Franchisel.com — FDD Diligence Memo
Tropical Smoothie Cafe
Generated 2026-04-06 · 2024 FDD · Government-filed source
Tropical Smoothie Cafe
2024 FDD Diligence Memo
Composite score based on six FDD-derived dimensions.
Sys Health
9
Fin Strength
5
Contract
6
Red Flags & Key Signals
Double-digit active lawsuits is unusual. Review whether franchisee-initiated cases dominate (signals system dissatisfaction) vs regulatory actions.
After leaving the franchise, you cannot operate a competing business in this radius. Evaluate the real-world impact on your exit options.
Franchisor is not obligated to protect your market area. Encroachment from company-owned units or other franchisees is possible.
Avg $1,737,553 from government-filed FDD. Transparent disclosure is a positive signal.
Franchisor financial statements are audited with no going concern warning.
Investment Overview
Items 5, 6, 7Total investment range: Not disclosed. Initial fee: $0. Royalty: —. Marketing fund: —.
Item 19 — Revenue
Item 19 — 2024 FDD (government-filed)Item 19 discloses avg revenue of $1,737,553 (Annual).
Sample: WeakThe FDD does not specify how many units were included in this figure.
Item 20 — System Health
Item 20 — 2024 FDDSystem growing — net +143 units in reporting period.
↑ GrowingStrong expansion: 0 opened vs 0 closed/transferred.
Total Units
0
Net Growth
+143
Turnover
0%
Year-over-Year Trends
2024 FDDOpened
+0
Closed
-0
Net
+143
Prior-year Item 19 revenue data not available. Unit data above covers the reporting period in the 2024 FDD.
Key Contract Terms
Item 17Item 19 Data Quality Flags
Item 19Revenue type unclear
The FDD does not clearly specify whether figures are gross sales, net sales, or a profit metric. This limits comparability.
Profit not disclosed
Item 19 reports revenue only. No expense breakdown is provided. Profit cannot be determined from this disclosure alone.
All units included
Revenue figure includes all reporting units — broadest, most conservative sample basis.
Sample size not specified
The FDD does not state how many units contributed to this figure.
Data from 2024
Revenue covers 2024 — 2 years old. Reasonably current but worth confirming recent trends with existing franchisees.
Medium extraction confidence
Revenue figure extracted with medium confidence. Cross-check with source FDD before relying on this number.
Franchisee Interview Questions
Item 20 contactsUse Item 20 to get current franchisee contact info. Call at least 3-5. Ask these questions:
The agreement includes a 2-year, 5-mile post-termination non-compete. Ask franchisees: did you fully understand this when you signed — and do you feel it's fair?
Look for: Whether franchisees feel trapped. High non-compete terms reduce exit flexibility.
Cure period is only 10 days. Ask: have you ever received a default notice? How did the franchisor handle it — were they reasonable?
Look for: A short cure period combined with aggressive enforcement is a serious risk. Look for franchisees who feel supported vs. managed by threat.
How responsive is your franchisor rep — do they actually help when you have a problem, or are they just checking boxes?
Look for: Specific stories (not just vague positives). Ask about a time they needed help urgently — response time matters.
If you decided to sell your franchise tomorrow, how easy would that be? Has the franchisor ever blocked or delayed a transfer you wanted?
Look for: Transfer fee surprises, right-of-first-refusal complications, or franchisor demanding upgrades before approving a sale.
What did your revenue look like in year 1 vs. year 2 vs. now? When did you reach breakeven?
Look for: Year 1 revenue is typically well below Item 19 averages (which often exclude ramp-up units). Expect 12-24 months to reach average.
What did the training actually cover vs. what you needed on day 1? What do you wish you'd learned before opening?
Look for: Gap between training content and operational reality. New franchisees often report the training covered theory but not real-world situations.
Territory — Item 12
NO exclusive territory — encroachment risk exists; franchisor reserves online/ecommerce sales.
Item 12 · 2024 FDD
Data sources: 2024 Franchise Disclosure Document filed with a state franchise regulator (government record). Source: Extracted from 2024 FDD filed with MN CARDS (file #11356). Source: 11356-2024.pdf. · Payback estimates and margin assumptions are editorial — not from the FDD. This memo does not constitute legal or financial advice. Consult a franchise attorney and accountant before signing. Generated 2026-04-06 by Franchisel.com.