In a recent interview with Bloomberg Radio, Tropical Smoothie Cafe CEO, Charles Watson shared insights and strategies that helped power strong Q3 franchise growth and sales for the award-winning brand.
Bloomberg interview highlights the way Tropical Smoothie Cafe has adapted to meet new demands
Franchising is an industry driven by self-starters and quick-thinkers, so it’s no surprise that top brands are going the distance to support their Franchise Owners to keep the lights on during the economic roller-coaster ride that is COVID-19. Watson’s frank discussion with Bloomberg Radio highlights the brand’s ability to pivot, adapt and innovate throughout the challenges of 2020.
Reaching guests in a pandemic: digital is key
By embracing accelerated technology—such as a new mobile app and online ordering—to enhanced digital offerings, Tropical Smoothie Cafe has increased guest access and convenience while keeping guests and employees safe. “We bottomed out in April,” said Watson, “and climbed back up the sales ladder in May, and we went positive comp sales to the tune of 12% in June. Digital is a huge factor in our steady sales” Watson noted that by shifting business focus to convenience and the ability of guests to access fresh, healthy menu options through multiple channels and third-party delivery service has helped boost revenue.
According to Watson: “We’re in a very, very good position. Our franchisees are cash flow positive. Many of our franchisees are having a fantastic year.”
A top franchise built on great support for Franchise Owners
One of the reasons people choose franchising is because it offers both freedom and security. Franchise Owners essentially get to own their own business without being completely on their own. Tropical Smoothie Cafe has always gone above and beyond to support its Franchise Owners, and this year is no different. Bloomberg Radio co-anchor of “Bloomberg Markets” Vonnie Quinn asked Watson what leadership was doing to help Franchise Owners survive and thrive in one of the most challenging periods in the fast-casual concept industry.
How our Franchise Development Team adapted
“We’ve done a lot of work working with our franchisees in concert to aid them,” Watson said. With the help of PPP loans, he continued, “our franchise development team and our real estate team really turned into PPP and rental negotiation folks there for about three months.”
By shifting priorities to support Franchise Owners, the brand is strengthened and puts Tropical Smoothie Cafe in a solid position for growth. Watson noted that, “So now that we’ve come out of it, (we) are not having any rental rate issues or any default issues, because the business has bounced back and the franchisees are cash flowing.” Another positive sign? Watson says Tropical Smoothie Cafe doesn’t require any additional PPP funding.
Making the opportunity happen
Watson noted that one of the surprising real estate challenges spawned by COVID was getting landlords to the table to sign leases for new locations .
“We’ve opened 80 restaurants so far this year, and we sold almost 200 franchises…for new development restaurants, we have a pipeline of over 500 (and) it’s actually getting the landlords attention on doing new deals, because they are spending so much time working out with existing tenants.”
Ready to meet future challenges head-on
Quinn then asked Watson about the brand’s preparation in case of another COVID-related shutdown. Watson didn’t hesitate, saying “We are ready for it… we can maintain and continue to move the business forward. Not only has our company’s quick pivot to digital kept us afloat during the pandemic, it’s also created a new long-term source of revenue.” Watson said he didn’t wish another lockdown on anyone but believes that “we can weather the storm much, much better based on the past six months of work we’ve done as a brand.” It’s that can-do spirt and willingness to adapt that makes our Cafes such a solid franchise opportunity during COVID and beyond.
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