Planet Smoothie Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$84,150 - $478,500
Franchise Fee
$12,000
Min Cash Required
$3,000
Total US Locations
154
Business Summary
Planet Smoothie operates restaurants that specialize in preparing and serving smoothies, smoothie bowls, fruit drinks, functional drinks, nutritional supplements, and other food and beverage items and related goods. Franchisees operate these restaurants, which can be traditional units in places like shopping malls or strip centers, or non-traditional units in venues such as airports, amusement parks, or college campuses.
Corporate History
Kahala Franchising, L.L.C. was formed in Arizona on December 29, 2008, focusing on franchising quick-service restaurants. The Planet Smoothie brand itself has an earlier origin, having been developed and licensed by Planet Smoothie Franchises, LLC starting in August 1995. In 2012, Tasti D-Lite LLC, a predecessor that Kahala Brands later acquired, began offering Planet Smoothie franchises. In 2015, Kahala Brands purchased Tasti D-Lite LLC, bringing Planet Smoothie under its portfolio. In 2016, Kahala Brands merged with MTY Food Group, Inc., making Kahala Franchising part of a larger Canadian-based restaurant conglomerate that franchises over 55 different concepts.
Financial Overview
Investment Range
$84,150 - $478,500
Franchise Fee (Low)
$12,000
Franchise Fee (High)
$25,000
Minimum Cash Required
$3,000
Royalty %
5%
Marketing %
2%
Equipment Costs (Low)
$152,000
Equipment Costs (High)
$352,000
Working Capital
$10,000
Audited Financials
Yes
Offers Financing
Yes
Financing Details
Planet Smoothie does not offer direct or indirect financing or guarantee obligations, except in specific, discretionary situations. For instance, if a landlord requires a lease guarantee, Planet Smoothie or an affiliate may agree to act as guarantor. In such a case, the franchisee would pay a lease guarantee fee equal to 10% of the total guaranteed rental obligations, up to a maximum of $10,000. Additionally, if a franchisee purchases a corporate-owned Planet Smoothie restaurant "as-is" from an affiliate, Planet Smoothie may finance up to 100% of the purchase price. This financing would include an annual interest rate between 0% and 12%, repayable in equal monthly installments over a period of 12 to 60 months. A first lien on all equipment and a personal guarantee from the franchisee (and their spouse, if applicable) would be required.
Performance Metrics
Total US Locations
154
Franchised Units
154
Corporate Units
0
Avg Square Footage
1,000
Franchising Since
2012
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
18
Litigation Summary
Planet Smoothie and its affiliated companies have been involved in several legal disputes, mostly concluded, concerning various brands under the Kahala Franchising and MTY Food Group umbrella. These past cases often involved allegations of breach of contract by franchisees, misrepresentation of financial performance, and disputes over compliance with franchise laws or agreements, many of which resulted in settlements. Some administrative actions also occurred concerning franchise registration and disclosure compliance. More recently, within the last fiscal year (ending November 30, 2024), Kahala Franchising itself has filed two lawsuits against franchisees for breach of contract and forcible entry and detainer.
Bankruptcy History
Planet Smoothie has no bankruptcy history to report for the franchisor or its key management personnel.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their Planet Smoothie franchise, franchisees must provide at least 120 days' notice before the agreement expires. They must be in good standing, meaning they are not in default of their agreement or any other agreements with Planet Smoothie or its affiliates, and have not received more than three notices of default during the term (or more than two in the five years preceding renewal). Franchisees need to have an existing location or secure a suitable new one, sign a general release, and execute the then-current franchise agreement, which may have different terms, including higher royalty and advertising fees. They must also pay a renewal franchise fee, remodel or refurbish their location if required, and be current on all financial obligations to Planet Smoothie.
Training & Support Program
Franchisor Assistance
Planet Smoothie provides assistance to its franchisees both before and after opening. For pre-opening, this includes helping with site selection (though the franchisee is ultimately responsible for the choice) and providing approved design drawings and specifications for construction. Franchisees must use approved architects and general contractors. Planet Smoothie also provides a confidential operations manual with detailed operating procedures. Initial training, totaling 64 hours (24 hours in-store and 40 hours for new owners), is provided for up to two individuals, typically in Scottsdale, Arizona, or online. Post-opening, Planet Smoothie offers grand opening support with a representative on-site for up to four days. They maintain a continuing advisory relationship, offering consultation in marketing, merchandising, and general business operations. They also provide updated operating standards, conduct periodic inspections, and offer assistance in resolving operational problems. Franchisees use an approved POS system for sales reporting and compliance with PCI DSS standards. Planet Smoothie also manages a national advertising fund (currently 2% of gross sales) and may require participation in regional advertising cooperatives (an additional 1% of gross sales).
Initial Training Hours
64
Training Location
Online, KTEC (Kahala Training & Education Center) in Scottsdale, AZ, or such other location designated by the franchisor.
Ongoing Support
After opening, Planet Smoothie franchisees receive a variety of ongoing support. This includes a representative visiting their restaurant for up to four days during the grand opening week to assist with operations and marketing. Planet Smoothie maintains a continuous advisory relationship, consulting with franchisees on marketing, merchandising, and general business operations to help improve and develop their business. They provide updated operating standards and conduct periodic inspections and quality checks to ensure consistency across the system. The franchisor may also inform franchisees about available third-party software for administrative, bookkeeping, accounting, and inventory control. Upon request, Planet Smoothie will reasonably assist franchisees in resolving operating problems. The franchisor also reviews and approves any proposed restaurant relocations. Additionally, Planet Smoothie may offer franchisees the option for a one-time, five-year renewal of their franchise agreement, provided they meet certain requirements.
Franchise Requirements
Ideal Candidate Profile
Planet Smoothie seeks franchisees who intend to actively participate in the direct operation and daily affairs of their restaurant, although personal participation is not strictly required. The franchisor strongly recommends that owners devote substantial time to the business, performing tasks such as employee training and supervision, inventory checks, sales and food cost review, local marketing, and bookkeeping to ensure efficient operations. Franchisees must also employ a full-time, on-premises manager who meets the franchisor's qualification criteria and devotes their full time to managing the business.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Hands-On
Territory Type
Non-Exclusive
Territory Size Requirements
Planet Smoothie franchisees do not receive an exclusive territory. The franchise is granted for a specific approved location, and other Planet Smoothie restaurants, whether franchised or company-owned, may be established in the immediate vicinity, even across the street or in the same venue as the franchisee's location. The franchisor explicitly states that Planet Smoothie franchisees will not receive an exclusive territory, an option, a right of first refusal, or other rights to acquire additional franchises.
Staffing Notes
Planet Smoothie requires franchisees to employ at least one full-time, on-premises supervisor (a "Manager") for their restaurant. This Manager must always be a qualified restaurant operator, meet Planet Smoothie's criteria, and dedicate their entire working hours to the management, operation, and development of the franchised business. All personnel employed by the franchisee must adhere to Planet Smoothie's sanitation, cleanliness, and demeanor standards and wear approved uniforms. Additionally, employees interacting directly with customers must have sufficient literacy and fluency in English (or the primary local language) to adequately serve the public.