  • Median Percentage Increase:  0.45%

2017 vs. 2016

  • Number of Units:  660
  • Average Percentage (Same-Store Sales) Increase:  1.23%
  • Number and Percentage of Units That Met or Exceeded Average Percentage Increase:  331/50%
  • Median Percentage Increase:  1.29%

2016 vs. 2015

  • Number of Units:  585
  • Average Percentage (Same-Store Sales) Increase:  9.38%
  • Number and Percentage of Units That Met or Exceeded Average Percentage Increase:  275/47%
  • Median Percentage Increase:  8.73%

2015 vs. 2014

  • Number of Units:  520
  • Average Percentage (Same-Store Sales) Increase:  9.79%
  • Number and Percentage of Units That Met or Exceeded Average Percentage Increase:  260/50%
  • Median Percentage Increase:  9.64%

2014 vs. 2013

  • Number of Units:  476
  • Average Percentage (Same-Store Sales) Increase:  9.19%
  • Number and Percentage of Units That Met or Exceeded Average Percentage Increase:  242/51%
  • Median Percentage Increase:  9.26%

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