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Tropical Smoothie CEO Shares his Strategy for When Private Equity is Looking to Invest

Talk to many Tropical Smoothie Cafe Franchise Owners and they will tell you that CEO Mike Rotondo engenders trust and confidence, because he was once an operator himself. Then there’s the fact that during his tenure, the Cafes have experienced double-digit comp sales growth since 2013.


That ability to see things through the eyes of his Franchise Owners gives added credibility to his thoughts about the importance of communication when a private equity firm invests in a franchise concept, as it did with Tropical Smoothie Cafe in 2012.


As he says in a recent article in Franchising World, “The foundation of a successful franchise is open communication and transparency between the franchisor and Franchise Owners, and this relationship is more important than ever after a private equity firm invests in your brand.”


The article goes on to state that the entrance of a private equity firm into a franchise system can cause uncertainty for some Franchise Owners. To head that off, Rotondo encourages franchisors to be upfront about addressing fears and also to communicate how it can be an exciting time for the brand.


He encourages franchise leadership to communicate why the private equity firm is the right fit and how their values align with the brand and its franchisees. He also advises leadership to demonstrate how the investment will positively affect the business, such as infrastructure improvements that can help the Franchise Owners’ bottom line.


Ask Rotondo about his business philosophy for Tropical Smoothie Cafe, and he will tell you that he plays to win. When a private equity firm is interested in your brand, a deft handling of the situation will create goodwill in a franchise system and make the environment a win-win for everyone involved.

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