Jamba Juice is contributing to the nation-wide smoothie craze with their refreshing, flavorful blends, and their stores are popping up everywhere. In this case study, we will go through the inspiring story behind the fruity franchise, breakdown the FDD, and go through the reasons why you hop on the smoothie trend.
Jamba Juice Franchise History
With hundreds of locations across the country, Jamba Juice is one of the most popularly recognized smoothie restaurants today. Considering the national-level attention the franchise has received over time, it’s inspiring to learn that the popular franchise began as a college student’s senior year project.
Before the Jamba Juice company was formed, it was created as Kirk Perron’s senior project at California Polytechnic State University. Perron, a cyclist, and healthy-lifestyle advocate founded the company on March 31, 1990, with three friends: Kevin Peters, Joe Vergara, and Linda Ozawa Olds. The first location was opened in San Luis Obispo, California, which is where Jamba Juice was incorporated. Within the first weekend after opening, more than 2,600 customers walked into Jamba Juice.
Jamba Juice grew in popularity steadily over the years, especially as the popular lifestyle culture began to gravitate towards health and fitness. In 2001, Jamba Juice acquired all Zuka Juice stores and became the most prominent smoothie company at the time. Jamba Juice expanded across the country and opened its first New York location at Columbus Circle.
As more locations opened, Jamba Juice expanded its product, offering both smoothies and juices. In 2007, the company partnered with Nestle, creating ready-to-drink products.
More recently, a smoothie and juice products have grown in popularity, Jamba Juice has stayed on trend, beginning to offer healthy food options at its locations. The company has even introduced vegan food options, contemporary decor, and wall art.
Why Own a Jamba Juice?
Owning a Jamba Juice franchise means investing in healthy living. Besides the brand’s inspiring story of where it originated and how it has expanded all over the country, there are plenty of other reasons to consider joining Jamba Juice on its road to further success.
1. It’s a Simple Business
The only appliances in the store are blenders and a combo refrigerator/freezer. No need to stress about hoods, stoves, or grills, you only have to enjoy the stability and revenues under this fast-casual business model.
2. World Class Support Team
Over the past couple of years, Jamba Juice has spent time forming a Franchise Support Center in order to provide better support to the franchisee owners. They understand it’s a major undertaking making the switch to owning a franchise, which is why Jamba Juice provides support from all of their teams: real estate, construction, supply chain team, finance, marketing department, and operations team.
The company wants to make sure all franchisees are comfortable and as prepared as possible, which is why they offer required initial and ongoing training. Those who are responsible for operating the store must complete both in store and online instruction. The online training is part of the Jamba Juice franchise’s computer-based training (CBT). In regards to in-store, each location must be under the direct supervision of an employee that has completed all training programs. Managing Owners and General Managers for the Jamba Juice location must complete a total of 18 hours of CBT and 68 hours of on-the-job training.
3. A Product To Be Proud Of
The process of creating Jamba Juice’s iconic, delicious blends did not happen overnight. Consumers should be getting the best version of a product possible, which is why Jamba Juice collaborates with franchisees and consumers to constantly blend and test new smoothies and juices. Product innovation is vital to Jamba Juice’s business strategy and growing the market share for franchise owners, as well as keeping customers interested in what they have to offer.
4. A Place for Philanthropy
Giving a consumer a stellar product and making money is one thing, but feeling fulfilled in the business you are creating is just as important as the wealth. Jamba Juice is passionate about partnering with franchisees who value the idea of helping their local communities live a healthier life. A drive to give back is a necessary quality Jamba Juice looks for in their owners.
5. Different Business Models to Grow With
There are three types of business models franchisees can choose to pursue: traditional, non-traditional, and drive-thru. Non-traditional business models are reserved for those who already own a location and are kiosks meant for places like airports, stadiums, convention centers and a variety of other venues. The traditional model is a new prototype store and upcoming franchisees will be the first to test it out. This model includes state-of-the-art technology, bright colors, modern seating and inspirational designs, everything that customers love about Jamba Juice. In this day in age where people are always on-the-go, the drive-thru model is becoming more common, and the ideal model for entrepreneurs. Jamba Juice introduced a 1,200 to 1,500 square foot end-cap store to increase visibility for higher traffic and appeal to this particular customer base.
Initial Franchise Fee: $35,000
The Initial Franchise Fee for a Jamba Juice Franchise varies according to the number of stores the franchisee wishes to purchase. With only one store, the franchise fee is $35,000. For two stores, the fee totals $65,000. For three stores, the Initial Fee is $85,000. Finally, for four stores, the total Initial Franchise Fee totals $100,000.
For non-traditional stores located anywhere aside from a mall or grocery store, the prospective franchisee must pay an Initial Fee of $10,000.
Royalty Fees: 6.0%
The royalty fee is an ongoing payment from franchisees to Jamba Juice, and it is calculated as a percentage of gross sales. The fee is to be paid on the 15th day at the end of each specified accounting period.
Estimated Initial Investment Range: $273,600 – $504,300
For a traditional store, the startup costs include real estate and leasehold improvements, equipment, computer system, training, insurance, and signage, to name a few. Opening a non-traditional store, after already owning a previous business, is a lower overall investment range of $251,600 – $458,600.
|Name of Fee||Low||High|
|Initial Franchise Fee||$35,000||–|
|Real Estate and Leasehold Improvements||$101,000||$180,000|
|Location Selection Services||$5,000||–|
|Furniture and Fixtures||$15,000||$30,000|
|Computer System (Includes Point of Sale System and Software)||$8,500||$17,500|
|Grand Opening Advertising||$10,000||–|
|Miscellaneious Costs to Begin Operations||$9,000||$14,000|
|Additional Funds-3 months||$10,000||$20,000|
Revenue Range: $100,409 – $1,659,390
Every Jamba Juice location differs in the average net sales they make, however, Jamba Juice provides a range of what the highest and lowest net sales for franchised, traditional stores in 2018. For non-traditional franchises, the revenue range is $105,215 – $949,014.
This franchise opportunity emulates the entrepreneurial experience: it only takes one idea, in this case, a school project, to make it big. If this is motivating to you, then you might want to join the Jamba Juice team.