UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

[X] QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 For the Quarter ended March 31, 2008

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

              For the transition period from _________ to _________

                          Commission File No. 000-52723

                      POWER SMOOTHIE CAFE FRANCHISING INC.
                      ------------------------------------
                         (Name of Small Business Issuer)

                    FLORIDA                              45-0501547
                    -------                              ----------
        (State or other jurisdiction of                 (IRS Employer
        Incorporation or Organization)               Identification No.)

          5645 CORAL RIDGE DRIVE #191
            CORAL SPRINGS, FLORIDA                          33076
            ----------------------                          -----
   (Address of principal executive offices)              (Zip Code)

                                  888-818-7693
                                  ------------
              (Registrant's Telephone Number, including Area Code)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filings requirements for the past 90 days.
YES [X]   NO [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [ ]   NO [X]

There were 10,416,000 issued and outstanding shares of the registrant's common
stock, par value $.001 per share, at March 31, 2008.

<PAGE>

                      POWER SMOOTHIE CAFE FRANCHISING, INC.

                                      INDEX

                                 MARCH 31, 2008

                                                                            Page
                                                                            ----

A Note About Forward Looking Statements ....................................   3

Part I.  Financial Information

   Item 1.  Financial Statements

      Balance Sheets as of March 31, 2008 and 2007 (Unaudited) ............. F-1

      Statements of Operations for the Three Months Ended
      March 31, 2008 and March 31, 2007 (Unaudited) ........................ F-2

      Statement of Stockholders' Equity (Deficit) as of March 31, 2008
      (Unaudited) .......................................................... F-3

      Statements of Cash Flows for the Three Months Ended March 31, 2008
      and March 31, 2007 (Unaudited) ....................................... F-4

      Notes to Financial Statements ........................................ F-5

   Item 2.  Management's Discussion and Analysis of Financial Condition
            and Results of Operations ......................................   4

   Item 3.  Controls and Procedures ........................................   6

Part II. Other Information

   Item 1.  Legal Proceedings ..............................................   7

   Item 1A. Risk Factors ...................................................   7

   Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds ....   7

   Item 3.  Defaults Upon Senior Securities ................................   7

   Item 4.  Submission of Matters to a Vote of Security Holders ............   7

   Item 5.  Other Information ..............................................   7

   Item 6.  Exhibits .......................................................   7

                                        2
<PAGE>

                     A NOTE ABOUT FORWARD-LOOKING STATEMENTS

         This Quarterly Report on Form 10-QSB contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 that are based on management's current expectations. These statements
may be identified by their use of words like "plans," "expect," "aim,"
"believe," "projects," "anticipate," "intend," "estimate," "will," "should,"
"could" and other expressions that indicate future events and trends. All
statements that address expectations or projections about the future, including
statements about our business strategy, expenditures, and financial results, are
forward-looking statements. We believe that the expectations reflected in such
forward-looking statements are accurate, however, we cannot assure you that such
expectations will occur.

         Actual results could differ materially from those in the forward
looking statements due to a number of uncertainties including, but not limited
to, those discussed in the Management's Discussion and Analysis of Plan of
Operations. Factors that could cause future results to differ from these
expectations include general economic conditions; further changes in our
business direction or strategy; competitive factors; market uncertainties; and
an inability to attract, develop, or retain consulting or managerial agents or
independent contractors. As a result, the identification and interpretation of
data and other information and their use in developing and selecting assumptions
from and among reasonable alternatives requires the exercise of judgment. To the
extent that the assumed events do not occur, the outcome may vary substantially
from anticipated or projected results, and accordingly, no opinion is expressed
on the achievability of those forward-looking statements. No assurance can be
given that any of the assumptions relating to the forward-looking statements
specified in the following information are accurate, and we assume no obligation
to update any such forward-looking statements. You should not unduly rely on
these forward-looking statements, which speak only as of the date of this
Quarterly Report. Except as required by law, we are not obligated to release
publicly any revisions to these forward-looking statements to reflect events or
circumstances occurring after the date of this report or to reflect the
occurrence of unanticipated events.

                                        3
<PAGE>

                      POWER SMOOTHIE CAFE FRANCHISING, INC.
                                 BALANCE SHEETS
                              AS OF MARCH 31, 2008
                                   (UNAUDITED)

                                                            2008         2007
                                                            ----         ----
ASSETS

CURRENT ASSETS
    Cash .............................................   $   2,373    $   3,029
    Accounts Receivable, Net .........................      11,607       44,419
    Inventory-Store Development ......................      45,000            0
    Notes Receivable .................................     261,686      175,000
    Deferred Income Tax ..............................           0       34,000
                                                         ---------    ---------
  TOTAL CURRENT ASSETS ...............................     320,666      256,488
                                                         ---------    ---------

PROPERTY AND EQUIPMENT, NET ..........................       5,853        4,400
                                                         ---------    ---------

OTHER ASSETS
    Notes Receivable .................................      27,320      204,999
    Security Deposit .................................       2,110        1,599
    Trademarks .......................................       5,000        5,000
                                                         ---------    ---------
  TOTAL OTHER ASSETS .................................      34,430      211,598
                                                         ---------    ---------

TOTAL ASSETS .........................................   $ 360,949      472,446
                                                         =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
    Accrued Expenses .................................   $ 466,785    $ 223,359
    Deferred Revenue .................................      30,000            0
    Notes Payable - Related Party ....................      28,679       55,498
                                                         ---------    ---------
  TOTAL LIABILITIES ..................................     525,464      278,857
                                                         ---------    ---------

STOCKHOLDERS' EQUITY (DEFICIT)
    Common Stock - 100,000,000 Shares Authorized;
     $.001 Par Value; 10,416,000 and 9,666,000 Shares
     Issued and Outstanding ..........................      10,416        9,666
    Additional Paid-in Capital .......................     585,584      426,334
     Accumulated Deficit .............................    (760,515)    (242,411)
                                                         ---------    ---------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) .................    (164,515)     193,589
                                                         ---------    ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...........   $ 360,949      472,446
                                                         =========    =========

                                       F-1
<PAGE>

                      POWER SMOOTHIE CAFE FRANCHISING, INC.
                            STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
                                   (UNAUDITED)

                                                        2008            2007
                                                        ----            ----

GROSS SALES .....................................   $     32,921    $    285,440

OPERATING EXPENSES ..............................        153,690         203,074
                                                    ------------    ------------

OPERATING INCOME (LOSS) .........................       (120,769)         82,366

OTHER INCOME (EXPENSE)
  INTEREST INCOME ...............................            593               0
                                                    ------------    ------------

NET INCOME (LOSS) BEFORE PROVISION FOR CORPORATE
INCOME TAXES ....................................       (121,362)         82,366

PROVISION FOR CORPORATE INCOME TAXES ............              0          27,500
                                                    ------------    ------------

NET INCOME (LOSS) ...............................   $   (121,362)   $     54,866
                                                    ============    ============

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
                                                      10,416,000       9,666,000
                                                    ============    ============
NET INCOME (LOSS) PER SHARE .....................   $       (.01)   $        .01
                                                    ============    ============

                                       F-2
<PAGE>
<TABLE>
                        POWER SMOOTHIE CAFE FRANCHISING, INC.
                     STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                                 AS OF MARCH 31, 2008
                                     (UNAUDITED)
<CAPTION>
                                               ADDITIONAL
                          COMMON STOCK          PAID IN     ACCUMULATED
                       SHARES       AMOUNT      CAPITAL       DEFICIT        TOTAL
                     ----------   ----------   ----------   ----------    ----------
<S>                  <C>          <C>          <C>          <C>           <C>
Beginning Balance,
January 1, 2007 ..    9,666,000   $    9,666   $  426,334   $ (297,277)   $  138,723

Common Shares
Issued at $.189
per Share ........      450,000          450       84,550            -        85,000

Common Shares
Issued at $.25
per Share ........      300,000          300       74,700            -        75,000

Net (Loss) for the
Year Ended
December 31, 2007             -            -            -     (341,876)     (341,876)

                     ----------   ----------   ----------   ----------    ----------
Ending Balance,
December 31, 2007    10,416,000       10,416      585,584     (639,153)      (43,153)

Net (Loss) for the
Three Months Ended
March 31, 2008 ...            -            -            -     (121,362)     (121,362)

                     ----------   ----------   ----------   ----------    ----------
Ending Balance,
March 31, 2008 ...   10,416,000   $   10,416   $  585,584   $ (760,515)   $ (164,515)
                     ==========   ==========   ==========   ==========    ==========

                                         F-3
</TABLE>
<PAGE>

                      POWER SMOOTHIE CAFE FRANCHISING, INC.
                            STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
                                   (UNAUDITED)

                                                          2008           2007
                                                          ----           ----
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income (Loss) for the Period ...............     $(121,362)     $  54,866

  ADJUSTMENTS TO RECONCILE NET LOSS TO NET
   CASH USED IN OPERATING ACTIVITIES:
    Depreciation .................................           530            380
  CHANGES IN ASSETS AND LIABILITIES
    (Increase) in Accounts Receivable ............        (8,282)       (21,844)
    (Increase) Decrease in Notes Receivable ......         4,704       (124,999)
    (Increase) in Inventory-Store Development ....       (45,000)             0
    Decrease in Deferred Income Tax ..............             0         27,500
    Increase in Accrued Expenses .................        94,092          4,182
                                                       ---------      ---------
NET CASH USED IN OPERATING ACTIVITIES ............       (75,318)       (59,915)
                                                       ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Loans from Related Party .....................         2,000         12,000
                                                       ---------      ---------

NET (DECREASE) IN CASH AND CASH EQUIVALENTS ......       (73,318)       (47,915)

CASH AND CASH EQUIVALENTS - BEGINNING ............        75,691         50,944
                                                       ---------      ---------

CASH AND CASH EQUIVALENTS - ENDING ...............     $   2,373      $   3,029
                                                       =========      =========

SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash Paid for Interest .........................     $       0      $       0
                                                       =========      =========
  Cash Paid for Income Taxes .....................     $       0      $       0
                                                       =========      =========

                                       F-4
<PAGE>

                      POWER SMOOTHIE CAFE FRANCHISING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2008
                                   (UNAUDITED)

NOTE A:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

                  This summary of significant accounting policies of Power
         Smoothie Cafe Franchising Inc., a Florida Corporation (the "Company"),0
         is presented to assist in understanding the company's financial
         statements. The financial statements and notes are representations of
         the company's management, who is responsible for their integrity and
         objectivity. These accounting policies conform to generally accepted
         accounting principles and have been consistently applied to the
         preparation of the financial statements.

         Nature of Operations
         --------------------

                  The Company was incorporated on October 21, 2002 and is based
         in Coral Springs, Florida. The Company provides worldwide franchise
         opportunities in relation to the establishment and operation of a quick
         service restaurant franchised business that serves a diversified menu
         including smoothies, wraps, salads, and sandwiches. The Company
         provides technical assistance in the establishment, business management
         and products within the framework of a franchise agreement. The
         Company's year-end is December 31st.

         Nature of Significant Initial Services
         --------------------------------------

                  When a franchise is purchased, the Company agrees to provide
         certain services to the new franchisee. Among the services provided by
         the Company are assistance with site selection and store design,
         assistance with initial inventory purchases, and training. If requested
         by the franchisee in writing, the Company will provide the new
         franchisee recommendations on the quantity, type, and sources for the
         equipment needed to operate the store.

                  When a master franchise is purchased, the Company agrees to
         provide certain services to the new master franchisee. The most
         significant service provided by the Company is an initial training
         program. Copies of operations manuals, store design plans, and
         advertising materials are also provided, as well as information
         relating to approved suppliers of equipment and services.

         Basis of Accounting
         -------------------

                  The financial statements have been prepared on the accrual
         basis of accounting. Revenues are recognized as income when earned and
         expenses are recognized when they are incurred.

                                       F-5
<PAGE>

                      POWER SMOOTHIE CAFE FRANCHISING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2008
                                   (UNAUDITED)

NOTE A:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         ------------------------------------------------------

                  Significant categories of costs include new store development
         expenses, wages, consulting expenses, legal and professional fees, and
         rent and are recorded as expense when the expense is incurred. For
         purposes of new store development fees, the expense is determined to
         have occurred at the time the store is sold to a new franchisee.

         Cash and Cash Equivalents
         -------------------------

                  The Company considers cash on hand, cash in banks,
         certificates of deposit, time deposits, and U.S. government and other
         short-term securities with maturities of three months or less when
         purchased as cash and cash equivalents.

         Property and Equipment
         ----------------------

                  The Company's capital assets have been capitalized and are
         being depreciated over their estimated useful lives using straight line
         methods of depreciation for book purposes and accelerated methods of
         depreciation for income tax purposes.

         Revenue Recognition
         -------------------

                  Royalty fees and advertising fund fees are a percentage of
         franchisees weekly gross receipts, as defined in the franchise
         agreement. These fees are recognized as income when earned. Revenue
         from sales of Master Franchise Agreements and Supply and Distribution
         Agreements is recognized when earned, which generally is when all
         material services required under the contract have been substantially
         performed or satisfied by the Company. Revenue from ongoing fees and
         royalties under Master Franchise Agreements and Supply and Distribution
         Agreements is recognized when earned, generally on a monthly basis
         based on actual reporting by the Master Franchisees and Suppliers, or
         based on our estimate of what should have been earned by us during that
         period under the terms of the Agreements.

                  Initial franchise fee revenue from franchise sales is
         recognized when all material services or conditions relating to the
         sale have been substantially performed or satisfied by the Company.

                                       F-6
<PAGE>

                      POWER SMOOTHIE CAFE FRANCHISING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2008
                                   (UNAUDITED)

NOTE A:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

                  The Company may recognize income before a new store opens if
         substantial performance exists at the end of the accounting period.
         After both parties sign the contract, the fee is non-refundable. The
         Company also develops certain franchise stores and then sells the
         store, including all equipment, furnishings, and inventory to new
         franchisees.

                  Income and expenses related to franchise store development
         activities are recognized upon the sale of the store to a new
         franchisee. Income is recognized on a gross basis and expenditures
         relating to the store development are capitalized when incurred and
         then are expensed as store development expenses and included in
         operating expenses at the time the store is sold to a franchisee.

         See Note G.

         Advertising Expenses
         --------------------

                  The Company expenses advertising costs as incurred. Amounts
         received for the advertising fund from franchisees are required to be
         used for advertising by the Company. Amounts on hand from franchisees
         that not had yet been used for advertising as of March 31, 2008 and
         2007 was $-0-.

         Management Estimates
         --------------------

                  The preparation of financial statements in conformity with
         generally accepted accounting principles requires management to make
         estimates and assumptions that affect the reported amounts of assets
         and liabilities at the date of the financial statements and the
         reported amounts of revenues and expenses during the reporting period.
         Actual results could differ from those estimates.

NOTE B:  NOTES RECEIVABLE
         ----------------

         Notes Receivable at March 31, 2008 were as follows:

         Master Franchise Agreement-PS Initiatives LLC ..    $ 150,000
         Sale of Developed Store-Abdul Bhegani ..........       95,000
         Sale of Area Rep Agreement - J. Cullen .........       44,006
                                                             ---------

                                                               289,006
         Less: current portion ..........................     (261,686)
                                                             ---------
         Long-term ......................................    $  27,320
                                                             =========

                                       F-7
<PAGE>

                      POWER SMOOTHIE CAFE FRANCHISING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2008
                                   (UNAUDITED)

NOTE B:  NOTES RECEIVABLE (CONTINUED)
         ----------------------------

                  The note receivable - master franchise agreement, dated
         December 29, 2006, was for a face amount of $200,000 with a $45,000
         down payment and required a payment of $5,000 by January 31, 2007 with
         future payments that are a percentage of the fees to which the master
         franchisee earns, beginning with the fourth franchised restaurant,
         until the principal amount has been paid in full. The note is
         non-interest bearing and is unsecured. All amounts due under this note
         are expected to be received by September 30, 2008.

                  The note receivable - sale of developed store, dated March 12,
         2007, had an original face amount of $205,000 and required a $75,000
         down payment, an additional $75,000 when permits are issued, and
         remaining payments upon final inspection of construction and at
         closing. The note is non-interest bearing and is unsecured. In December
         2008, the Company forgave $75,000 of loan principal in exchange for an
         equity investment that was made in the Company of the same amount. The
         Company recorded this in the fourth quarter of 2007 as an adjustment to
         the original sale price of the store. All amounts due under this note
         are expected to be received by September 30, 2008.

                  The note receivable - sale of area rep agreement relates to
         the unpaid upfront amount that was due when the agreement was
         originally signed. The note bears interest at a rate of 5.0%, is for a
         term of 3 years beginning December 1, 2007, and is unsecured.

                  Management evaluates collectability on a regular basis and
         sets up reserves for uncollectible amounts when it has determined that
         some or all of a receivable may be uncollectible. At March 31, 2008
         management believes that 100% of the notes receivable principal amounts
         are collectible.

NOTE C:  PROPERTY AND EQUIPMENT
         ----------------------

                  The Company owns equipment recorded at its cost of $10,054.
         Depreciation expense for the three months ended March 31, 2008 and 2007
         was $530 and $380, respectively.

                                       F-8
<PAGE>

                      POWER SMOOTHIE CAFE FRANCHISING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2008
                                   (UNAUDITED)

NOTE D:  ACCRUED EXPENSES
         ----------------

                  Accrued expenses at March 31, 2008 and 2007 include amounts
         owed for payroll to an officer and director of the Company totalling
         $369,650 and $174,050, respectively.

NOTE E:  COMMON STOCK
         ------------

                  The Company has 100,000,000 shares of $.001 par value common
         stock authorized and 10,416,000 and 9,666,000 shares issued and
         outstanding as of March 31, 2008 and 2007, respectively.

NOTE F:  RELATED PARTY TRANSACTIONS
         --------------------------

                  The Company has received loans from Dorothy Cullen, the mother
         of the Company's CEO William Cullen, for working capital. The amounts
         received are unsecured, due on demand, and non-interest bearing. The
         total due under this note payable to a related party at March 31, 2008
         and 2007 was $28,679 and $55,498. During the three months ended March
         31, 2008 and 2007, loans to the Company from Ms. Cullen totalled $2,000
         and $12,000, respectively.

NOTE G:  REVENUES AND COST OF SALES
         --------------------------

                  Revenues during the three months ended March 31, 2008 and 2007
         consisted of the following:

                                                      2008       2007
                                                      ----       ----
         Gross sales of equipment, inventory,
          and supplies to franchisees ...........   $ 14,252   $205,000
         Royalties ..............................      5,640     14,316
         Other ..................................     13,029     66,124
                                                    --------   --------

            Total revenues ......................   $ 32,921   $285,440
                                                    ========   ========

                  As part of its franchise sales process, the Company regularly
         will sign a lease, build out a store, supply it with inventory, and
         then sell this store to a franchisee. Revenues from the start-up period
         and the sale of the store to a franchisee are included above.

                                       F-9
<PAGE>

                      POWER SMOOTHIE CAFE FRANCHISING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2008
                                   (UNAUDITED)

NOTE G:  REVENUES AND COST OF SALES (CONTINUED)
         --------------------------------------

                  The costs related to the start-up of the store are included in
         "operating expenses" and totalled $3,870 and $83,000 for the three
         months ended March 31, 2008 and 2007. Costs related to the start-up of
         a store prior to it being sold, including store build-out, equipment
         and improvements, and inventory are capitalized when incurred and then
         expensed when the store is sold to a franchisee.

NOTE H:  INCOME TAXES
         ------------

                  For the periods ended March 31, 2008, the Company has incurred
         cumulative net losses and, therefore, has no tax liability. The
         cumulative net operating loss carry-forward is approximately $379,000
         at March 31, 2008, and will expire in various amounts through the year
         2028. The cumulative net operating loss carry-forward for income tax
         purposes differs from the cumulative financial statement loss due to
         timing differences between book and tax reporting.

                  The cumulative tax effect at the expected rate of 34% of
         significant items comprising our net deferred tax amount is as follows
         at March 31, 2008 and 2007:

                                                    2008         2007
                                                    ----         ----
         Deferred tax asset attributable to:
            Net operating loss carryover .....   $ 129,000    $  34,000
            Valuation allowance ..............    (129,000)           0
                                                 ---------    ---------
               Net deferred tax asset ........   $       0    $  34,000
                                                 =========    =========

NOTE I:  FRANCHISES IN OPERATION
         -----------------------

                  The franchise activity for the three months ended March 31,
         2008 and 2007:

                                                    2008         2007
                                                    ----         ----
         Operating at beginning of year ........       7           12
         Franchises opened .....................     -0-          -0-
         Franchises closed .....................     -0-          -0-
                                                    ----         ----
         Operating at March 31 .................       7           12
                                                    ====         ====

                                      F-10
<PAGE>

                      POWER SMOOTHIE CAFE FRANCHISING, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2008
                                   (UNAUDITED)

NOTE J:  RECENT ACCOUNTING PRONOUNCEMENTS
         --------------------------------

                  The Company does not expect the adoption of recently issued
         accounting pronouncements to have a significant impact on the Company's
         results of operations, financial position or cash flow.

NOTE K:  OPERATING LEASE
         ---------------

                  The company was a party to a 60 month lease for office space
         at March 31, 2007 that had an expiration date of November 30, 2011 and
         which required monthly rental payments totalling $5,740 per month
         during the first twelve months with an annual percentage increase. The
         Company moved out of its rented space on January 1, 2008 and has no
         further liability under the lease.

                  The Company had signed a sub-lease with a tenant under a
         "Supply and Distribution Agreement" which requires the tenant to pay
         the Company $4,500 per month in advance on the first day of every month
         for use of the warehouse space in the facility the Company occupied.
         The rental rate was to increase by 4% each year. The term of the rental
         was 10 years and the Agreement contained a renewal clause. Amounts
         received under this sub-lease were recorded as a reduction in the
         Company's lease expense. For the three months ended March 31, 2007
         total rent expense was $17,975 and rent received under the sub-lease
         was $13,500.

NOTE L:  INTELLECTUAL PROPERTY RIGHTS
         ----------------------------

                  The Company has acquired the domain name www.powersmoothie.com
         as well as various trademarks for the name Power Smoothie. The Company
         has also acquired a trademark for the logo for Power Smoothie Cafe.

NOTE M:  LIQUIDITY AND GOING CONCERN
         ---------------------------

                  The Company has limited working capital and has incurred
         historical operating losses. These factors create substantial doubt
         about the Company's ability to continue as a going concern. The
         financial statements do not include any adjustment that might be
         necessary if the Company is unable to continue as a going concern.

                  The ability of the Company to continue as a going concern is
         dependent on the Company generating cash from the sale of its common
         stock or obtaining debt financing and attaining future profitable
         operations. Management's plans include 1) selling its equity securities
         and obtaining debt financing to fund its capital requirement and
         ongoing operations and 2) entering into additional master franchise
         agreements for expansion of the Power Smoothie Franchise Cafe system
         into additional territories; however, there can be no assurance the
         Company will be successful in these efforts.

                                      F-11
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         You should read the following discussion and analysis in conjunction
with our financial statements and related notes included elsewhere in this
report. Except for historical information, the discussion in this report
contains certain forward-looking statements that involve risks and
uncertainties. We have based these forward-looking statements on our current
expectations and assumptions about future events. In some cases, you can
identify forward-looking statements by terminology, such as "may," "should,"
"could," "predict," "potential," "continue," "expect," "anticipate," "future,"
"intend," "plan," "believe," "estimate," "forecast" and similar expressions (or
the negative of such expressions.) Forward-looking statements are based on our
beliefs as well as assumptions based on information currently available to us,
including financial and operational information, legal counsel, and current
competitive conditions. As a result, these statements are subject to various
risks and uncertainties.

POWER SMOOTHIE OVERVIEW

         Power Smoothie Cafe Franchising, Inc. (the "Company" or "we") was
incorporated in Florida on October 21, 2002 as Power Smoothie Cafe Franchising,
Inc.

         We provide worldwide franchise opportunities in relation to the
establishment and operation of a quick service restaurant franchised business
that serves a diversified menu including smoothies, wraps, salads, and
sandwiches. The Company provides technical assistance in the establishment,
business management and products within the framework of a franchise agreement.
The Company's year-end is December 31st,

         We currently have 7 franchised locations in operations all within
Florida and are expecting to open 4 locations in Texas in 2008. We also expect
to open our first company-owned store in 2008. We do not operate any
company-owned stores at this time.

         Our goal is to capitalize on the success of our existing stores with a
new national franchisee program that will help us expand the Power Smoothie name
into new domestic markets. Each of our store locations will continue to focus on
our core business concepts: consistently providing freshly prepared local foods
in a quick service and casual atmosphere. We have entered into an agreement with
an outsourced distributor (www.cheneybrothers.com) for the delivery of all
products to all of our franchisees. We derive income from sales of master
franchise agreements, fees based on gross sales in franchised stores, and
mark-up of product delivered to our franchised retail stores.

         The results of operations section below reflects the operating results
of the Company for the period ended March 31, 2008 and for the period ended
March 31, 2007.

RESULTS OF OPERATIONS - 3 MONTH PERIOD ENDED MARCH 31, 2008

         For the three months ended March 31, 2008, the Company experienced a
net loss of $121,362 as compared net income for the three months ended March 31,
2007 in the amount of $54,866. The decrease in net income was primarily
attributable to a decrease in Sales. The Company's total assets at March 31,
2008 were $360,949 compared to total assets of $472,446 at March 31, 2007. A
decrease in Notes Receivable was the primary contributor to the decrease in
assets.

                                        4
<PAGE>

REVENUES

         The Company's total operating revenues were $32,921 for the three month
period ended March 31, 2008 and total revenues were $285,440 for the three month
period ended March 31, 2007. The Company recognizes revenues in three primary
areas: Sales of supplies to franchisees, sales of master franchise agreements,
and Royalty fees. For the three month period ended March 31, 2008, the Company
recognized revenues in those areas of $14,252, $13,029, and $5,640,
respectively. For the three month period ended March 31, 2008, the Company had
revenues in those areas in the amount of $205,000, $61,124, and $14,316,
respectively.

The number of franchise locations as of March 31, 2008 was 7.

EXPENSES

         For the three month period ended March 31, 2008, the Company had
operating expenses of $153,690, and operating expenses for three month period
ended March 31, 2007 were $203,074. As part of its franchise sales process, the
Company regularly will sign a lease, build out a store, supply it with
inventory, and then sell this store to a franchisee. The costs related to the
start-up of the store are included in "operating expenses" and totalled $3,870
and $83,000 for the three months ended March 31, 2008 and March 31, 2007,
respectively. Costs related to the start-up of a store prior to it being sold,
including store build-out, equipment and improvements, and inventory are
capitalized when incurred and then expensed when the store is sold to a
franchisee.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's cash position as of March 31, 2008 was $2,373, compared
to $3,029 on March 31, 2007. For the three month period ended March 31, 2008,
the Company's operations had a net loss of $121,362.

         As of March 31, 2008, the Company had a working capital deficit in the
amount of $204,798 compared to a deficit in the amount of $22,369 as of March
31, 2007. The deficit increase is due, in part, on the increase in accrued
expenses.

         The Company has no material commitments for capital expenditures.

         We presently have no other alternative source of operating capital. We
may not have sufficient capital to fund the expansion of our operations and to
provide capital necessary for our ongoing operations and obligations. We will
need to raise significant additional capital to fund our operating expenses, pay
our obligations, and to grow our company. We do not have any firm commitments
for any additional capita, and our financial condition may make our ability to
secure this capital difficult. There are no assurances that we will be able to
continue our business, and we may be forced to cease operations if we do not
raise significant additional working capital, in which even investors could lose
their entire investment in us.

OFF-BALANCE SHEET ARRANGEMENTS

         We have no off-balance sheet arrangements at March 31, 2008.

                                        5
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

         The Company's president currently acts both as its chief executive
officer and chief financial officer and is responsible for establishing and
maintaining disclosure controls and procedures designed to ensure that
information required to be disclosed in the reports that we file or submit under
the Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission, and that such information is
accumulated and communicated to our management, including our chief executive
officer and chief financial officer, as applicable, to allow timely decisions
regarding required disclosure. Disclosure controls are also designed with the
objective of ensuring that is information is accumulated and communicate to the
Company's management, including the Company's chief executive officer and chief
financial officer, as appropriate, to allow timely decision regarding required
disclosure.

         Management has evaluated the effectiveness of the Company's "disclosure
controls and procedures" (as defined in the Securities Exchange Act of 1934
Rules 13a-15(e)), as required by paragraph (b) of Exchange Act Rules 13a-15 as
of the end of the period covered by this quarterly report. Because the Company
was unable to submit this quarterly report in a timely manner, our chief
executive officer and our chief financial officer, as applicable, have concluded
that based on such evaluation, the Company's disclosure controls and procedures
were not effective as of March 31, 2008.

MANAGEMENT'S REMEDIATION PLANS

         As of the end of the period covered by this quarterly report, the
Company has taken and will take steps towards improving the internal control
over financial reporting. This includes hiring additional accounting personnel
and other experts, as well as implementing controls over the documentation and
review of all matters related to filings.

INHERENT LIMITATIONS OVER CONTROLS

         Our management recognizes that any controls and procedures can only
provide reasonable assurance that the objectives of the control system are
achieved. Management also recognizes that the control system design must weigh
resource constraints with the benefits of controls, relative to cost. Our
disclosure controls and procedures have been designed to provide reasonable
assurance of achieving the objectives, however, due to inherent limitations in
all control systems, no evaluation of controls can provide absolute assurance
that all control issues within the Company, have been detected.

CRITICAL ACCOUNTING POLICIES

         There was no change in the Company's internal control over financial
reporting that occurred during the period covered by this quarterly report on
Form 10-QSB that has materially affected, or is reasonably likely to affect, the
Company's internal control over financial reporting.

         In the notes to the consolidated financial statements for the quarter
ended March 31, 2008 included in the Company's Form 10-QSB, the Company
discussed accounting policies that are considered to be significant in
determining the results of operations and our financial position. We believe
that the accounting principles utilized by us conform to accounting principles
generally accepted in the United States of America.

                                        6
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         The Company is not currently a party to any legal proceeding that
management believes would have a material adverse effect on the consolidated
financial position or results of operations of the Company.

ITEM 1A. RISK FACTORS

         The risk factors included in the Company's Form 10-SB/A filed on
September 10, 2007 have not materially changed.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

         During the period ended March 31, 2008, the Company did not issue any
shares of common stock.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

ITEM 5.  OTHER INFORMATION

         None.

ITEM 6.  EXHIBITS

EXHIBIT
NUMBER   DESCRIPTION
------   -----------

31.1     Certification of Chief Executive Officer and Financial Officer pursuant
         to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of
         1934, as amended. *

32.1     Certification of Chief Executive Officer and Financial Officer pursuant
         to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002. *

* Filed herewith

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on the 30th day of June, 2008.

                                    POWER SMOOTHIE CAFE FRANCHISING, INC.

                                    By: /s/ WILLIAM CULLEN
                                        ------------------
                                        WILLIAM CULLEN
                                        CHIEF EXECUTIVE OFFICER, PRESIDENT,
                                        AND CHIEF FINANCIAL OFFICER

                                        7