Tropical Smoothie Cafe Franchise: Average Sales ($992K) vs. Cost ($296K-$661K)

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

Section I – Estimated initial investment (franchise costs) for a Tropical Smoothie Cafe franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Tropical Smoothie Cafe franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned Tropical Smoothie Cafe outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Tropical Smoothie Cafe franchise opportunity

Section V – Presentation and analysis of Tropical Smoothie Cafe’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022, 2021, and 2020 average, median, highest, and lowest net revenues, number of stores, and number and percentage of stores that surpassed the average net revenues in the category for the top 10%, top 25%, top 50%, top 75%, bottom 10%, bottom 25%, bottom 50%, bottom 75%, and all franchised traditional Tropical Smoothie Cafe stores that had been open for at least one full year as of the end of the company’s fiscal year

Section VI – Key ratios, comparables, computations, and analyses for the Tropical Smoothie Cafe franchise opportunity (exclusive content for Platinum subscribers)

Section I – Tropical Smoothie Cafe Franchise Costs

• Tropical Smoothie Cafe franchise costs (end-cap or in-line location), based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $15,000 to $30,000
• Professional Fees:  $5,000 to $26,000
• Restaurant Fixtures, Furniture, and Equipment:  $105,500 to $166,500
• Leasehold Improvements:  $150,000 to $288,500
• Signage:  $5,000 to $22,000
• Initial Inventory:  $3,000 to $18,500
• Initial Training Expenses:  $1,000 to $18,500
• Initial Deposits:  $1,000 to $22,500
• Grand Opening Contribution:  $5,000 to $10,000
• Additional Funds (Working Capital) (3 to 6 Months):  $6,000 to $59,000
• Total Estimated Tropical Smoothie Cafe Franchise Costs:  $296,500 to $661,500

Section II – Tropical Smoothie Cafe’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Tropical Smoothie Cafe’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $30,000 ($15,000 for qualified veterans)
• Royalty Fee:  6% of Gross Sales
• National Marketing Fee:  3% of Gross Sales
• Local Advertising Cooperative Contribution:  a minimum of 2% of Gross Sales

Section III – Number of Franchised and Company-Owned Tropical Smoothie Cafe Outlets

Franchised

2020

• Outlets at the Start of the Year:  833
• Outlets at the End of the Year:  913
• Net Change:  +80

2021

• Outlets at the Start of the Year:  913
• Outlets at the End of the Year:  1,037
• Net Change:  +124

2022

• Outlets at the Start of the Year:  1,037
• Outlets at the End of the Year:  1,197
• Net Change:  +160

Company-Owned

2020

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2021

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2022

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

Section IV – News Updates on the Tropical Smoothie Cafe Franchise

• Tropical Smoothie Cafe Achieves New Milestones in 2022

• Tropical Smoothie Cafe Propels Franchise Momentum in Q3

• Tropical Smoothie Cafe Opens First Double Drive-Thru

• Tropical Smoothie Cafe Drives Strong Development Through First Half of 2022

• Tropical Smoothie Cafe Keeps Momentum Going in 2022

• Tropical Smoothie Cafe Ranked No. 11 on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Tropical Smoothie Cafe Franchise (Item 19, 2023 FDD)

• The following tables provide historical sales information for Tropical Smoothie Cafe franchised restaurants (“Restaurants”) that were open at least one full year as of: (a) the calendar year 2022 for 950 Restaurants; (b) the calendar year 2021 for 768 Restaurants; and (c) the calendar year 2020 for 661 Restaurants.

• The tables do not include any financial performance information for any other types of franchises, such as non-traditional locations (i.e., college campus or other captive locations) or seasonal locations, and do not include any franchises of any type that had not been open for at least one year on December 25, 2022, December 26, 2021, and December 27, 2020, respectively.

• The information presented is not a forecast of future potential performance.

• For purposes of the tables below, Net Revenue means all revenue related to the sale of products and performance of services at the Restaurant, whether cash or credit, and regardless of collection in the case of credit, and income of every kind or nature related to the Restaurant, less any discounts. Net Revenue does not include (i) bona fide refunds to customers, (ii) revenues from sales taxes or other add-on taxes collected from customers by you and actually transmitted to the appropriate taxing authority, (iii) sales of used equipment not in the ordinary course of business, or (iv) sales of gift cards or similar products (but the redemption of any such card or product will be included in Net Revenue).

• The tables provide the average and median Net Revenues for the following categories of Restaurants in 2022, 2021, and 2020 on a category and cumulative basis:

• (a) the top 10% revenue producing Restaurants (meaning the average Net Revenue for the number of Restaurants that are in the top 10% of Net Revenues for that year);
• (b) the top 25% revenue producing Restaurants (which includes the Restaurants that are in the top 10%);
• (c) the top 50% revenue producing Restaurants (which includes the Restaurants that are in the top 10% and the top 25%);
• (d) the top 75% revenue producing Restaurants (which includes the Restaurants that are in the top 10%, the top 25%, and the top 50%);
• (e) the bottom 10% revenue producing Restaurants (meaning the average Net Revenue for the number of Restaurants that are in the bottom 10% of Net Revenue for that year);
• (f) the bottom 25% revenue producing Restaurants (which includes the Restaurants that are in the bottom 10%);
• (g) the bottom 50% revenue producing Restaurants (which includes the Restaurants that are in the bottom 10% and the bottom 25%); and
• (h) the bottom 75% revenue producing Restaurants (which includes the Restaurants that are in the bottom 10%, the bottom 25%, and the bottom 50%).

• The franchisor presents the average Net Revenue for the year in that category as well as the number and percentage achieving or surpassing the average Net Revenue in that category alone and cumulative for all Restaurants. For example, 85 of the 238 Restaurants in the top 25% for 2022 (or 36%), 68 of the 192 Restaurants in the top 25% for 2021 (or 35%), and 63 of the 166 Restaurants in the top 25% for 2020 (or 38%) achieved or surpassed that average.

Part 1 – Average Net Revenues in 2022

Top 10%

• Number of Restaurants:  95
• Average Net Revenues:  $1,648,079
• Median Net Revenues:  $1,563,369
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  32
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  34%
• Lowest Net Revenues:  $1,420,551
• Highest Net Revenues:  $2,462,202

Top 25%

• Number of Restaurants:  238
• Average Net Revenues:  $1,434,774
• Median Net Revenues:  $1,361,375
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  85
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  36%
• Lowest Net Revenues:  $1,199,440
• Highest Net Revenues:  $2,462,202

Top 50%

• Number of Restaurants:  475
• Average Net Revenues:  $1,254,078
• Median Net Revenues:  $1,199,440
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  187
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  39%
• Lowest Net Revenues:  $966,373
• Highest Net Revenues:  $2,462,202

Top 75%

• Number of Restaurants:  712
• Average Net Revenues:  $1,120,867
• Median Net Revenues:  $1,077,445
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  302
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  42%
• Lowest Net Revenues:  $745,503
• Highest Net Revenues:  $2,462,202

Total

• Number of Restaurants:  950
• Average Net Revenues:  $992,613
• Median Net Revenues:  $966,293
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  435
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  46%
• Lowest Net Revenues:  $291,705
• Highest Net Revenues:  $2,462,202

Bottom 10%

• Number of Restaurants:  95
• Average Net Revenues:  $510,337
• Median Net Revenues:  $533,740
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  57
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  60%
• Lowest Net Revenues:  $291,705
• Highest Net Revenues:  $598,967

Bottom 25%

• Number of Restaurants:  238
• Average Net Revenues:  $608,931
• Median Net Revenues:  $625,699
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  132
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  55%
• Lowest Net Revenues:  $291,705
• Highest Net Revenues:  $745,493

Bottom 50%

• Number of Restaurants:  475
• Average Net Revenues:  $731,149
• Median Net Revenues:  $745,493
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  249
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  52%
• Lowest Net Revenues:  $291,705
• Highest Net Revenues:  $966,213

Bottom 75%

• Number of Restaurants:  712
• Average Net Revenues:  $844,812
• Median Net Revenues:  $848,598
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  360
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  51%
• Lowest Net Revenues:  $291,705
• Highest Net Revenues:  $1,197,716

Total

• Number of Restaurants:  950
• Average Net Revenues:  $992,613
• Median Net Revenues:  $966,293
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  435
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  46%
• Lowest Net Revenues:  $291,705
• Highest Net Revenues:  $2,462,202

• As of December 25, 2022, there were 1,197 franchised Restaurants and 1 company-owned Restaurant. Of the 1,197 franchised Restaurants, 1,044 were franchised Restaurants that had been open for at least 12 months as of December 25, 2022. Of the 1,044 Restaurants, 35 Restaurants were excluded since they were non-traditional locations. Of the 1,009 Restaurants, 59 were excluded since they were not open for at least 357 days in 2022 (51 out of 52 weeks in 2022 fiscal year). Of the 950 Restaurants referenced in the above table, all reported sufficient financial performance information to be included in this financial performance representation.

Part 2 – Average Net Revenues in 2021

Top 10%

• Number of Restaurants:  77
• Average Net Revenues:  $1,743,007
• Median Net Revenues:  $1,656,224
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  28
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  36%
• Lowest Net Revenues:  $1,444,805
• Highest Net Revenues:  $2,733,965

Top 25%

• Number of Restaurants:  192
• Average Net Revenues:  $1,491,802
• Median Net Revenues:  $1,392,896
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  68
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  35%
• Lowest Net Revenues:  $1,207,610
• Highest Net Revenues:  $2,733,965

Top 50%

• Number of Restaurants:  384
• Average Net Revenues:  $1,289,351
• Median Net Revenues:  $1,207,310
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  151
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  39%
• Lowest Net Revenues:  $962,000
• Highest Net Revenues:  $2,733,965

Top 75%

• Number of Restaurants:  576
• Average Net Revenues:  $1,142,572
• Median Net Revenues:  $1,089,440
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  243
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  42%
• Lowest Net Revenues:  $750,973
• Highest Net Revenues:  $2,733,965

Total

• Number of Restaurants:  768
• Average Net Revenues:  $1,009,803
• Median Net Revenues:  $961,969
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  348
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  45%
• Lowest Net Revenues:  $351,400
• Highest Net Revenues:  $2,733,965

Bottom 10%

• Number of Restaurants:  77
• Average Net Revenues:  $514,087
• Median Net Revenues:  $532,555
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  47
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  61%
• Lowest Net Revenues:  $351,400
• Highest Net Revenues:  $602,658

Bottom 25%

• Number of Restaurants:  192
• Average Net Revenues:  $611,499
• Median Net Revenues:  $622,526
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  108
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  56%
• Lowest Net Revenues:  $351,400
• Highest Net Revenues:  $750,901

Bottom 50%

• Number of Restaurants:  384
• Average Net Revenues:  $730,256
• Median Net Revenues:  $750,937
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  214
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  56%
• Lowest Net Revenues:  $351,400
• Highest Net Revenues:  $961,938

Bottom 75%

• Number of Restaurants:  576
• Average Net Revenues:  $849,137
• Median Net Revenues:  $845,317
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  286
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  50%
• Lowest Net Revenues:  $351,400
• Highest Net Revenues:  $1,207,010

Total

• Number of Restaurants:  768
• Average Net Revenues:  $1,009,308
• Median Net Revenues:  $961,969
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  348
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  45%
• Lowest Net Revenues:  $351,400
• Highest Net Revenues:  $2,733,965

• As of December 26, 2021, there were 1,038 franchised Restaurants and 1 company-owned Restaurant. Of the 1,038 franchised Restaurants, 906 were franchised Restaurants that had been open for at least 12 months as of December 26, 2021. Of the 906 Restaurants, 29 Restaurants were excluded since they were non-traditional locations. Of the 877 Restaurants, 109 were excluded since they were not open for at least 357 days in 2021. Of the 768 Restaurants referenced in the above table, all reported sufficient financial performance information to be included in this financial performance representation.

Part 3 – Average Net Revenues in 2020

Top 10%

• Number of Restaurants:  66
• Average Net Revenues:  $1,511,049
• Median Net Revenues:  $1,427,557
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  23
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  35%
• Lowest Net Revenues:  $1,247,858
• Highest Net Revenues:  $2,565,824

Top 25%

• Number of Restaurants:  166
• Average Net Revenues:  $1,269,450
• Median Net Revenues:  $1,183,220
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  63
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  38%
• Lowest Net Revenues:  $1,013,971
• Highest Net Revenues:  $2,565,824

Top 50%

• Number of Restaurants:  331
• Average Net Revenues:  $1,081,757
• Median Net Revenues:  $1,013,971
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  122
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  37%
• Lowest Net Revenues:  $783,711
• Highest Net Revenues:  $2,565,824

Top 75%

• Number of Restaurants:  496
• Average Net Revenues:  $950,335
• Median Net Revenues:  $890,972
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  202
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  41%
• Lowest Net Revenues:  $602,452
• Highest Net Revenues:  $2,565,824

Total

• Number of Restaurants:  661
• Average Net Revenues:  $836,218
• Median Net Revenues:  $783,771
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  297
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  45%
• Lowest Net Revenues:  $228,158
• Highest Net Revenues:  $2,565,824

Bottom 10%

• Number of Restaurants:  66
• Average Net Revenues:  $407,479
• Median Net Revenues:  $421,297
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  38
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  58%
• Lowest Net Revenues:  $228,158
• Highest Net Revenues:  $488,125

Bottom 25%

• Number of Restaurants:  165
• Average Net Revenues:  $493,175
• Median Net Revenues:  $504,808
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  94
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  57%
• Lowest Net Revenues:  $228,158
• Highest Net Revenues:  $601,790

Bottom 50%

• Number of Restaurants:  330
• Average Net Revenues:  $589,935
• Median Net Revenues:  $602,121
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  182
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  55%
• Lowest Net Revenues:  $228,158
• Highest Net Revenues:  $783,424

Bottom 75%

• Number of Restaurants:  495
• Average Net Revenues:  $690,932
• Median Net Revenues:  $682,688
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  234
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  47%
• Lowest Net Revenues:  $228,158
• Highest Net Revenues:  $1,013,960

Total

• Number of Restaurants:  661
• Average Net Revenues:  $836,218
• Median Net Revenues:  $783,711
• Number That Attained or Surpassed Stated Result in Category (Cumulative):  297
• Percent That Attained or Surpassed Stated Result in Category (Cumulative):  45%
• Lowest Net Revenues:  $228,158
• Highest Net Revenues:  $2,565,824

• As of December 27, 2020, there were 913 franchised Restaurants and 1 company-owned Restaurant. Of the 913 franchised Restaurants, 817 were franchised Restaurants that had been open for at least 12 months as of December 27, 2020. Of the 817 Restaurants, 29 Restaurants were excluded since they were non-traditional locations. Of the 788 Restaurants, 127 were excluded since they were not open for at least 357 days in 2020. Of the 661 Restaurants referenced in the above table, all reported sufficient financial performance information to be included in this financial performance representation.

• As stated, the sales for each of the Restaurants presented are limited to the sales results for Restaurants that had been open for a full 12 months of operations as of December 25, 2022, December 26, 2021, and December 27, 2020, respectively. Sales during the first year of operations are likely to be significantly less than for those that have been open for a year or more.

• All Tropical Smoothie Cafe Restaurants offer substantially the same products and services to the public. None of the franchised Tropical Smoothie Cafe Restaurants received any services not generally available to other franchisees, and substantially the same services will be offered to new franchisees.

• The franchisor obtained these historical financial results from the information submitted by its franchisees. Neither the franchisor nor an independent certified public accountant has independently audited or verified the information.

• Some Restaurants have sold the amounts shown in the tables. Your individual results may differ. There is no assurance you will sell as much.

Section VI – Tropical Smoothie Cafe Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️