Smoothie King Franchise Review and Business Opportunity

Smoothie King got its start back in 1987 when Steve and Cindy Kuhnau began creating health drinks in hopes that they would aide Steve’s allergy problems. Having a nursing background, he felt that by eliminating fats from his diet and focusing on higher protein foods and drinks he might experience some relief from his symptoms. His drink creations were initially sold out of their health food store but as they grew in popularity, a new business opportunity, Smoothie King, was born. They began franchising in 1988 and have seen steady expansion every since. In 2009, a year when most food-service franchises were hit with a down turn, the Smoothie King franchise increased to over 550 franchise units in the United States and another 56 internationally. They are currently seeking new franchisees worldwide and they do not offer exclusive territories.

The Smoothie King franchise is still run by its original founders and is headquartered in Covington, Louisiana. Stores sell various vitamins, healthy snacks, and supplements in addition to smoothies. The growing trend of healthier, faster snacks is fueling the Smoothie King success over the past few years and they have plans for continued growth in 2010. The franchise fee is $25,000 and the estimated start up costs range from $140,400 to $329,500 depending upon location. There is also a 6% ongoing royalty fee. At this level, Smoothie King probably does not qualify as a “low cost” franchise opportunity, but it is close enough to warrant mention in the same context as many of the franchises coming in below the $100,000 startup mark. A minimum net worth of $100,000 is required by a new franchisee with at least $50,000 being liquid capital. Smoothie King does not provide any type of financing but they do allow third party financing.

It is estimated that the average Smoothie King franchise requires 9-11 employees and absentee ownership is allowed. Approximately 60% of all franchisees own more than one location, a fact that must be considered when deciding on entering into this opportunity. It is not uncommon that multiple locations are necessary for a franchisee to see any significant type of profit. The parent company provides training at the corporate headquarters and at the franchisee’s location and also directs a 14 day management training course at company headquarters. Continued support is provided via co-op advertising, newsletters, meetings, internet, and phone.

The Smoothie King franchise appears to be moving in the right direction, but it does require a significant investment and financial risk to get started. There may be other business opportunities that offer a similar return on investment with a must smaller risk. I would suggest exploring all options, including internet based businesses, before starting this venture.

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