Verified — real FDD extraction
SBA-eligible · directory code S1815 since 2017
Tropical Smoothie Cafe
Food & Dining · independent · est. —
Tropical Smoothie Cafe is a fast-casual chain serving fruit smoothies alongside wraps, sandwiches, and bowls. A franchisee operates a storefront cafe serving health-oriented customers for dine-in, takeout, and delivery.
Tropical Smoothie Cafe net unit count grew +20.3% from 2013–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Proven & strong
Distress
Enough units and history to judge, and the record is good: growing or stable units with clean exits by the standards of its disclosed record. The standout in the record: the system is growing.
Exit rate · latest year
2.2%
vs 8.2% across 146 food & dining systems
Cost to open
$276K–$771K
Item 7 total investment range
SBA loan defaults
10.7%
vs 14.8% avg across rated brands
Market density · Florida
Typical density
-8% thinner than the national average
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2023–2025
Survival record
FDD Item 20 · outlet status by year
In fiscal 2025, 34 of 1,514 franchised outlets left the system — a 2.2% annualized exit rate, vs 8.2% across 146 food & dining systems. Not every exit is a failure — but this is the measurable floor.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2013 | 2014 | 2015 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Outlets at start | 329 | 360 | 413 | 1,198 | 1,372 | 1,515 |
| Opened | 43 | 59 | 65 | 180 | 162 | 170 |
| Transfers | 34 | 28 | 20 | 77 | 79 | 81 |
| Terminations | 5 | 2 | 4 | 2 | 5 | 21 |
| Non-renewals | 0 | 0 | 1 | 1 | 0 | 1 |
| Reacquired by franchisor | 0 | 0 | 0 | 0 | 0 | 0 |
| Ceased — other reasons | 8 | 4 | 8 | 3 | 14 | 12 |
| Outlets at end | 360 | 413 | 465 | 1,372 | 1,515 | 1,651 |
| Net change | +31 | +53 | +52 | +174 | +143 | +136 |
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 677 SBA-backed loans to Tropical Smoothie Cafe franchisees since 2002. Of the 373 that have resolved, 10.7% were charged off (defaulted) rather than paid in full, versus 14.8% across 570 rated brands.
10.7%
40 of 373 resolved defaulted
71.8%
avg. charged-off $ ÷ approved $
7.7%
default rate × loss severity
$482,417
what recent franchisees borrowed
52 mo
approval → charge-off, defaulted loans
79 vs 76
distinct banks still lending
Charge-off rate by loan approval year (%)
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO TROPICAL SMOOTHIE CAFE BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
The owner's side of the deal
FDD × federal loan record
A typical Tropical Smoothie Cafe buyer since 2020 borrowed $482K through SBA — about $68K a year in debt service. Against the brand's own disclosed median unit revenue of $931K, that is 7.3% of every dollar the store takes in — before rent, payroll, food, or royalty.
Who finances it
Live Oak Banking Company
6.9% of this brand's loans
That lender charges off 3.6% of its loans to other franchise brands, vs 14.8% nationally.
Who buys it
73.3%
first-time franchise owners
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators charge off at roughly 10% versus 17% for brands sold mostly to newcomers.
Does experience help here?
+0.1pp
multi-unit vs single-unit owners
Owners of multiple units default at 10.0%; single-unit owners at 9.9%.
Computed from 677 SBA 7(a)/504 loans to Tropical Smoothie Cafe franchisees joined to the brand's own FDD. Debt service assumes level amortization at the average disclosed term and rate. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $35K franchise fee (Item 5) and a total investment of $276K–$771K (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$276K–$771K
all-in investment range
Franchise fee (Item 5)
$35K
upfront, one-time
Royalty (Item 6)
6%
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$60K
6% of sales, before profit
Over a 10-yr term
$600K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for Tropical Smoothie Cafe with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 66 wage cases against operators of this system, recovering $236K in back wages for 870 workers, including 32 child-labor cases. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
66
Back wages owed
$236K
Employees affected
870
Since 2020
34
32 of these cases involved child-labor violations, covering 304 minors across the system's franchised locations.
Read this carefully. The employers in these cases are individual Tropical Smoothie Cafe franchisees — separately owned businesses operating under the brand name — not Tropical Smoothie Cafe itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2025.
Modeled risk
FDD Risk Score · modeled from the public record
Modeled from the public record, this brand looks safer than 87% of systems we score.
Risk percentile
13 / 100
Loan-corroborated
Modeled SBA charge-off
7.8%
Observed SBA charge-off
10.7%
Top drivers: System size (log units) (lowers) · Share financed by high-loss lenders (lowers) · Single-lender dependence (raises) · Item 20 exit rate (lowers). 15+ resolved loans stand behind this estimate. A linear scorecard built from this brand's own disclosure figures plus the federal loan record behind its franchisees; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
news:Nation’s Restaurant News · 19mo ago
Tropical Smoothie Cafe announces Keller closing | Keller - Roanoke - Northeast Fort Worth
news:Community Impact · 20mo ago
Tropical Smoothie Cafe closes one of its eight Tallahassee locations
news:Tallahassee Democrat · 24mo ago
Tropical Smoothie Cafe closes after positive test
news:Messenger News - · 75mo ago
Hepatitis A Outbreak Leads to $100,000 Lawsuit Against Tropical Smoothie Cafe
news:DCist · 122mo ago
11 questions to ask a Tropical Smoothie Cafe franchisee
Built from this brand's own disclosures · take it to your validation calls
The franchisor will give you a list of owners to call. Most buyers ask whether they like it. These are the questions built from what Tropical Smoothie Cafe has actually disclosed — each one carries the number it came from, so you can tell whether the answer squares with the record.
- 01
Tropical Smoothie Cafe’s own Item 20 shows 34 of 1,514 franchised outlets left the system in fiscal 2025 — about 2.2%. Do you know any of those owners, and do you know why they left?
A franchisor will call these “transitions.” An owner three doors down usually knows whether they sold at a profit or handed the keys back.
FDD Item 20 · FY2025
- 02
81 units transferred to new owners in fiscal 2025. When you look at those, were they people cashing out a good business — or getting out of a bad one?
Transfers count as neutral in every ranking. They are the single easiest place to hide distress.
FDD Item 20 · FY2025
- 03
Of 373 SBA loans to Tropical Smoothie Cafe franchisees that have finished, 10.7% were charged off — the borrower didn't repay. Did you finance with an SBA loan, and how close did your first two years come to trouble?
This is the lender's view of failure, from public federal records, and it is independent of anything the franchisor discloses.
SBA 7(a)/504 loan record, FY1991–present
- 04
Item 7 says the low end to open is $276K, but the average recent SBA loan to a Tropical Smoothie Cafe franchisee was $482K. What did you actually spend to open, all in?
Lenders size loans to real project costs. A large gap between the disclosed floor and what banks actually fund is the most common way buyers get underfunded.
FDD Item 7 vs SBA approvals FY2020+
- 05
You pay 6.0% royalty on gross sales, plus the ad fund, before any of your own costs. On your actual revenue last year, what did you take home as the owner — not revenue, take-home?
Royalty is charged on sales, not profit. This is the number the brochure never shows and the one your life actually runs on.
FDD Item 6
- 06
Tropical Smoothie Cafe makes an earnings claim in Item 19. Does your unit look like that number — and do you know which units they included to build it?
Item 19 is legal to build from a flattering subset. Ask whether they excluded new units, closed units, or company stores.
FDD Item 19 · 2026
- 07
How many months did it take to cover your own costs, and how much cash did you burn getting there?
Ramp-to-breakeven working capital is the most underestimated line in any franchise purchase, and the most common reason otherwise-good units fail.
Not disclosed in any FDD — ask an owner
- 08
Item 3 discloses 2 legal matters. Do you know what those were about, and were any brought by franchisees?
Franchisee-brought suits over territory, fees or support tell you how the franchisor behaves when there's a disagreement.
FDD Item 3 · 2026
- 09
What does the franchisor charge for that you didn't expect — required tech fees, mandatory remodels, approved-supplier pricing?
Required spending appears across Items 6, 8 and 11 rather than in one place, so buyers routinely miss the total.
FDD Items 6, 8, 11
- 10
If your agreement came up for renewal tomorrow at current terms, would you sign again?
The single most predictive question you can ask. A hesitation is the answer.
Ask every owner you speak to
- 11
Who else should I call — including someone who left?
The franchisor's list is curated by definition. Former franchisees are where the unflattering truth lives, and current owners usually know how to reach them.
Ask every owner you speak to
Want this as a checklist you can take to the calls?
I'll email you the printable version, and tell you if Tropical Smoothie Cafe’s numbers move — a new filing, a rising exit rate, a distress signal. Unsubscribe in one click.
A broker is paid by the franchisor to place you. I'm paid by you — and the job is pressure-testing Tropical Smoothie Cafe's numbers, including talking you out of a bad deal.
This page is what buyers see before they call you for validation. If the record above is wrong — or right in a way the numbers can't show — say so. Corrections are checked against the filings; nothing you write is published with your name unless you agree to it.
Tropical Smoothie Cafe franchise questions, answered from the filings
What percentage of Tropical Smoothie Cafe franchises closed last year?
In Tropical Smoothie Cafe's latest FDD Item 20 (fiscal 2025), 34 of 1,514 franchised outlets left the system — an annualized exit rate of 2.2% — compared with 8.2% across 146 food & dining systems tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a Tropical Smoothie Cafe franchise cost?
Per Tropical Smoothie Cafe's 2026 FDD, buying in requires an initial franchise fee of $35K (Item 5) and a total initial investment of $276K–$771K (Item 7).
What royalty does Tropical Smoothie Cafe charge?
Tropical Smoothie Cafe charges an ongoing royalty of 6.0% of gross sales, per Item 6 of its 2026 FDD.
Does Tropical Smoothie Cafe disclose earnings (Item 19)?
Yes — Tropical Smoothie Cafe makes a financial performance representation in Item 19 of its 2026 FDD, reporting a median unit volume of $931K. Read it closely: franchisors choose which units and which metrics to include.
How often do SBA loans for Tropical Smoothie Cafe franchises default?
Across 677 SBA-backed loans to Tropical Smoothie Cafe franchisees since 2002, 40 of the 373 that have resolved were charged off — a 10.7% default rate, versus about 14.8% across all rated franchise brands. This is the lender's-eye view of franchisee failure, drawn from public SBA 7(a)/504 FOIA data and independent of the franchisor's own disclosures.