Buzz words like “hot” and “low cost” do in fact apply to health and lifestyle QSR concept Smoothie King, but the real standout for the 700+ unit franchise is its steady growth trajectory, which is not expected to slow anytime soon.
Attempting to draw a comparison, Smoothie King Franchise Development Manager Stephen Foley uses the word “might” with hesitance when he says there might be five other QSR brands out there today who can boast as steep a growth trajectory as Smoothie King.
“Our Average Unit Volume (AUV) continues to rise, and we’re so proud to say that we’ve now had five consecutive years of same store sales increases,” said Foley. “Here we are only a little more than half way through the year and we’re already close to a double digit same store sales increase—again.”
Chad Tramuta, Franchise Development Manager, says that from an operations standpoint, there are several factors contributing to the rising sales numbers. Yes, the average startup cost is lower than other concepts in the same sector, but Smoothie King also has low cost goods and doesn’t use any meat products. Each location has less employees than your average QSR and a low cost of labor.
“We’re at a point now where we are setting records with each new store we open and we’ve got more franchisees in growth mode than ever before,” Tramuta says. “In addition to our proven business model, we are in the sweet spot of what people want right now.”
With rising obesity rates and the rising cost of health care, Tramuta explained with confidence that there’s nowhere for the healthy smoothie business to go but up.
Since the new ownership took over the Smoothie King brand under the direction of CEO Wan Kim in 2012, another element the executive team attributes to the brand’s success has been the shift in corporate ownership and responsibility.
“When the new ownership took over, there was one corporate location and now we have 26,” said Foley. “One thing that has changed and that we are now intensely committed to is the corporate leadership really being willing to put our money where our mouth is.”
Smoothie King’s corporate team now conducts testing of everything from new store models, POS system changes and design to new products in corporate locations and select franchise locations, analyzes results of testing and makes any necessary adjustments before rolling out changes to the entire system.
Jessica Roques, Development Coordinator, points to the brand’s first-ever 3,000 square foot, “high-end” model that just opened in a posh area of Arlington, Texas, about two months ago.
“This is obviously a higher investment level and a slightly different business model,” says Roques. “It’s a stand-alone location with a drive-thru and so of course we wanted to test this at the corporate level before offering it as a business opportunity to our franchise partners, and the location is performing better than we ever even thought it would.”
The Arlington location serves as a testament to the versatility of the brand, which can be successful both in a stadium setting and as a healthy option in ritzier settings.
Foley says that’s the other stand out he would attribute sales success to. No matter where you are, everyone can appreciate the healthy option of a smoothie at an affordable price. Tramuta also added that this is another reason the brand has seen such success with multi-unit ownership in particular.
“Our franchisees aren’t limited to a small box when it comes to real estate options. Our system has experienced years of consecutive sales increases with a wide variety of locations; everything from 300 square foot airport locations to the new 3,000 square foot stand alone and everything in between,” said Tramuta.
The brand even boasts the benefit of being one of the only concepts out there able to sell its product in the sports venue named for it.
“Our location in Smoothie King Center performs extremely well, and it’s kind of unique in that way,” said Foley. “You’re not going to find people buying paper and office supplies at Staples Center for example; we are fortunate to have a versatile concept that really makes sense and can be successful anywhere.”