“Eating for pleasure is something people don’t have to be guilty with.” This is what the Acai bowl company, Playa Bowls, believes in. With 23 company owned restaurants and 73 franchised run locations nationwide, this 6-year-old New Jersey Original Acai Shop has been serving people with their different creamy concoctions of some of the healthiest ingredients on Earth!

“A slice of summer, anytime” is served in a bowl filled with superfruit goodness. Their menu features acai bowls, chia pudding bowls, oatmeal bowls, coconut bowls, smoothies, and many more. Sounds like something that can brighten up anyone’s day, right?

But is the cost to invest in a Playa Bowls still worth it? You’ll need to invest $168,675 to $435,058 and secure at least $35,000 for the initial franchise fee. In addition, you’ll need $10,000 to $40,000 worth of working capital to qualify. According to reports, a Playa Bowl franchisee may earn up to $2,400,00 in a year with a healthy profit margin of $1.25 million. Those are impressive sales claims, but are they legit?

In this guide, I evaluate if the Playa Bowls Franchise is actually worth investing in. Take our 7-minute franchise quiz to get matched with the correct opportunity based on your finances and experiences. 

Financial Requirements and Fees

If you plan to become a franchisor, the next step that comes after saving enough to invest is properly allocating your money to the fees that you need to pay to operate a franchise. The table below shows the liquid capital, net worth, total investments, franchise fee, and other ongoing fees to take note of. 

• Liquid capital refers to the entire amount of cash you will need on hand and is available to use at any time.
• Net worth refers to the value of all your non-financial and financial assets minus the value of all your outstanding liabilities.
• Total investment is the total capital or the total money you will need to put into the franchise over time to get it up and running.
• Lastly, franchise fee refers to the amount you must pay to the franchisor to use its brand and resources. 

Other than the mentioned fees, you also have to take care of the Royalty fee covering 6% of the gross sales and the Brand Development fee, which is worth 1% of the gross sales. Make sure you’re okay with paying a total of 7% off these combined fees. 

As you can see, you need to pay $35,000 to have the right to operate a Playa Bowls Franchise, but if you have come to love the opportunity in this business and have signed the Multi-Unit Development Agreement, you may save up to 50% of the initial franchise fees in every additional restaurant you will develop. The Franchise Agreement lasts for 10 years. Good news!  You may always renew it for another 10 years after the first contract is done.

How Much Profit Does A Playa Bowls Franchisee Make Per Year?

Summer everyday at Playa Bowls!

The Playa Bowls is a summer-themed smoothie business that serves its customers with super fruit goodness in a bowl or in a cup. To achieve the “a slice of summer, anytime” treat, only the freshest, highest quality are concocted for the customers. With this expense, a franchisee may earn a 40% gross margin. The average gross revenue per store is $495,918. From this income, a franchisee can earn an annual profit of $198,912.

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The upside is also present with this business. In 2020, one of the Playa Bowl franchises earned up to $3,650,000. Subtracting the $1,250,000 worth of expense, its franchisee earned a profit of $2,400,000 which is over 60% profit margin. These are exciting revenue numbers for a franchise food businesses. 

Who Owns Playa Bowls?

Founders of Playa Bowls.

Robert Giuliani and Abby Taylor, both long-time surfers, founded Playa Bowls in New Jersey in 2016. After touring exotic surfing towns, they decided to reproduce the acai and pitaya bowls they had sampled and put their own touch on them. They started their personalized acai bowl shop and smoothie business with a makeshift popup stand. Six years later, they have grown as one of the fastest-growing small chains with over 120 stores nationwide.

What is Playa Bowls Valued At?

As of 2021, Playa Bowls is valued at $65 million after gaining over 120 stores across the United States. Its franchisees have been crucial to the success of the company as 80% of them signed the multi-unit development agreement and operated numerous branches.

The company also welcomed a majority investment from Tamarix Equity Partners and Pacific General Holdings at 60/40 split. With this opportunity, Taylor and Giuliani look forward to growing up to 500 stores by 2024.

SWOT Analysis: Things You Need to know about Playa Bowls

Beat the heat with these delicious bowls and smoothies!

Now that you know how much it costs to operate a Playa Bowls franchise and how much you would return from your investments, it’s time to evaluate the advantages and disadvantages of the business. In the previous sections, Playa Bowls has appeared to be a franchise worthy of investment, but no business is perfect. Here are the strengths and weaknesses of this company as I view it. 

Strengths

• Healthy Options – The menu of Playa Bowls consists of different bowls made from the highest quality and freshest ingredients. They include acai, pitaya, coconut, green, banana, chia pudding, and oatmeal. Each bowl can be customized to fit the cravings of customers. These treats not only pleasure the tongue; they also stimulate healing and motivate overall health improvements, which is a good break from all the fast foods many Americans consume.

• Generous Portions – Customers have come to love the generous portions of their Playa Bowls order. One bowl can easily serve as a meal replacement for customers. 

• Inviting Ambiance – Playa Bowls takes pride in its tagline, “a slice of summer, anytime” and manifests it in their walk-in store or restaurant. This lively decoration and ambiance cheers up the customers that visit in to dine or to pick up orders. The stores and bowls are “Instagram-worthy” as well providing free marketing for the company. 

• Simple Product Preparation – Anyone can make a smoothie and a fruit bowl with their eyes closed, and that’s the beauty of the operation of this business. With a couple of blenders, freezers, cutting boards, food containers, bowls, cups, and utensils, Playa Bowls can operate without the need to invest in a lot of equipment like ovens, deep fryers, and other cooking equipment that other concepts require. 

• Environment-friendly franchise- After using plastic containers in the past, Playa Bowls decided to listen to their environmentally-conscious customers and switch to eco-friendly bowls, cups, and utensils in all of their locations. They come has also partnered with local refuse companies to minimize environmental footprint and make recycling easy. This adaptation demonstrates the companies values. 

Weaknesses

• Expensive Products – High prices can be viewed as a strength and a weakness. A weakness because lower-income families aren’t going to be your target customer. Playa Bowls are priced between $9 to $14 a piece. This is a fairly high price point if you are going to consider the fact that this is the cost of a meal at fast-casual restaurants. 

• Longer Waiting Time – Customers have noted the crowdedness of their branches, and this implied the time-consuming preparation of all the freshly made orders. Waiting is simply not the customers’ favorite part of coming to Playa Bowls so they have recommended taking advantage of the online ordering system of the business and just coming to the store to pick up the treat. 

• High Calories – Playa Bowls fill their bowls and cups with highly nutritious ingredients, but their bountiful portion also makes them rich in calories. One serving Nutella Banana Acai Bowl, for example, contains 814 calories which are significantly greater than the recommended calories per serving. 

• Labor Shortage – Customers have been complaining about the long waiting time of picking up their orders. One of the reasons behind this is the lack of enough manpower to cater all of the freshly-made orders at once. Playa Bowls itself does not really need a lot of staff to run it, but with the influx of demand, you should take note of this efficiency weakness and strategize how you can resolve it. Unfortunately custom-made bowls require more labor than some other concepts. You have less ways opportunities to optimize the ordering process when customers have so many options. 

Opportunities

• Perennial demand – Playa Bowls was hailed as one of the fastest-growing small chains in 2020. Its products are widely appealing to the mass as they combine “healthy” and “pleasure” in one treat. The younger population, especially the millennials, have contributed significantly to its popularity. Their insatiable craving for acai bowls to gain a 353% rise in demand in 2020 with even more growth projected in the coming years. As a franchisee, you may widen the scope of your target market and introduce this to the older generation who are not familiar of the goodness of acai bowls and smoothies. 

• Generous profit margin – As previously discussed, The gross revenue and profit of Playa Bowls is greater than the total investment that you make to operate its franchise. Depending on the location, the demand, and the effectiveness of the management and marketing strategies themselves, a franchisee may earn a profit margin of 40% and more. With these earnings, you may handsomely tip yourself as an owner without compromising the compensation of your workers, and still, allocate more for business development ventures. In other words, you’ve got wiggle room in your finances even if costs continue to increase in the short term. 

• Human Capital Development –  The demand for Playa Bowls is not something one should take for granted. The products themselves are profitable. However, another critical factor of its success is the quality of customer service. Unfortunately, customer service has been noted as a threat, but you should realize that this is a room for improvement that you can take advantage of. With adequate training and upskilling of workers, you may create an inviting community that encourages patrons to leave more positive reviews and to keep coming back on your establishment.

Threats

• Records of Bad Customer Service – The performance of every franchise varies depending on the quality of the management. Some reviews have talked about their unsatisfactory experience with the staff of the establishment. Some of the common issues include lack of time management, inaccurate and incompetent preparation of orders, and sometimes, weak responsiveness. These observations do not necessarily represent the brand and can be avoided with a better system that you can work on. You’ll want to stay on top of these challenges as a franchisee. 

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• Cheaper Options in the Market – With a price range of $9 to $14, Playa Bowls is definitely on the expensive side. A smoothie from Playa bowl may cost you $10.99. This is way higher than the average price of smoothies which ranges from $5 to $7. Playa Bowls has justified its price range with its quality of ingredients and a plentiful portion. Nonetheless, this opens the doors from competitor brands to enter the market and compete on price. 
• Procurement of Base Ingredients – Playa Bowls imports Acai and Pitaya directly from Brazil. With the occurrence of the pandemic, restriction measures that were implemented to contain the spread of the virus may impact the trading conditions between the two countries. This means that the business may face a shortage of Acai and Pitaya which entails the increase of their prices. If the expenses of the business will increase, one must also increase the cost of their products. Playa Bowls is quite pricey already, and if this issue happens, the company would need to get creative on mitigating this issue. 

Is the Playa Bowls Worth the Cost to Invest?

Customize your own bowl!

Playa Bowls have already proven the upside potential. The shop is a fast-growing Acai bowl company with a generous profit margin of 40% with a gross profit of $2.4 million for some owners. Compare revenue figures to a franchise chain like Subway that generates an average gross sales of only $422,000 per unit. Playa Bowls is looking for an entrepreneur with a sense of social and environmental responsibility who is dedicated to creating a sustainable world where people are actively living a lifestyle that leans toward healthier options.

They are also looking forward to meeting goal-oriented team players who are ready to take risks with their low startup capital. If these words resonate with you, then you should consider investing at Playa Bowls.

This is a concept with high-upside, but it’s not a long-standing franchise opportunity with decades proven performance behind it. We’ve seen other concepts that rise quickly, free fall quickly when they fall out of favor with consumers. One example is the concept of fro-yo shops that popped up on every corner about a decade ago. Most of these types of shops are unfortunately already closed. Make sure to review the FDD for this company and make sure you’ve got conviction about the business model longterm.