Tropical Smoothie Café is Fast and Serious

Tropical Smoothie Café was named to Franchise Times’ list of smartest growing brands. And here’s what they had to say about us.

CEO Mike Rotondo keeps his eye on two key metrics constantly: first, the number of existing franchisees who add another unit or two. Of 101 franchisee agreements signed last year, 65 percent of those were with existing franchisees. “And I think our biggest deal was a five-pack,” he says, meaning there were no giant development deals that boost the numbers but often fail to materialize.

That proves to him, he says, “OK, this isn’t a one-night stand, this is long-term,” he says.

The second metric is sales growth, particularly the source of the growth. “We’re 11.4 percent up in comp sales, and 95 percent of that increase is coming from traffic” rather than price increases. “We didn’t increase our prices; the average ticket has been in the $8 range for the past four or five years.

“I don’t have an 11 percent increase because I took price. I have an 11 percent increase because we put products out there that our consumers wanted.”

Popular products include a spinach and kale smoothie, recently introduced, that Rotondo insists is delicious. “The real key is, it has to taste good. It has to hit on more than one category; it can’t just be healthy, it can’t just be trendy,” he says.

“Sometimes people rush things to market and all it is is trendy,” he adds.

Rotondo says he reviews every application from franchisees, and will walk down to challenge his franchise development team if someone doesn’t seem like a match.

“We walked away from a big, multi-unit deal last year, and they were dumbfounded,” he says about the prospect. “They were franchisees of other brands, so they got those other brands to make concessions to them, and that doesn’t work for us.”

Tropical Smoothie had 376 units in 2013 and $170 million in revenue.

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