Tropical Smoothie Cafe Franchise FDD, Profits, Costs & Fees (2024)
Tropical Smoothie Cafe was founded in 1997 and quickly expanded. Based in Atlanta, Georgia, the brand began franchising the same year. The cafe offers a diverse menu of handcrafted smoothies, sandwiches, flatbreads, wraps, and salads made with fresh ingredients.
Tropical Smoothie Cafe stands out by offering both smoothies and a wide variety of food. Their menu caters to multiple meal times, boosting ticket sales and revenue streams through dine-in, drive-thru, delivery, and catering. The focus on health and wellness appeals to today’s consumers.
Franchisees receive comprehensive training and support. Initial training includes one week of classroom sessions and three to four weeks of in-cafe training. Ongoing education and annual conventions help franchisees succeed.
Tropical Smoothie Cafe Franchise Stats
Tropical Smoothie Cafe
Number of units: 1,141 franchises
Initial investment: $297,000 - $662,000
Average revenue (AUV): $966,000
Initial Investment
How much does it cost to start a Tropical Smoothie Cafe franchise? It costs on average between $297,000 – $662,000 to start a Tropical Smoothie Cafe 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.
| Type of Expenditure | Amount |
|---|---|
| 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) | $6,000 to $59,000 |
| TOTAL | $296,500 to $661,500 |
Average Revenue (AUV)
How much revenue can you make with a Tropical Smoothie Cafe franchise? A Tropical Smoothie Cafe franchised restaurant makes on average $966,000 in revenue (AUV) per year.
Here is the extract from the Franchise Disclosure Document:
This compares to $623,000 yearly revenue for similar healthy franchises. Below are 10 Tropical Smoothie Cafe competitors as a comparison:
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Tropical Smoothie Cafe Franchise Disclosure Document
Recent Legal Disputes and Litigation
Tropical Smoothie Cafe has faced legal challenges from its franchisees in recent years. In 2024, two franchisees in Tampa were found violating federal labor laws. The U.S. Department of Labor investigated and discovered that JAB Adventures Inc. and Three Grls LLC failed to pay workers correctly and violated child labor regulations.
JAB Adventures deducted wages for uniforms and register shortages, causing pay to fall below minimum wage. They also failed to pay overtime. The company allowed minors to work beyond legal limits, leading to $10,000 in fines and $6,520 in back wages.
Similarly, Three Grls LLC was fined $17,494 for not distributing tips properly and allowing minors to work excessive hours. These violations highlight risks for franchisees, such as fines and reputational harm. Maintaining strict labor compliance is critical to avoid costly legal actions and protect brand integrity.
Frequently Asked Questions
How many Tropical Smoothie Cafe locations are there?
As of the latest data, Tropical Smoothie Cafe operates over 1,450 locations, with the vast majority being franchise-owned. There is only 1 company-owned location. This rapid growth has been fueled by franchise agreements and strong performance, with plans to continue expanding further.
What is the total investment required to open a Tropical Smoothie Cafe franchise?
The total investment required to open a Tropical Smoothie Cafe franchise ranges from $297,000 to $662,000.
What are the ongoing fees for a Tropical Smoothie Cafe franchise?
Tropical Smoothie Cafe franchisees are required to pay a royalty fee of 6% of gross sales, which helps cover the support and services provided by the franchisor, such as operational assistance and brand management.
In addition, franchisees must contribute 5.5% of their gross sales to the marketing and advertising fund. This fee is used to promote the brand on a national level, ensuring consistent brand visibility and customer outreach.
What are the financial requirements to become a Tropical Smoothie Cafe franchisee?
To become a Tropical Smoothie Cafe franchisee, the financial requirements include having a minimum net worth of $350,000 and liquid assets of at least $125,000.
These financial prerequisites ensure that potential franchisees are financially equipped to handle the startup costs, operational expenses, and any additional financial obligations involved in opening and running a franchise.
How much can a Tropical Smoothie Cafe franchise owner expect to earn?
The average gross sales for a Tropical Smoothie Cafe franchise are approximately $0.97 million per location. Assuming a 15% operating profit margin, $0.97 million yearly revenue can result in $145,500 EBITDA annually.
Who owns Tropical Smoothie Cafe?
Tropical Smoothie Cafe is currently owned by Levine Leichtman Capital Partners (LLCP), a private equity firm that acquired the brand in 2020. Prior to this acquisition, the company had grown under various ownership structures, including its founders and other investment firms. LLCP has continued to support the expansion and development of the brand since its acquisition.
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