Operations

How Tropical Smoothie pulled off record-breaking year during COVID-19

While the pandemic destroyed thousands of restaurants last year, Atlanta-based Tropical Smoothie Cafe had one of its best years to date. It posted its ninth consecutive year of positive same-store sales, with 2020 same-stores up 7.5%. Here's how CEO Charles Watson did it.

Provided

January 13, 2021

While the pandemic destroyed many restaurants last year, Atlanta-based Tropical Smoothie Cafe had one of its best years to date. It posted its ninth consecutive year of positive same-store sales, with 2020 same-store sales up 7.5%. The brand opened 99 cafes, including its 900th location in Fort Benning, Georgia, and signed 254 franchise agreements, 70% of which came from existing franchisees. It's on track to reach more than 1,000 operating restaurants in 2021.

"Our success is directly related to the passion and dedication of our franchisees, crews and Support Center teams," CEO Charles Watson, said in a company press release. "As I look back on this past year, I'm incredibly proud of how this brand thrived during difficult circumstances and times.

In response to the pandemic's effects on operations and the guest experience, Tropical Smoothie Cafe pivoted early and prioritized supporting its franchisees as well as the communities in which they operate. The brand offered 50% royalty relief for eight weeks, for example, and supported franchisees in securing more than $29 million in PPP funds across the system and $1.8 million in rent relief for approximately 250 cafes, Watson said.

Franchisees also benefitted from guests' rapid adoption of curbside and delivery platforms, which led to a quick rebound in sales. The relaunch of the Tropical Smoothie Cafe mobile app contributed to this success, adding convenience and loyalty to the guest experience and fueled strong digital sales growth from 24% pre-pandemic to 35% currently.

At the onset of the pandemic, the company furthered its commitment to its communities through a nationwide "#InThisTogether" campaign in April 2020, and a second campaign was launched on Giving Tuesday whereby franchisees supported local essential workers and first responders. To date, the brand has donated 250,000 smoothies nationwide, as well as $125,000 to the American Nurses Foundation.

"The last 10 months have impacted us all and I'm so incredibly proud of the selflessness of our franchisees and the entire Support Center as we gave back to those putting their lives on the line to keep everyone safe and healthy," said Watson. "Experiencing the joy that Tropical Smoothie Cafe brought to essential workers and first responders will be a lasting memory of this challenging time."

Tropical Smoothie Cafe also launched a campaign called Tropic Tim e which defined the brand's story and helped it better connect with consumers and unite franchisees. Additionally, the company revised its menu strategy, and the innovation team implemented changes to both the core and limited time offering menu items.

A major redesign and restructure of the core menu launched in July delivered easier navigation, improved guest experience and more consistent execution — all while decreasing food cost, increasing add-ons and growing combo take-rate, Watson said. Similarly, LTOs such as the limited roll out of the SORBOS edible straw which reinforces the brand's commitment to innovation, delivered record numbers for the brand. As Tropical Smoothie Cafe looks forward to 2021, it has already committed to new proteins like shrimp, as well as new platforms designed to increase reach and frequency among guests.

"As we look to the future, and the more than 600 new cafes in our opening pipeline, I am confident we have the focus, tools and teams to continue the tremendous growth this next year and beyond," Watson said.