About a dozen years ago, Nick Crouch was in his mid-20s and had the proverbial “entrepreneur bug.”
That’s why entering a Tropical Smoothie Cafe in St. Augustine, Florida, for the first time was nothing short of a dream. He fell in love with the atmosphere and made-to-order food. It was fun, vibrant, and the customer base seemed happy and energetic.
“I remember saying, ‘This is it, this is it,'” says Crouch, recalling a conversation with his mom. “I’m a restaurant guy. I started washing dishes when I was 15 years old. I’m just a worker. And I said, ‘This is a great concept. We should look into this.'”
Curious about the brand, Crouch poked his head into the kitchen and eventually struck up a conversation with the owners. With an opportunity in reach, his family pulled money together and the then-operator provided some financing and training. Roughly 45 days later, Crouch became Tropical Smoothie Cafe’s latest franchisee.
Fast forward to 2023, Crouch finds himself the co-CEO and co-founder of DYNE Hospitality Group, a company formed after Crouch combined business operations with Glen Johnson in 2017. As Tropical Smoothie Cafe’s largest franchisee, the group has more than 100 locations in six states: Florida, Georgia, Alabama, Arkansas, Oklahoma, and Texas. The chain has also started development in Missouri and Kansas. Crouch estimates DYNE is currently opening a cafe every three weeks.
From the beginning, Crouch’s main goal was to be a great employer and run the business the best he could. Crouch served as general manager and worked open to close almost every day of the year. He used that success to pay back his family and open a second location. Crouch likes to say he “lived off bologna sandwiches for several years” during those early times.
“The guys I studied and really almost thought of as celebrities as a young man are the big multi-unit guys that had hundreds of units,” Crouch says. “And I’d go to the multi-unit franchisee conference and see them on stage and really think, ‘Man, this is what I want to do with my life. I really believe in franchising and the systematic approach to business and I would love to get there.'”
Once Crouch had four or five shops under his belt, he wanted to “blow this up and really go after being a big player.” The operator did just that when he and Johnson joined forces. They were the two largest franchises in the brand, which led to several friendly business conversations between them. After about a year and a half of discussion topics, Johnson and Crouch arrived at a potential partnership, but not a forced one.
The executives’ views on culture and values aligned—so much so Crouch says, “It was kind of scary actually. It was almost identical to what our mission was in business and in life.” He claims it was a sign from God that he and Johnson merge their companies, scale to hundreds of locations, and become a billion-dollar brand. Since its founding, DYNE has opened more than 60 locations in six years.
Johnson is responsible for finance, planning the bigger picture, real estate, and engaging with lenders. Crouch is more of the “boots on the ground” executive, which requires visiting stores and ensuring culture remains intact.
“I got one guy that’s going to make sure we have the money. He’s going to make sure we have the best pins at the best corners around the country. And I trust that’s gonna happen,” the executive says. “That’s how I felt about Glen and he felt the same as me—our cafes are going to be run well, we’re going to have a great company culture, and we’re going to have the best people and Nick’s going to focus on that 24/7 and it’s going to be run the best you possibly could,” Crouch says. “He trusted me. So, when you have that, it’s pretty neat to be able to just go do your thing and know the other parts of the business are important, but your partner is leading them the best anyone could.”
DYNE projects 15 openings in 2023, bringing its total to 110 locations. Next year will bring another 15. Subsequent years should see the opening of 15–20 shops annually.
Crouch’s company was the first to open a standalone Tropical Smoothie Cafe. These units have the highest AUV and margin and DYNE controls aesthetics, exteriors, and landscaping thanks to its ownership of the dirt and buildings at nearly all locations. There’s one cafe in Dallas that’s a double drive-thru with no dining room; one lane is traditional while the other is for mobile orders and third-party delivery drivers. DYNE also has a smaller standalone prototype that has only 15 seats and sees 90 percent of its business come via drive-thru. This format will likely be what most future shops look like since the company believes it can achieve the same volume with lower overhead costs.
In addition to store openings, DYNE acquires other franchised units within the system.
“When you get to a certain size, your phone starts ringing more than you’re calling other people, calling you to see if you want to buy them out,” Crouch explains. “And that’s what’s been happening recently this year. There were phone calls, ‘Hey, we’re ready to retire. Are you all interested?’ And we end up buying them all. So we’re always entertaining acquisitions. And then eventually I think the brand will be large enough and some of these guys that have 10, 15, 20, or however many units might be ready for an exit and we’ll look to acquire them.”
Tropical Smoothie Cafe recognized DYNE as “Franchisee of the Year” and “Developer of the Year” at its 2023 Inspire Better convention. It’s not the first time Crouch’s team has won those awards, which proves to him just how consistent and innovative his company has become over the years.
DYNE is part of a fast-casual brand that achieved 11 straight years of same-store sales growth, opened 158 stores, and signed 258 franchise agreements in 2022. It’s a big reason why the franchise company isn’t involved with another quick-service concept and doesn’t plan to in the future. DYNE has been approached “by every brand under the sun,” but it turned them all down, Crouch notes. None match the ROI and culture it established with Tropical Smoothie Cafe.
“We feel this is just the beginning for Tropical Smoothie Cafe,” the co-founder says. “We’re seeing that the AUV continues to climb. All our eggs are in this basket right now and we don’t foresee going into other brands. We have other businesses, but other franchises, [quick-service] or fast-casual brands, we don’t see us going into those any time soon. We’re very committed to growing Tropical Smoothie Cafe to hundreds of units.”