Smoothie Factory Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$78,500 - $544,000
Franchise Fee
$7,500
Total US Locations
7
Business Summary
Smoothie Factory operates retail stores offering a diverse menu of non-alcoholic, fruit-based smoothie beverages, frozen yogurt, and fresh-squeezed fruit and vegetable juices. Smoothie Factory+ Kitchen locations also provide cafe items such as sandwiches, soups, salads, wraps, flatbreads, toasts, snack plates, and desserts. These stores operate under the brand names SMOOTHIE FACTORY+ KITCHEN, SMOOTHIE FACTORY, and SMOOTHIE FACTORY JUICE BAR.
Corporate History
Smoothie Holdings FC, LLC, the franchisor for Smoothie Factory, was incorporated in Texas on July 29, 2013. The company acquired the majority of its assets from The Smoothie Factory, Inc. (SFI) in September 2013, with SFI having offered Smoothie Factory franchises internationally since August 1997. In 2023, Smoothie Factory launched its re-concepted brand image as SMOOTHIE FACTORY + KITCHEN, expanding its menu to include cafe items alongside its signature beverages. Smoothie Factory operates alongside several affiliates, including Red Mango FC, LLC, Souper Salad FC, LLC, Orange Leaf FC, LLC, Humble Ds FC, LLC, Friendly's Restaurants Franchising Co, LLC, and CJ Fresh Holdings FC, LLC, all of which franchise or license other food and beverage concepts.
Financial Overview
Investment Range
$78,500 - $544,000
Franchise Fee (Low)
$7,500
Franchise Fee (High)
$35,000
Royalty %
6%
Marketing %
3%
Equipment Costs (Low)
$15,000
Equipment Costs (High)
$170,000
Working Capital
$15,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Smoothie Factory's financial statements indicate that the company has experienced a loss from operations for fiscal year 2024 and negative cash flow from operating activities for both fiscal years 2023 and 2024. The company relies on additional funding from its ultimate parent company. These factors initially raised substantial doubt about Smoothie Factory's ability to continue as a going concern. However, management believes this doubt has been alleviated due to a commitment from the ultimate parent and its affiliates to provide the necessary funding to ensure the company has sufficient cash for at least twelve months following the financial statements' issuance.
Financing Details
Smoothie Factory does not offer any direct or indirect financing to its franchisees and does not guarantee any franchisee's notes, leases, or other obligations.
Performance Metrics
Total US Locations
7
Franchised Units
7
Corporate Units
0
Avg Square Footage
1,050
Franchising Since
2013
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
3
Litigation Summary
Smoothie Factory has disclosed three concluded litigation actions. In November 2022, Smoothie Factory sued Farhaj Haq and Wahaj Haq for breach of contract due to unpaid royalties after their store closed early. This case was settled in April 2023, with the franchisees agreeing to pay $9,000. In April 2024, Smoothie Factory initiated a lawsuit against Extremeline Nutrition, LLC, Raymond Suerte, and Elisa Nawas for failing to adhere to post-expiration agreement terms. This dispute was resolved in May 2024 with an agreed permanent injunction requiring the franchisees to remove all Smoothie Factory branding and cease operating a competing business at the premises. Lastly, in May 2024, Smoothie Factory filed a petition against Fortune Ajebon, LLC, Fortune Ajebon, and Manling Li for breaching post-termination covenants. This case was settled in December 2024, with the franchisee agreeing to de-identify the store, stop operating a competing business at the location, and pay Smoothie Factory $4,500.
Bankruptcy History
Smoothie Factory has no bankruptcy history to disclose.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew the franchise, Smoothie Factory franchisees must notify the franchisor of their intent to renew 12 to 24 months before the initial term expires. They must be in good standing, not in default of any material provisions of their agreements, and current on all payments owed to Smoothie Factory, its affiliates, and third-party suppliers. Franchisees must also have the right to retain their current store premises or secure approved substitute premises. They are required to pay a renewal fee, sign Smoothie Factory's then-current franchise agreement (which may have different terms and fees), renovate and refurbish their store to meet current brand standards, submit a walkthrough video of their store, and meet the franchisor's current qualifications and training requirements. Additionally, the franchisee and all owners must sign a general release of claims against Smoothie Factory and its affiliates.
Training & Support Program
Franchisor Assistance
Smoothie Factory provides comprehensive assistance to its franchisees. Before opening, Smoothie Factory helps with site approval within 30 days of receiving all necessary information. It offers initial training for two individuals at no tuition cost and provides five days of on-site store opening assistance, with franchisees responsible for travel, lodging, and dining costs. Smoothie Factory also loans a copy of its Confidential Operations Manual and provides pre-opening consultation on development, store layout, equipment, and purchasing. Furthermore, it manages and expends the franchisee's New Store Marketing Plan Fee to promote the store's grand opening. Once the store is operational, Smoothie Factory offers ongoing consultation and advice, including information on new product development, operational guidance, marketing strategies, and financial insights. It communicates information about approved suppliers and manages the Brand Development Fund for advertising and marketing initiatives.
Initial Training Hours
48
Training Location
Franchisor's corporate office and a designated training store selected by Smoothie Factory.
Ongoing Support
After opening, Smoothie Factory provides ongoing consultation and advice to its franchisees. This support may include information about new product development, operational and management instruction, advertising and marketing strategies, and financial and accounting guidance. This consultation can be delivered through store visits by Smoothie Factory personnel, meetings, seminars, conferences, and electronic or printed materials. Smoothie Factory also communicates information about its Designated Suppliers and administers the Brand Development Fund for the collective benefit of the brand. Additionally, Smoothie Factory offers support through various marketing and promotional efforts, including social media management, email marketing tools, customer loyalty programs, and a mobile app and online ordering system via the Lunchbox platform.
Franchise Requirements
Ideal Candidate Profile
Smoothie Factory seeks franchisees who are committed to full-time, hands-on management and operation of their business. The ideal candidate will either be an individual franchisee or a general partner (if a partnership) or hold at least a 10% equity interest in the business entity. They must successfully complete Smoothie Factory's initial training program and any additional required training. For multi-unit operators or if the managing owner cannot be full-time, a Key Person must be appointed who also dedicates full-time efforts to store operations and management. Candidates for transfer or new franchisees should meet Smoothie Factory's educational, managerial, financial, and business standards, possess good moral character, business reputation, and credit rating, and demonstrate the aptitude and ability to operate the franchised business with sufficient equity capital.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Full-Time
Territory Type
Protected
Staffing Notes
Smoothie Factory requires its franchisees to maintain a sufficient number of competent, conscientious, and trained staff to ensure prompt and proper customer service. This includes having at least a manager or shift leader on duty at all times during operating hours, covering daily opening and closing procedures. Franchisees are responsible for upholding high standards for employee conduct and appearance, including wearing designated uniforms. Smoothie Factory emphasizes the franchisee's exclusive responsibility for hiring, determining wages and benefits, scheduling, disciplining, and discharging employees, while also requiring compliance with established policies for handling customer complaints and maintaining good customer relations. For multi-unit operations or if the Managing Owner is not full-time, a Key Person must be designated to devote full-time efforts to store operations and management.