🍟 4/11/2024 – The Business of Dirty Soda
FRANCHISE OF THE WEEK
Swig
Fast Facts
Background
- HQ: Lehi, UT
- Founded in 2016, franchising since 2022
- Swig is a franchise that specializes in serving specialty drinks and sweets.
Location Trends
Franchise Fees
- Royalty: 7%
- Brand Fund: 2%
- Franchise Fee: $39,500
Financial Overview
- The below table discloses information on 36 affiliate owned stores from January 1, 2022 to December 31, 2022.
The Wolf’s Take 🍟
For the uninitiated, “dirty soda” is a combination of soda, coffee creamer, and flavored syrups.
Menu items at Swig include drinks like “Life’s a Peach”, a mix of Dr. Pepper, peach + vanilla flavor syrups, and some half & half. You can also get “The Cherry Bomb” (Pepsi, cherry syrup, + coconut and vanilla cream), or the “Beach Babe” which has Mountain Dew, raspberry + peach flavor, and vanilla cream.
Live look at Utah residents
Depending on your lifestyle, these drinks could sound like a dream concoction, or an absolute abomination.
But to residents of the good ol’ beehive state (AKA Utah), these fluids have been flowing like a river for almost a decade now. With a large portion of the population abstaining from alcohol and caffeine, they gotta get their fix somehow!
Beyond Swig, who is the clear market leader with 60+ locations open + hundreds more in franchise development, there’s a host of other concepts vying for market share:
- FiiZ Drinks – 60ish units
- Sodalicious – 25ish units
- Factory & Co – 17ish units
- Pick Me Up – 13ish units
- Quench -10ish units
- Pop Drinks, The Sodamix, and (my favorite as far as a name goes Guzzle Soda Shack, all with 10ish units open
Mind you that not all these brands are franchising, but it gives you an idea of what’s cooking (or being GUZZLED) out in Utah and other mountain states.
The Dirty Deetz
As you can see from Swig’s numbers, when a dirty soda biz gets enough volume, the margins are pretty impressive.
Your standard location is 1,200-1,800 square feet with a drive-thru – think of these businesses as a bigger Dutch Bros that sells soda bevs instead of coffee based bevs.
Speaking of Dutch Bros, Swig is on that level of growth it seems. They have large franchise groups taking down territories nationwide, have an organized corporate group, and recognizable branding.
They have at least 250+ units being built, and were recently named the “official soda shop of the Utah Jazz” – great hydration before a big game eh?!
For this to succeed nationwide, they’ll need to maintain high revenues to cover the increased rent prices in core markets outside of the mountain west region.
As a native northeastern resident – I candidly have no clue how this will perform in New York, New Jersey, etc. I have it on good authority that this concept is succeeding outside of Utah, and that the #1 performing location for Swig is actually based in Houston, Texas.
However, after spending close to a year in Texas…that fact doesn’t surprise me, and I’d still be a little cautious if I was in markets with more health-conscious consumers.
But at the same time, the dirty soda train has left the station, and so far has no signs of slowing down.
Resources
SMB TWEET OF THE WEEK
The Early Grind – Greg Van Horn
The early days are the hardest! There’s some great feedback and advice on the thread. Check it out if you’re in the hard part right now!
Disclaimer: This Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on this site constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.
All Content in this email is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the email constitutes professional and/or financial advice, nor does any information in the email constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content in this email before making any decisions based on such information or other Content.