Smoothie King franchisee oversees small empire of Gulf Coast stores

Lorraine Pater has traded spreadsheets for smoothies.

The Smoothie King franchisee — whose background is as a CPA — recently bought her 11th store on the Gulf Coast, a location in Hillsborough County's Valrico. 

And she plans to continue expanding her portfolio, which is primarily in the Sarasota-Manatee area; she owns rights to a 12th location, in Parrish in north Manatee County, and says she is open to new opportunities as they present themselves. Right now, development and construction costs — up more than 70% year-over-year, she says in one case — are one of her biggest hurdles to growth.

Pater's small empire of Smoothie Kings is exceptional for a few reasons. For one, according to Smoothie King, the average number of stores per multi-unit franchisee in the Smoothie King system, the company says, is 4.15. With 11, Pater has nearly three times that benchmark in her portfolio. 

In addition, three of Pater's locations are in the top 15% of Smoothie King franchises based on sales — an accolade she attributes to the stores’ locations as well as the team. The high-grossing locations are on Manatee Avenue in Bradenton, Fruitville Road in Sarasota and West Alexander Street in Plant City.

“It starts with the team members that are just prepping the stuff — everything has to be ready to go,” Pater says. “Everybody has a job to do, and if it doesn’t get done, then we can’t be successful. The manager has to be great at staying on top of everybody. The team members have to be giving the best service. Everybody has to work as a group to make it successful, and I think they’re doing a really good job.”

The average unit volume for the top 50% of Smoothie King locations is $826,987, according to the Texas-based company. Pater's store at 3816 Manatee Ave. in Bradenton, near St. Stephen’s Episcopal School, has surpassed $1 million in sales for each of the past three years, according to Pater. The Plant City Smoothie King is also on track to pass $1 million this year, she adds.

Elissa Wilton, operations consultant for Smoothie King, says that with 11 locations, Pater is the largest franchisee in her territory, which includes 63 stores in western and central Florida. The average multi-unit operator in her territory has two to three stores.

There are a few things that make successful operators, according to Wilton, who says Pater has mastered them. Franchisees need to have “passion for their stores and for their team and their guests,” she says. And “they need to be there. It's not something that you can do hands-off. Lorraine is in her stores regularly. I will see her bouncing from store to store, which is fantastic … She cares about her stores, and she wants to know that they're running the right way.”

In addition, Wilton says, having different levels of management is key while growing the business.

Team building

Across all 11 stores, Pater has 115 employees, including two general managers who oversee multiple locations. One of them has been with the company for several years, after being hired for an event, then working in the store and eventually overseeing it.

It has taken time to get to this point, says Pater, who bought her first Smoothie King 10 years ago. 

“When we only had a few stores, it was actually scarier to have a manager leave or decide to go somewhere else or move,” Pater says, because the team would have to fill the position.

“Now that we have such a good infrastructure, and we've done it so many times,” she continues, “we know what we’re looking for.”

For a store manager, the goal is to have someone who is a “nice, friendly person” who can learn how to make smoothies and handle scheduling and ordering. They are “in charge of their own little team and have a little family unit in their individual stores,” Pater says. 

“Our preferred way” to hire a manager is to help them grow from within, Pater says, adding: “But we're also not scared to now go outside.”

Hiring has ebbed and flowed, she says, with at some points in the past just a couple of applicants applying for jobs. 

“Right now it's a little bit easier to hire,” she says. “There's a lot of people looking for jobs,” which means the business can do multiple rounds of interviews and be more selective.

Finance smarts

Pater, going back to being a CPA, does payroll every week, which she says helps her stay connected to the 11 stores in her portfolio, since she can’t physically be in all of them.

“It kind of keeps me engaged in every store, lets me know what's going on,” Pater says. “I can see the trends,” from staffing patterns to bottom-line shifts, while handling bookkeeping.

For example, one week, the weather may have been terrible and “nobody wanted to get out of the car to walk in” to the store, resulting in less business, she says.

Margins are a “little tighter than they used to be,” Pater says, as the cost of goods, rent and payroll increases every year. “But you can’t increase the price of the smoothie … that much, or people would probably stop coming in.”

Photo by Mark Wemple

Pater used to be an auditor for global firm KPMG. After having her children, she says, she wanted to focus on raising them so she left her CPA job. When her girls hit middle school and didn’t need her as much, she and her husband, an entrepreneur, looked into buying a franchise. They landed on Smoothie King, which the family was patronizing daily.

“I eat the toast for breakfast in the morning and a smoothie for lunch,” Pater says. “It just kind of fit into our lifestyle, and … it’s a good business model.” 

The average check is about $11, she tells the Business Observer, and customers range from children to older adults to those seeking a healthy lifestyle. On the menu are special options for those on the keto diet and GLP-1 medications.

Starting June 23, Smoothie King stores nationwide added more to their offerings, like flatbreads and chicken bites. Over the years, the company has also expanded on its foundation of fruit-filled drinks with menu items like bowls and avocado toast.

“You're just trying to get a new person to come in the door,” Pater says.

Next stop

As the owner of 11 stores with rights to a 12th location, Pater says she does not have a target number of Smoothie Kings she’d like to have in her portfolio.

“We are always looking for another store owner that would like to sell and makes sense for us,” she says.

One obstacle when it comes to building new stores is the cost of construction.

When Pater first started out with Smoothie King in 2016, it was $250,000 to open a store. Now it can be anywhere from $450,000 to $750,000, she says.

An example of the increase: It cost $460,000 to build the Smoothie King store on Heritage Green Way off State Road 64 in Manatee County last April, she says.

“We own the rights for the Parrish location” and are currently looking for the right spot, Pater says. But while new builds are plentiful in Parrish, “You can't even find them,” she says. “They're already taken.”

And currently, her business is priced out of the market.

“There are so many developments going in, but the rent is insane,” Pater says. The cost for a new build is “like $80 a square foot,” she adds, compared with $22 a square foot 20 years ago or $46 a square foot, which is how much it cost to build the store off State Road 64 last year.

“You can't have a Smoothie King model selling smoothies and paying $80 a square foot,” says Pater. “Right now, the pricing is not acceptable for this model.”