Two years into Blackstone’s ownership of Tropical Smoothie Cafe, the chain is well on its way to reaching 1,800 units.
Tropical Smoothie Cafe hasn’t just accelerated its unit growth, the chain is also investing in operational improvements and innovative marketing.
The brand has spent a lot of time figuring out who its guests are and how they are impacted by today’s dynamic macroeconomic environment. Tropical Smoothie Cafe has put significant investments into marketing, operations, and digital and technology, as well, CEO Max Wetzel said.
Its latest strategies are paying off. Brand awareness is up by 19% year over year, while sales rose 10% in Q1 compared to the year-ago quarter. Loyalty memberships increased by 25% year over year, reaching 12 million, according to emailed figures from the company.
“We’re making good progress,” Wetzel said. “It’s been a really great run here for the last couple of years.”
Strong franchisee economics
Tropical Smoothie Cafe opened 165 cafes last year and is on track to open 175 this year, including its 1,800th cafe, Wetzel said. The chain has a flexible real estate format and has inline, end caps and a handful of free standing drive-thrus, Wetzel said, adding that the chain’s “bread and butter” is inline locations.
“Development is fueled by franchisee economics,” Wetzel said. “We’re really focused on driving sales growth within each cafe and then equipping our franchisees with the data and the analytics that they need to make sure that they’re continuing to run a great business.”
The company has 900 agreements for additional cafes to open after 2026, Wetzel said, and strong interest within its franchise base to open new restaurants. The chain is attracting multi-unit, multi-brand franchisees that come into the system with their own operational capabilities that benefit the brand, Wetzel said.
He highlighted Tropical Smoothie Cafe’s mature development capabilities and experienced real estate, construction and franchisee support teams as strengths aiding its development.
“We sit next to our franchisees and we work all the way through the funnel with them, supporting them along the way,” Wetzel said.
The chain could probably open more than its yearly targets, but management maintains a disciplined pipeline to ensure that its cafes perform well in each zip code, Wetzel said.
The brand also focuses on density, which helps drive availability for consumers and build awareness that then leads to sales, Wetzel said. Detroit, for example, is one of Tropical Smoothie Cafe’s largest markets, with more than 70 cafes. Detroit has high guest frequency because of this density, and the region’s unit volumes are in the top quartile for performance, he added.
“All those things give us information to make sure that we're deploying it in the right way as we build new markets into more established markets, into more mature markets, and we've been doing it for 25 years, and we've learned a lot through that experience,” he said.
Streamlining operations
The chain has a fairly streamlined kitchen with three menu categories: smoothies, bowls and food.
During the first quarter, Tropical Smoothie Cafe began an initiative called Smooth Operator to reset its food and bowl makelines to improve quality, speed and accuracy, and “franchisees are really excited about it,” Wetzel said.
“One of the operational challenges we had is that we were great at making smoothies, and we could make them really fast, but food just took a little bit longer,” Wetzel said.
During peak hours, like lunch, the food line would slow down operations. As part of the initiative, management took a holistic view of the makeline and made changes to product builds so operations move more linearly, Wetzel said. Tropical Smoothie Cafe moved equipment around and optimized equipment to get food out faster, he added.
“[The] quality of the food's actually better, and we're improving accuracy because everything's coming to the finish line at the same time,” Wetzel said. “It’s been a win, win, win.”
As of late June, Smooth Operator was live in 120 cafes and is expected to be implemented across the system through the rest of the year.
Maintaining a robust food menu
Unlike other beverage and smoothie chains, like Smoothie King and Juice it Up, that have been adding food items to their menus over the past few years, Tropical Smoothie Cafe has offered food since its first cafe opened in 1997, Wetzel said. It has long had its supply chain, back of house and cafes organized around food, he added.
“[Food] is really one of our differentiators,” he said, adding that the chain sells quesadillas, flatbreads and wraps.
Tropical Smoothie Cafe has a robust stage-gate process for testing new menu items and spends considerable time with its core consumers, which it calls Crave-Health-Balancers, to ensure that the chain’s menu innovation results in also craveable, healthy menu items, rather than products tied solely to novelty, Wetzel said.
Menu innovation so far this year included protein smoothies with Chobani, which the chain offered in January and February. In March and April, it served Tropiboba Bowls, and in May it permanently added toasted snack rolls.
“It shows you the flexibility within our menu to bring relevant innovation that is delivering against where consumers are going: global flavors, protein, snacking,” Wetzel said. “Those are the insights that drive some of the innovation we've already launched. We've got a lot more that we'll be rolling out as we move through this year and next year.”
Boosting brand awareness and digital penetration
At the end of 2024, the chain’s franchisees supported an effort to combine marketing dollars in a national marketing fund, Wetzel said. At the back half of 2025, Tropical Smoothie Cafe began deploying this new marketing model, which has resulted in more efficient marketing campaigns that are resonating better with guests.
With the March launch of its Tropiboba Bowls, Tropical Smoothie Cafe launched its Eat More Good campaign to talk about what makes the chain different.
“We’re seeing a rapid increase in brand awareness,” Wetzel said, adding that as guests become more aware of the brand, they have high repeat rates and eventually turn into high-loyalty guests.
The chain’s 12 million loyalty members make up about a third of its sales, Wetzel said. Having this level of penetration helps Tropical Smoothie provide a more personalized experience, he added.
Earlier this year, Tropical Smoothie Cafe added a Tropic Mode to its loyalty program for its most loyal guests to provide them with more benefits, he added. The brand leans into “discounting strategically,” Wetzel said.
“We're driving amazing frequency through our loyalty program, so we aren't seeing that slow down,” Wetzel said. “We're on a path to 50%-plus of our sales coming through our loyalty program in the next year.”
Another area of focus is Tropical Smoothie Cafe’s digital business, which accounts for 40% orders. One in five guests order delivery and one in five order on the app and pick up in store, Wetzel said.
The chain will continue to invest in digital and will roll out a new front-end guest experience with its app and web ordering later this year. There will be more customization, for example, he said.
“Guests can curate and spend a little bit more time navigating our menu and finding exactly what they want,” Wetzel said. “It's clear to me that the brands that are winning are the ones that are focused on convenience and focused on these emerging channels, which are no longer emerging, they're core to the brand.”
