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Franklin Township Smoothie King Franchise Goes Down

"Warrant of Removal" Seen in Window, as All Equipment, Counters, and Display Cases Remain In Store
Smoothie King in Somerset, seen here, was closed "for the season" during winter but is shuttered as legal docket in window says. Dave Schatz

FRANKLIN, NJ–The Smoothie King Franchise in Somerset at Franklin Commons Shopping Center was issued a “Warrant of Removal,” by Somerset County, Superior Court of N.J., and is shuttered, according to a docket displayed through the store window.

The landlord, Franklin Commons Retail, LLC, apparently took control of the store last month, possibly locking the doors on the franchise owner, Bill Leitner, of CJ Smoothies LLC, who operated the Smoothie King at 458 Elizabeth Avenue and Schoolhouse Road.

Leitner was given three days to remove all “persons and property” from the store, according to the docket, which says a court officer will remove all persons from the premises on or after March 4, 2016, “If you fail to move within three days.”

The business has been closed for several months; during the winter, a small sign taped inside the door, promised customers the shop would re-open for the new season – which is now. The doors should have been wide open on a sunny, April 1, afternoon with temperatures in the low 70’s.

But operating a franchise can be costly. Smoothie King, being the number one franchise-company in its category, is no exception. Its franchisees are faced with a 6 percent “Ongoing Royalty Fee,” and 2 percent “Ad Royalty Fee,” according to Entrepreneur Magazine.

While royalties are based on a percentage of gross sales volume, the venture was no doubt subject to all the standard costs incurred by small businesses – the greatest usually being a fixed cost – rent, which must be paid regardless of sales volume, all year round.

And, while the initial franchise fee for a Smoothie King unit is $30,000, they are most successful when located in cities with warm climates, according to NJ-based franchise broker, Frank Capaci, who added that Smoothie King is number one in its category.

A privately held Louisiana-area based company, Smoothie King boasts of being established for 28-years and selling its first franchise after about one year. The company ranks number 95 on Entrepreneurs list of the top 500 franchises.

Candidates must have a minimum net worth of $285,000 and at least $90,000 in “liquid cash capital,” to pour into the business in case it doesn’t support itself within the first couple of years of opening. The total initial investment for a Smoothie King runs $181,100 to $422,950, depending on the unit’s size and type of location.

The store is for lease according to a sign in the window. And inside, all the equipment appears to be intact and still installed in its original layout. All counters, sinks, commercial refrigerators, blenders, display cases, and retail shelving units and can be seen through the window. In fact, all inside menu-board signage and customer literature is ready to go.

The shopping center is anchored by a freestanding CVS, and free-standing Chase bank, both with drive-thru windows. Other businesses include a UPS store, Sports Clips, Subway franchise, bakery, liquor store, and a few restaurants.

While Franklin Commons is busy and offers ample parking, its location doesn’t draw a huge amount of foot-traffic, as would a Smoothie King located on a boardwalk, or in a downtown area with a college or university, such as Hub City, with Rutgers University.

Still, the owner did market to the community and promote the business, sometimes giving away free smoothies to area teams and clubs – with coupons of course.

One such promotion was an event in Piscataway’s Johnson Park last year. Leitner personally delivered more than 50 free smoothies to the Raritan Valley Road Runners Club, a Highland Park-based group, on a hot Saturday morning for runners to sample after their club meet-up and run.

A local mail carrier said jokingly that they owed him a smoothie, and remembers Leitner’s mother working the store many times, which was open 14-hours a day during the week, 12-hours on Saturday’s, and 8-hours on Sunday’s.

In addition to tasty fruit-based drinks, the store also sold vitamins, supplements, and nutrition bars. The business was open for about seven years.

Consumers are spending on experiences, such as dining out, going to sporting events, theme parks, and traveling, rather than on retail goods, according to reports. And, in efforts to counteract this trend some retailers have begun creating more immersive environments inside of their stores. 

Leitner, who last year told NBT of his desire to grow the business and open additional units with his brother, who currently operates a Smoothie King in Warren, spoke about how Smoothie King’s formula for making Smoothies engages customers, delivering that “experiential” factor.

“It was fun to go in for a Smoothie with my son on a Saturday afternoon every now and then,” said a local resident. “My favorite is the ‘Berry Carrot Dream’ and we usually brought home a ‘Greek Yogurt Orange Vanilla,’ smoothie for my wife if we were going right home.”

Commenting about new consumer attitudes, this past August, Sarah Quinlan, MasterCard senior vice president and head of Market Insights said: "We value a sense of what's permanent, what we can take with us: memories." 

The job report on April 1 was good, employment reportedly climbed a bit, while wages picked up in March – signs of “labor market durability.” And the labor force participation rate was up slightly. But automobile sales slowed down some, and apparel sales remained as weak as they have for the past several months.

Smoothie King has over 650 locations in the United States, the Republic of Korea, Singapore and the Caymans, according to its website. The company could not be immediately reached for comment outside of regular business hours.