Shopping Center Business

MAY 2017

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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RETAIL REVIEW 74 • SHOPPING CENTER BUSINESS • May 2017 W hen CEO Mike Rotondo took the reins in 2012, Tropical Smoothie Cafe operated ap- proximately 225 units. Working with BIP Capital, which had invested in the brand in 2010 to spur growth, that number is now 561 units today. Last year the compa- ny opened 86 new locations — including its milestone 500th. NEW MARKETS "It was a big event for us," Rotondo says of the 500th cafe that opened last June in Westland, Michigan. "I think it was anoth- er eye opener because people think of it as a southeastern concept or a warm climate concept, but we're successful in North Dakota, Michigan, Long Island, Indiana. Actually, Michigan is one of our top suc- cess markets. By the end of the year there will be at least 65 cafes in Michigan." (Its 50th location in the state just opened in March in Portage, Michigan.) This year, Tropical Smoothie Cafe plans to open at least 100 new restaurants, with a major push in Texas and Califor- nia. Both are relatively new markets for the Atlanta-based brand. Rotondo says it had some presence in Texas prior to 2017 but now is "coming on strong" in the Lone Star State. "We're pushing hard in Texas right now," Rotondo says. "We've opened up in El Paso, Lubbock, Brownsville and Padre Island. We have cafes in Dallas as well, but we really broke into these secondary and even tertiary markets in Texas, and they are just crushing it." California is another focus. "We have finally broken through in California," says Rotondo. "We're up to roughly 10 loca- tions in the Orange County area." As it has done since inception, Tropi- cal Smoothie Cafe grows by franchising. With only one corporate store and the rest 100 percent franchised, it's a model that has worked for the brand since 1997. The original founders, Eric Jenrich and David Walker, aggressively sold area de- veloper territories to help them advance the brand. With this strategy, the fledgling operation achieved positive growth. Also to advance the brand, the founders began to sell food to accompany its award-win- ning smoothies. It wasn't until 2009-2010, however — during a recession — when food really became a focus. And yet, even with a focus on food, smoothies remain 60 percent of the company's sales. "People love our smoothies," says Ro- Tropical Smoothie Evolves As Tropical Smoothie Cafe turns 20, the milestone is marked by steady growth, a new prototype, and dedication to digital technology. Katie Lee The new design of Tropical Smoothie Cafe is like a "beachy Restoration Hardware," says CEO Mike Rotondo.

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