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Business Smoothie King making a splash with franchise growth

Smoothie King making a splash with franchise growth

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Fueled by continued sales, a renewed strategy by leadership to elevate the brand and build both franchisees and fans, and consumers’ growing thirst for living healthy, active lifestyles, Smoothie King is expanding its presence at home and abroad while maintaining its royal status in the booming juice and smoothie bar industry.

After more than four decades, Smoothie King, the original smoothie, is still in demand. People look to its products – including sports beverages, energy bars and vitamin supplements – as a food alternative and part of a low-calorie diet or regular exercise routine. In 2015, the company was ranked No. 1 in the juice bar category and No. 92 overall on Entrepreneur Magazine’s Annual Franchise 500 list, the 23rd year the New Orleans area-based brand has occupied the top spot. This year, the brand was voted No. 1 in the limited-service restaurant beverage-snack category in Nation’s Restaurant News’ Consumer Picks issue.

Steve Kuhnau introduced the fresh-blended smoothie in 1973 after experimenting with mixing fresh fruits, vitamins and other supplements in his blender at home. The high-protein drinks improved his health and inspired the creation of his company, Smoothie King. The company’s mission of helping people achieve better health in a tasty way and its motto, “smoothies with a purpose,” remain today.

In 1989, Smoothie King became the first franchised smoothie bar/health food store in the United States. Since then, the U.S. juice and smoothie bar industry has risen steadily. U.S. revenues in 2014 were $2.2 billion, reports IBISWorld, with projections of 2 percent annual growth to $2.4 billion in 2019. The international market is expected to reach almost $11 billion this year, according to research by Global Industry Analysts Inc. Smoothies make up 43 percent of the current market.

In 2012, Wan Kim, CEO of SK USA Inc., bought the controlling interest in Smoothie King Franchises Inc. from co-founders Steve and Cindy Kuhnau. Wan discovered Smoothie King while earning his MBA at the University of California in Irvine and became an avid fan. He was Smoothie King’s first international franchisee, opening a store in South Korea in 2003. He has now has more than 130 locations in that country. Since taking over, Wan has re-energized the brand and made a long-term commitment to grow it worldwide, with accelerated plans to open more than 1,000 new stores by the end of 2017.

Wan is well on the way to realizing that goal. In July, Smoothie King opened its 800th store, Orlando, Florida. The brand operates in 33 states, the Cayman Islands, Singapore and South Korea and is developing locations in the Middle East and Vietnam. It also is pursuing development in Japan, China, India, Indonesia, the Philippines, Taiwan, Australia and Brazil.

Texas is Smoothie King’s largest market. Two stores open each month in the Lone Star State, and many of those new locations are in Tarrant County and North Texas.

“We have a lot of development headed your way. We’re really aggressive in that market. Almost all of the expansion is by existing franchises,” said Steve Shields, senior business development manager at Smoothie King.

Shields has been with the company for 13 years and is co-owner of four Smoothie Kings in Louisiana. He said new locations recently have opened or are being developed in Fort Worth, Watauga, Saginaw, Lake Worth, Arlington and the Mid-Cities.

“Our smoothies are meal replacements. People in Dallas and Fort Worth have healthy and active lifestyles. It’s a good combination. That’s who we go after,” Shields said. “People are consuming the product for breakfast, lunch, after school, early evening and after workouts. Our smoothies focus on diet, health and performance, and they are custom-blended.”

He added, “We have really great franchisees. They do a great job for themselves and for the brand.”

Steele Pearce is a multi-unit franchisee enthusiastic about growing with the brand. In July, Pearce opened a store in North Richland Hills, his third one. He recently signed an area development agreement for the Waco region. In September, he’ll open the first Smoothie King in Waco across from Baylor University.

A native of Colleyville, Pearce grew up around franchising and the smoothie business. His father owned a Frullati Cafe & Bakery restaurant. Pearce earned a political science degree from Texas Tech University in 2007, with plans to become a lawyer. Instead, he decided to go into business for himself. His dad offered to help him get started in franchising.

“My mom was obsessed with Smoothie King,” Pearce said. “So when I started looking at franchises I looked at Smoothie King. I was already familiar with it. It’s a growing company. It was affordable to get into, relatively speaking, compared to other franchises. Also, at that time, there was an open market with only five or six stores in Tarrant County.”

Pearce graduated from Tech on a Saturday and started his two-week training with Smoothie King the following Monday. Within a few months, at age 23, he opened his first Smoothie King location in Euless. In July 2010, he opened a second store in North Fort Worth.

Last year, Pearce made a juicy profit of $1.2 million between his two stores and expects to hit $1.6 million in 2016 with the opening of two more.

“It’s a great company. It’s something where you can make money but it’s something you have to work,” he said. “In most cases, where a store failed is because the franchisee just wanted to open a store, hire a manager to run it and just collect the money. There are some businesses that are like that but Smoothie King isn’t one of them. You definitely have to be involved. You definitely have to market and build the brand and get a following around your store to make it successful.”

The finishing touches are being made at Tom Breslin’s third Fort Worth store, set to open in August. This one, located in the Ridglea neighborhood on Camp Bowie Boulevard, has a drive-thru window, which Breslin said will give his store an edge.

“People are becoming more fit and active and aware of what they’re eating,” Breslin said. “Smoothie King, I think, stands out from the competition because of its healthy food aspect. That’s what attracted me to the brand.”

Franchising is a career change for Breslin, 34. He and his wife, Jessica, grew up in New Orleans and graduated from Louisiana State University. Breslin was working for a construction company when Jessica was offered a buyer’s position in Dillard’s corporate office in Fort Worth. They moved here and Tom became a stay-at-home dad while searching for a new career. Being from The Big Easy, he noticed there wasn’t a nearby Smoothie King and asked about expanding the brand in Fort Worth.

“Having grown up in New Orleans I thought Smoothie Kings were everywhere,” he said. “I was really unfamiliar with the franchising concept.”

With his parents as business partners, Breslin bought his first store in 2010 on Bryant Irvin Road from an existing franchisee. In 2013, he bought a store in Southlake from another existing franchisee and Jessica quit her job to help him for a few months. She and a friend recently purchased a BKids children’s clothing franchise located near the Breslins’ new Camp Bowie Smoothie King store.

“We’ll be able to cross market the stores,” Tom Breslin said. “We’re doing a promotion through BKids for a free smoothie. A free smoothie is one way to attract new customers. There are still so many people who haven’t tried us. That helps get them in and keeps them coming back.”

Breslin is scouting West Seventh Street for a fourth location, possibly in the new Left Bank development under construction.

Both Breslin and Pearce appreciate the company’s expansion strategy and support for its franchise owners.

“When we first started there wasn’t much support,” Breslin said. “Wan has changed it leaps and bounds. He’s really trying to improve the system and is dedicated to the brand.”

Shields agrees.

“It’s a fun business,” he said. “It’s a happy time of the day for someone to go get a smoothie. They’re doing something good for themselves. It’s a positive experience and I think the energy is shared by our team members to the consumer and the consumer to our team members. We’re in a real fun business.”

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