Juice Bar Franchise Cost and Profitability
Why open a juice bar franchise
Although building a new juice bar brand from scratch can be a rewarding and profitable business model, it carries a high level of risk and requires long term commitment to navigate the challenges of running a food and beverage business. It can take a long time to establish your brand, configure your recipes, and document your policies and procedures to a point where the business is operating efficiently. If you would prefer to partner with an established brand that has been through the process already and has a proven business model, you can choose to open a franchise.
The franchisor (company offering the franchise stores) will offer you guidance throughout the entire business plan, startup process and beyond. A good franchisor will help you with everything from choosing a retail location, setting up the kitchen, training your staff, marketing, and more (if the franchisor isn’t offering you these things, you may want to consider choosing a different franchise). In return, the franchisor will ask for a percentage of gross sales (royalty), marketing fees, and an up-front franchise fee.
Royalties and fees vary between businesses. Generally you can expect to pay 5% – 10% of gross sales as a royalty and marketing fee, and an up-front franchise fee of $25K – $50K to get started. This franchise fee is generally what it costs the franchisor to on-board a new franchisee. All that training, legal documentation, and human resource time costs the company significant money.
My favorite franchise juice bar is Clean Juice (a Goodnature client), which has grown quickly since 2016 with over 100 franchises sold, opening a couple of new stores every month. They are currently the only 100% organic certified franchise—offering bottled cold-pressed juice, smoothies, custom juices, acai bowls, and other food and beverage products. For a behind-the-scenes look into their business, check out episode three of Behind the Juice:
Their team was nice enough to share some investment costs with me. Here’s what you could expect as a total investment for opening a Clean Juice franchise location, which would be somewhat in line with other franchises as well.
Each item here shows a range of cost from “low amount” to “high amount.” Flat fees don’t have a range, so the amounts are the same in each column.
|Description||Low Amount||High Amount|
|Real Estate Fees||$4,000||$10,000|
|Furniture, Fixtures, Kitchen Equipment||$60,000||$90,000|
|Local Architects, Blueprints, Building Prints||$5,000||$10,000|
|Miscellaneous Pre-Opening Expenses||$5,000||$12,000|
|Point of Sale (POS) and Office Equipment||$2,500||$5,000|
|Utility Deposits and Sales Tax||$1,000||$3,000|
|Opening Inventory and Smallwares||$7,500||$12,000|
|General Manager Expenses While Training||$1,000||$6,000|
|Grand Opening Marketing||$5,000||$10,000|
|Additional Funds (3) Months||$15,000||$40,000|
Profit and revenue
According to Clean Juice documentation, each store can bring in an estimated $700K – $1M in revenue per year. Out of the total revenue dollars, you can expect about $250K – $400K in gross profit. These gross profit calculations include payroll expenses but not overhead like rent and utilities, which will vary depending on location. I would expect about half of gross profit to be left after paying overhead, leaving the owner with $125K – $200K in net profit per location.
Although owning one franchise store may bring in enough profit to support the owner’s living expenses and take a salary, most franchisees get into the business with plans of opening multiple locations. Owning five, ten, or even twenty locations of a franchise has the benefit of multiplying the revenue and profit, setting the owner up for a very successful business venture in the long term. Of course, there are no guarantees in business and there are risks in opening franchise stores just like any other business.
How to choose the best franchise
Choosing the right business partner will be the most important decision you will make, so spend the time to do your research. Most franchisors will be happy to discuss the opportunity with you and provide you with all the details associated with the process. They will have basic qualifications they look for in new franchisees. They will require that you have the financial means required to open a new business, and they generally look for franchisees located in areas with a high likelihood of succeeding.
Besides speaking to the franchisor, I would recommend also reaching out to some of their current franchisees and asking them about their experience. Don’t be shy, you will find that most franchisees will be happy to spend ten minutes to share their experience with you. They remember being in your position not too long ago.
Have any questions for the juicing community? Leave a comment below.