Smoothie King Franchise FDD, Profits, Costs & Fees (2024)
Smoothie King was founded in 1973 and is headquartered in Dallas, Texas. It began franchising in 1989 and has grown into the largest smoothie and smoothie bowl brand worldwide, with over 1,350 locations. The franchise’s mission is to inspire healthier lifestyles by offering smoothies tailored to specific health goals.
The menu features a variety of smoothies designed for fitness, wellness, and meal replacements. Smoothie King’s focus on customization and high-quality ingredients distinguishes it from competitors. The brand regularly updates its offerings to keep up with trends and customer preferences.
Franchisees benefit from strong support, including top-tier training, marketing services, and ongoing operational help. Smoothie King’s proven business model and market strength make it an appealing opportunity for investors.
Smoothie King Franchise Stats
Smoothie King
Number of units: 1,030 franchises
Initial investment: $312,000 - $1,379,000
Average revenue (AUV): $561,000
Initial Investment
How much does it cost to start a Smoothie King franchise? It costs on average between $312,000 – $1,379,000 to start a Smoothie King franchised restaurant.
This includes costs for construction, equipment, inventory, and initial operating expenses. The exact amount depends on various factors, including the type of restaurant you choose, the location, and whether the franchisee chooses to lease or purchase the property. Smoothie King offers 2 types of franchises:
| Type of Expenditure | Amount (Free-Standing) | Amount (Non-Free-Standing) |
|---|---|---|
| Initial Franchise Fee | $25,000–$30,000 ($15,000 for a Non-Traditional location) | $25,000–$30,000 ($15,000 for a Non-Traditional location) |
| Three Months’ Rental & Deposit | $5,000–$25,000 | $5,000–$30,000 |
| Technology Systems | $9,100 – $12,215 | $12,000 – $14,500 |
| Grand Opening Marketing | $15,000 for Traditional Units and $7,500 for Non-Traditional Units | $15,000 for Traditional Units and $7,500 for Non-Traditional Units |
| Travel and Training Expenses | $1,000–$6,000 | $2,700–$6,000 |
| Insurance (First Year’s Premium) | $2,500–$7,500 | $3,500–$7,500 |
| Other Prepaid Expenses | $1,000–$2,500 | $14,700–$29,400 |
| Start-Up Supplies, Inventory | $23,000-$24,000 | $23,000-$24,000 |
| Furniture, Fixtures & Equipment, Millwork and Graphics | $80,000–$140,000 | $100,000–$130,000 |
| Architectural & Engineering Professional Services | $3,500–$14,500 | $42,000–$52,000 |
| Signage | $5,000–$14,000 | $28,000–$38,000 |
| Leasehold Improvements | $135,000–$280,000 | $450,000–$875,000 |
| Legal, Accounting & Organizational Costs | $500–$4,000 | $500–$4,000 |
| Miscellaneous Costs | $1,000–$5,000 | $1,000–$5,000 |
| Drive-Thru | $0–$33,750 | $25,000–$33,750 |
| Additional Funds—3 Months | $5,000–$25,000 | $15,000–$25,000 |
| TOTAL | $311,601–$638,465 | $762,400–$1,379,150 |
Average Revenue (AUV)
How much revenue can you make with a Smoothie King franchise? A Smoothie King franchised restaurant makes on average $561,000 in revenue (AUV) per year.
Here is the extract from the Franchise Disclosure Document:
This compares to $603,000 yearly revenue for similar healthy franchises. Below are 10 Smoothie King competitors as a comparison:
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Smoothie King Franchise Disclosure Document
Recent Legal Disputes and Litigation
Smoothie King has recently encountered several legal issues, most notably a significant data breach in 2023. In March of that year, the company discovered that unauthorized parties had accessed personal information, affecting around 8,300 individuals.
The exposed data included names and Social Security numbers. This incident has led to multiple class action lawsuits filed by law firms representing those impacted by the breach. These legal actions focus on Smoothie King’s failure to secure customer data, raising concerns about its data protection measures.
In addition to the data breach, Smoothie King is facing a patent infringement lawsuit filed by Symbology Innovations LLC. This case, initiated in 2023 in the U.S. District Court for the Eastern District of Texas, centers around allegations that Smoothie King improperly used patented technology without permission.
These legal challenges highlight potential risks for Smoothie King and its franchisees, particularly in terms of data security and intellectual property compliance. The outcome of these lawsuits could affect the brand’s reputation and its relationship with franchisees.
Frequently Asked Questions
How many Smoothie King locations are there?
As of the latest data, Smoothie King operates a total of 1,373 locations worldwide. Of these, approximately 968 units are franchised and 40 are company-owned. The majority of Smoothie King’s presence is franchise-driven, with most stores being independently operated by franchisees.
This franchise model has helped Smoothie King expand rapidly, both domestically and internationally, with locations in the United States, South Korea, the Cayman Islands, and Trinidad and Tobago.
What is the total investment required to open a Smoothie King franchise?
The total investment required to open a Smoothie King franchise ranges from $297,000 to $662,000.
What are the ongoing fees for a Smoothie King franchise?
For a Smoothie King franchise, the ongoing fees include a royalty fee of 6% of gross sales or a minimum of $500 per month, whichever is higher. This fee grants franchisees the right to use the brand’s name and operational systems.
Additionally, franchisees must contribute 3% of their gross sales to national marketing efforts. In regions with an established regional marketing fund, the marketing fee can increase to 2% of gross sales. These fees help maintain brand consistency and support marketing efforts across all franchise locations.
What are the financial requirements to become a Smoothie King franchisee?
To become a Smoothie King franchisee, there are specific financial requirements that must be met. Prospective franchisees need to have a minimum net worth between $300,000 and $500,000. This requirement ensures that they possess the financial stability to support the business, including initial investments and any operational costs that arise.
Additionally, franchisees are required to have liquid assets of $100,000 to $150,000. These liquid assets are essential for covering upfront costs, such as franchise fees, equipment purchases, and initial operating expenses.
How much can a Smoothie King franchise owner expect to earn?
The average gross sales for a Smoothie King franchise are approximately $0.56 million per location. Assuming a 15% operating profit margin, $0.56 million yearly revenue can result in $84,150 EBITDA annually.
Who owns Smoothie King?
Smoothie King is owned by Wan Kim, a South Korean entrepreneur who acquired the company in 2012. Before purchasing Smoothie King, Wan Kim had been a franchisee of the brand since 2002. Under his leadership, the company has focused on expanding both domestically and internationally, particularly in South Korea.
Wan Kim’s ownership has helped drive the brand’s growth and innovation, further cementing Smoothie King’s presence as a global leader in the smoothie and health-conscious beverage industry.
Disclaimer
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