Do you want to start a restaurant business by buying Tropical Smoothie franchise? If YES, here is how much it cost to open a Tropical Smoothie franchise and their requirement. Tropical Smoothie Cafe, sometimes referred to as Tropical Smoothie, or TSC, is a health conscious restaurant brand that got its start in the United States. Founded in 1997, Tropical Smoothie Cafe is a fast casual restaurant concept that inspires healthier lifestyles across the country.

Till date, this restaurant brand has over 700 locations nationwide. With snack and meal options for any time of day, Tropical Smoothie Cafe serves smoothies, bowls, wraps, sandwiches, and flatbreads in an atmosphere that appeals to people of all ages.

Steps to Opening a Tropical Smoothie Café

STEP 1: Pre-qualification

The first step towards acquiring a Tropical Smoothie Cafe (TSC) Franchise is to express your intention via mail. A Development Representative will contact you to discuss critical areas associated with becoming a Franchise Owner and to answer any initial questions you may have.

STEP 2: Franchise Application

The franchise application is a brief 4-page document that is meant to be completed by the franchisee. It helps them get to know you, your business background and experience, financial capabilities, goals and interests, management style, etc. There is no cost associated with submitting your application and it is non-binding. It simply allows them to learn a little more about you.

Step 3: Franchise Disclosure Document (Fdd) Review/Business Planning Tools Provided

By law, every franchisor must deliver to its prospective Franchise Owner a copy of its FDD to ensure that the Franchise Owner prospect has all the pertinent information about their company, and every aspect of their business relationship with their Franchise Owner. They will also provide you with business planning tools to continue your due diligence.

Once they have all required documentation on file, your Franchise Development Representative will schedule a time with you to do a Virtual Brochure Presentation which will give you more detailed information on franchisee support, real estate procedures, design and construction process/assistance, and local and national marketing programs.

Step 5: Discovery Day (Optional)

Here, the restaurant will welcome you to their Support Center in Atlanta, GA to meet the team in person. If this is of interest to you, your Franchise Development Representative can help you coordinate the details.

Step 6: Executive Committee Approval

Once our Franchise Leadership Team has approved your application and they have all of the legally required documentation from you, they will then draw up your franchise agreement.

Step 7: Open Your Tropical Smoothie Cafe

After you have scaled through these phases, then you are now ready to open your smoothie business. The team would help you to plan out a befitting opening day to draw in enough customers as possible, and as well give you the best publicity they can.

How Much It Cost to Open a Tropical Smoothie Franchise

FRANCHISE FEES

$75,000 is required in available capital if you want to become a franchisee. Tropical Smoothie Cafe expects new franchisees to have a net worth of at least $100,000. The low end of the total investment required to open a new franchise is $254,000. $385,000 is the maximum that someone opening a location should expect to invest.

New franchisees pay Tropical Smoothie Cafe a franchise fee of $30,000 for the first Cafe, $20,000 for every additional Cafe, and ,000 for qualified Veterans. This fee covers your training, plans for building out the Cafe, access to the systems, technology, operational support and more. Franchise agreements last for 15 years.

Royalty Fees

Each Cafe pays 6% toward royalty fees, 3% toward national marketing, and 2% towards local store marketing based on gross sales.

Trainings That Will Be Provided

Tropical Smoothie Café has always believed in setting up their own franchisees for success. They provide different kinds of training which includes: a four-week training program, consisting of two weeks in a nearby Cafe, one week in a classroom setting at their Support Center in Atlanta, Georgia and one week onsite for your Grand Opening.

Franchise Location and size

Typically, Tropical Smoothie Cafes are between 1,400 to 1,600 square feet. They can provide you with a recommendation for the ideal area based on their real estate model. Additionally, they have an in-house Real Estate Team and a network of local brokers that will assist you in performing a real estate site search.

If you are considering a Tropical Smoothie Cafe franchise, these are some of fees you should take note of

All fees and expenses described below are nonrefundable. All fees are uniformly imposed. Except as otherwise indicated below, Tropical Smoothie Cafe imposes all of the fees and expenses listed, and they are payable to it.

Tropical Smoothie Cafe may require you to pay any or all periodic or recurring fees to it by electronic funds transfer. It may require you to sign the Pre-Authorized Bank Form.

  1. Initial Franchise Fee:  $15,000 to $30,000
  1. Grand Opening Contribution: at least $7,500

Incentive Referral Program

  1. Royalty Fee: 6% of Gross Sales
  1. National Marketing Fee: 3% of Gross Sales
  1. Local Advertising Cooperative Contribution: 2% of Gross Sales
  1. MIS Fee: currently, $50 per month per Restaurant
  1. Online Ordering: currently, $44 per month and a $105 per quarter Micros Licensing Fee per Restaurant location
  1. Managed Firewall Fee: currently, $103 per month per Restaurant
  1. Interest Charge on Late Payments: the lower of (i) 18% per annum, or (ii) the highest rate permitted by applicable state law
  1. Late Fee: $25 per week (or portion thereof)
  1. Non-Compliance Fee: up to $500 each time you default and for each week (or portion thereof) that the default continues.
  1. Reimbursement: Tropical Smoothie Cafe’s out-of-pocket expenses
  1. Audit Fee: cost of audit, plus interest on late payment
  1. Transfer Fee: 5% of the total sales price or $10,000, whichever is greater; or, $2,500 upon transfer of minority interest
  1. Management Fee: 10% of Gross Sales for the period in which Tropical Smoothie Cafe operates the Franchised Business
  1. Default Cure: Tropical Smoothie Cafe’s costs and expenses (including the allocation of any internal costs) for such action, plus 10% as an administrative fee
  • Due Date: On demand.
  • Payable if you breach or default under any provision of the Franchise Agreement, and Tropical Smoothie Cafe acts to cure the default on your behalf.
  1. Supplier Approval: reasonable costs and expenses of inspection and testing currently estimated to range from $500 to $2,000
  • Due Date: As invoiced.
  • Tropical Smoothie Cafe may require you to pay it for its reasonable costs and expenses if it evaluates a proposed product, service, or supplier at your request.
  1. Customer Satisfaction: reimbursement of Tropical Smoothie Cafe’s costs and expenses
  • Due Date: As invoiced.
  • You must participate in any customer satisfaction and/or franchise compliance programs (e.g. guest surveys, mystery shoppers, etc.) that Tropical Smoothie Cafe designates.
  • Tropical Smoothie Cafe may require you to reimburse it for the cost of such programs or to pay the vendors directly.
  • You must also reimburse Tropical Smoothie Cafe if you fail to respond to and resolve any customer complaints or negative feedback, and it chooses to do so on your behalf.
  1. Indemnification:will vary under circumstances
  • Due Date: On demand.
  • You must indemnify Tropical Smoothie Cafe when certain of your actions result in loss or damages to it.
  1. Liquidated Damages: amount equal to the average Royalty Fees for the last 12 months (or shorter period, if Franchised Business has been in operation less than 12 months), multiplied by the lesser of (i) 18 or (ii) the number of months remaining in the term.
  • Due Date: On demand.
  • Tropical Smoothie Cafe may require you to pay it this amount in the event you terminate the Franchise Agreement without cause or it terminates the Franchise Agreement for cause.
  • If applicable law does not permit Tropical Smoothie Cafe to collect liquidated damages, it will be entitled to collect actual damages.
  1. Costs and Attorneys’ Fees: will vary under circumstances
  • Due Date: On demand.
  • The prevailing party in any legal proceeding is entitled to reimbursement of its costs and expenses, including reasonable accounting and attorneys’ fees.
  1. Business Interruption/Loss of Revenue Insurance Proceeds: will vary under circumstances
  • Due Date: On demand.
  • You must pay Tropical Smoothie Cafe 5% of the insurance proceeds of any business interruption or loss of revenue insurance proceeds that you received in the case of fire or other event that results in damage or destruction of the Franchised Business.
  • If you do not repair or rebuild the Franchised Business in a prompt and timely manner, your Franchise Agreement will automatically terminate.
  1. Relocation of Franchised Business: will vary under circumstances
  • Due Date: On demand.
  • You must reimburse Tropical Smoothie Cafe for the out of-pocket expenses it incurs in helping you relocate.
  1. Training: will vary under circumstances.
  • Due Date: As incurred.
  1. Remodel Marketing Expense: $3,750
  • Due Date: As incurred.
  • Tropical Smoothie Cafe may require you to spend $3,750 on marketing for any remodel.
  1. P&L/Financial Data Software Subscription: currently, $40 start-up fee (currently paid by Tropical Smoothie Cafe); $12.95 monthly subscription (paid by Tropical Smoothie Cafe until December 31, 2019; paid by you beginning January 1, 2022)
  • Due Date: On demand.
  • You must use a web-/cloud-based subscription software, to capture and benchmark profit and loss and related financial data, and report such information to Tropical Smoothie Cafe.
  1. Tax Reimbursement: will vary under circumstances
  • Due Date: On demand.
  • You must reimburse Tropical Smoothie Cafe any amounts a taxing authority imposes on it, any “franchise” tax or other tax that is based on your gross sales, gross revenues, business activities, or operation of your Franchised Business.
  1. Third Party Inspection Fees: will vary under circumstances
  • Due Date: On demand.
  • If you have failed to meet Tropical Smoothie Cafe’s standards after two inspections, and it chooses to conduct a third inspection by a third party, then you must reimburse Tropical Smoothie Cafe for expenses related to the third inspection, including service fees, travel, and living expenses.
  1. Tropical Rewards Application: currently, $175 one-time set-up fee; $50 scanner purchase; $75 per month
  • Due Date: On demand for set-up and scanner; monthly on invoice.
  • You must pay a one-time set-up fee and purchase a scanner for use of the Tropical Rewards Application.
  1. POS License Fee: $1,000 to $3,000 per year
  • Due Date: Annually.
  • You must purchase and maintain a license for your POS System. The annual cost of this license depends on the specific POS configuration in your Store.