Nekter Juice Bar Franchise: $683K Turnover & 6 Years Payback

Nekter Juice Bar is one of the few recent successful franchises in the healthy foods and drinks industry in the US. Indeed, since it started franchising in 2012 the chain now has 184 stores scattered across the US.

Beyond the hype, Nekter franchises have also some strong financials: you would make on average $683,000 in turnover per year and earn a 10% net profit margin.

But is this worth the startup costs of about $420,000 you would need to pay for as the franchisee? In this article we’re looking at how much profits you can make with a Nekter Juice Bar franchise and whether you should buy one. Let’s find out!

Nekter Juice Bar franchises: key figures

Franchise fee	$35,000
Royalty fee	6.0%
Marketing fee	4.0%
Investment (mid-point)	$419,000
Average sales	$683,000
Sales to investment ratio	1.6x
Payback period*	6 years
Minimum net worth	$350,000
Minimum liquid capital	$125,000

What is Nekter Juice Bar?

Nekter Juice Bar is an American casual fast food chain of vegan juices that serves a variety of freshly made, clean, and nutrient-rich juices, superfood smoothies, acai bowls, cold-pressed cleanses, and a variety of healthy snacks.

It was founded in 2010 by Steve and Alexis Schulze in Santa Ana, California, where it is based today. The chain began franchising in 2012, and today has more than 184 stores in the US.

Pros and cons of Nekter Juice Bar franchises

Pros

• Exclusive territory protection: Nekter Juice Bar provides its franchisees with an exclusive development market to operate in. The franchisor does not license any other franchise or operate a competing channel in the protected area.
• Absentee ownership allowed: The franchisor provides its franchisees with a passive investment opportunity. Franchisees may not actively be involved in the daily operations of the business.
• Extensive franchise support: The brand supports its franchisees right from inception to ensure they establish and operate successful restaurants. It provides them with helpful top management guidance, P&L management, operational reviews, and data-driven analyses of the restaurant’s performance.
• Comprehensive training: Nekter Juice Bar has in place a comprehensive initial training program to equip its franchisees with a basic foundation about the brand’s procedures and prepare them for a successful grand opening. Its training program consists of 80 hours of on-the-job training and 17 classroom hours.
• Marketing support: The Nekter Juice franchise gives its franchisees a dedicated marketing platform to create awareness and publicize their local stores. Also, it provides them with efficient promotional campaign tools such as national media, regional advertising, digital marketing, social media, email marketing, and loyalty programs.
• Simple business model: The brand’s business model does not necessitate franchisees to use fryers or vent hoods. This makes the franchise easy to establish, lowering startup costs and allowing franchisees to focus on product quality. 

Cons

• No financing: The franchisor does not directly or indirectly finance its franchisees. Franchisees must approach third-party lenders to finance the franchise fee, startup costs, equipment, inventory, accounts receivable, and payroll.
• Not a part-time business: The Nekter Juice Bar franchise is not a part-time business. It requires franchisees to follow the parent company’s scheduled operating hours.
• Competition: Nekter Juice Bar faces stiff competition from other brands in the juice and smoothie industry, such as Tropical Smoothie Cafe, Smoothie King and Jamba.

How much should you invest for a Nekter Juice Bar?

You would need to invest around $419,050 to open a Nekter Juice Bar restaurant on average.

As the investment amount is an average, it depends on several factors like location, restaurant size, etc. For example, a big restaurant, or a restaurant in a big city needs higher rent than a small restaurant.

According to the latest FDD, the investment amount can be as low as $216,000 and as high as $622,100. 

Nekter Juice Bar startup costs

This amount is meant to cover all the startup costs needed to open a restaurant business. Meaning you do not need to pay any additional fees after the initial investment. In addition to the initial franchise fee of $30,000, as the initial investment you will also pay for

• Formation costs: real estate construction & improvements, architect, millwork, fixtures, furnishings, equipment, signage, POS, security system, music, professional fee, training, etc. 
• Initial marketing: grand opening marketing costs
• Operating costs: opening inventory, 3 month’s rent, 3 month’s insurance, utilities, first 3 months working capital, etc.

Startup cost	Low	High
Initial Franchise Fee	$35,000	$140,000
Formation Costs	$141,700	$362,100
Initial Marketing	$8,000	$10,000
Operating Costs	$31,300	$110,000
Total	$216,000	$622,100

What’s the average turnover of a Nekter Juice Bar?

On average, a Nekter Juice Bar franchise makes $682,895 in sales per year.

The sales number is the annual median sales of 105 franchised restaurants operating in 2021. Although there were a total of 115 restaurants as of January 1st, 2021, only 105 restaurants were open and operating for at least one full calendar.

Approximately half of the restaurants generate more than $750K in revenue per year (see the breakdown by quartile below).

How profitable is a Nekter Juice Bar franchise?

An average Nekter Juice Bar franchise makes $115,842 in profits per year. This represents a 17% profit margin.

The 17% adjusted EBITDA margin is on the lower end compared to similar franchises as per our intelligence (~25-27% industry average). This is mainly because of a very high rent cost (19% sales vs. 8% industry average).

Note that Nekter Juice Bar doesn’t disclose any financial information regarding costs on their FDD. So we had to use the franchise benchmarks for COGS (25% sales) and labor costs (29%) instead.

Profit and loss	Amount	% of sales
Sales	$682,895	100%
COGS	$(170,724)	25.0%*
Labor	$(198,040)	29.0%*
Rent	$(130,000)	19.0%
Royalty + marketing fees	$(68,290)	10.0%
Adjusted EBITDA	$115,842	~17%

Is buying a Nekter Juice Bar franchise a good investment?

Due to Nekter Juice Bar’s lower margins than the average franchise, we found it takes on average 6 years for the initial investment to be paid back with the future profits.

That’s an average payback period: whilst not necessarily bad, we found that the most profitable franchises had payback periods of about 5 years or less. In comparison, Smoothie King had a payback period of 8 years and Tropical Smoothie Cafe an excellent payback period of only 3 years.

All things considered, including the pros and cons discussed earlier, we consider Nekter is a good investment if you want to get into the juice bar business.

How does it compare vs. other franchises?