With thanks to 300daysaway.com
Are you looking for the best bubble tea franchise to invest in?
Unless you’ve been living under a rock the last few years, you’ll have heard about bubble tea. It’s huge, and it also happens to be a franchise model you can jump into relatively quickly.
To give you an idea of how big the world of made-to-order beverages industry is:
The global bubble tea market size was USD 2.02 billion in 2019 and is projected to reach USD 3.39 billion by the end of 2027, exhibiting a CAGR of 7.2% during the forecast period.
Fortune Business Insights.
With thanks to Business Wire
The industry is big, and this makes it something you should be interested in. It’s proven particularly popular with Gen Z customers, and they are not an easy market to crack.
The good news is that anyone can run their own bubble tea business and in this post I’m going to take a look at the top franchises around, and how you can get involved.
So let’s get right into it.
Best bubble tea franchise: the magic of bubble tea
Bubble tea drinks are a blend of tea and milk, along with fruit juices. Tapioca pearls are then added to the tea blend before it is shaken to make the final product. The Tiawanese tea-based drink has been popular in China since the 1980s, but has recently exploded in the rest of the world.
You can drink it hot or cold. The drink normally comes with a larger than usual straw, which allows the pearls to travel up the straw. You chew the pearls, or ‘bubbles’ for extra flavor. These chewy tapioca balls are also known as ‘boba’.
There are plenty of boba tea franchise opportunities, so let’s get straight into it.
So which is the best bubble tea franchise?
Let’s take a look at the very best franchise opportunities in the bubble tea market.
Kung Fu Tea
First up is what looks to be the most fun: Kung Fu Tea.
Here’s what they have to say:
Founded in Queens, NY on April 30, 2010, we’re America’s largest bubble tea brand with over 350+ locations across the U.S. As one of the OGs of bubble tea, we maintain uncompromisingly high standards. Let’s be real. Making tea that looks good isn’t the hard part. The actual challenge is making tea that tastes good and presenting it in an innovative way. Made with the art of ‘3T’ Kung Fu, every cup of tea is freshly brewed at the perfect temperature using premium tea leaves. The beverages we bring to the table are strong inside-out — perfect for your taste buds and your Instagram stories.
You may or may not want to fill your Instagram feed with photos of the tea you drink here. But 350 locations and counting? That’s impressive. Sounds like the perfect opportunity for an entrepreneur.
The process of becoming a franchisee for Kung Fu Tea is as follows:
- Fill out the inquiry form
- A sales representative will contact you via email or phone
- Schedule an interview to go over all the details
- Receive franchise disclosure document (FDD)
- Look for the best possible store location (the Kung Fu Tea Team will provide professional recommendations for location screening and final approval)
- Sign franchise agreement and lease for approved store location in your local area
- Store Renovation (the Kung Fu Tea Team will provide a standard store layout, floor plan and interior design for bubble tea stores)
- Training Program (provided for up to two people and usually finishes in three weeks)
- Grand Opening (the Kung Fu Tea Team will have a senior staff member present to assist you during the grand opening period for up to two weeks to ensure smooth store operation)
- High fives and continued support from the Kung Fu Tea Team as you run your own boba shop
The Kung Fu Tea franchise offers you a traditional or nontraditional store model. A traditional store is the whole ‘Starbucks’ feel, with a bricks and mortar store in town (500 to 1500 square feet). A nontraditional store can be set up in the following locations:
- Military installation
- Train station
- Subway station
- Theme park
- Shopping centers
Any place that has foot traffic but isn’t in a shopping mall, basically.
The training fee is $10,000. I couldn’t find out if that is for each person (they can train up to two) or for multiple franchisees.The traditional store franchise fee is $37,000, with the nontraditional fee being ‘on request’.
The total initial capital is where the large sums come into play. For a traditional store, Kung Fu Tea say it’s anything from $140,000 to $422,000. For a nontraditional store franchise fee you are looking at anything between $123,000 to $275,000.
How much can I expect to make?
Unsurprisingly, Kung Fu Tea don’t explicitly offer expected income statements for franchisees.
Go here for the application form.
Verdict: This is a huge and very popular franchise. It also has partnerships with other brands in the fast food industry so you can easily expand once you’re up and running. But if that was all I said on the matter I’d be letting you down.
Some good news first though. Even during the pandemic the franchise saw it’s franchisees opening up stores all over the place. During 2020 26 new franchise locations opened. That’s pretty special. However, in 2020, the average franchise revenue was just $335,688.
That’s before costs.
Stack that revenue up against the franchise fee and it’s not hard to see why the average Kung Fu franchisee has to wait 10 years before breaking even. Now, this is not a bad thing. It just means that anyone who takes this franchise on has to do so with eyes open, and an understanding that it is a long game.
There is plenty of growth in bubble tea though, so that final wait may shorten somewhat.
Okay, here’s Gong Cha. The headquarters for this company are in Taiwan, but the brand has franchisees all over the world. It was founded in 1996 and has over 18,000 Gong Cha stores in over 20 countries.
The website says it’s all about ‘brewing happiness’:
“Gong cha” is a Chinese term for the act of offering the best tea to the Emperor. It represents teas and beverages of the highest and finest quality, fit for royalty. Today, Gong cha is dedicated to the same principal of providing premium products to its customers around the globe. Gong cha promises to inspire the human spirit and create happiness with a perfect cup of tea.
The process of becoming a franchisee with your own location involves first filling out a form online and then going through some checks. After a credit check there is a business plan review. Then there is a location review and a check and review of the franchise agreement.
Comprehensive training then takes place, before construction of the store and installation of the necessary equipment. Then it’s grand opening time.
It takes roughly 30 days for the initial checks to go through. Then after signing the agreement and going through the process the wait time before opening is usually 4-8 months. Go here for the application form.
Verdict: A popular franchise, Gong Cha has a great international presence. However, this is all about the long game as well. In 2021, with an average 18% profit margin, you could expect to break even in around 8 years. Again, this is a market that is exploding, but anyone who enters the franchise opportunity without a long-term view will simply lose money.
This brand has over 100 stores in North America, so it is reasonably well established. The franchising fee is $22,500 and franchisees can expect to pay start-up costs from $260,000 to $360,000.
At Sharetea, we have professional R&D team to create recipes with different ingredients to bring out the unique qualities of each tea. We focus greatly on quality and insist on providing authentic Taiwan high mountain tea to deliver great experiences.
Sharetea claims it has a very easy franchise system that offers full support.
The company itself has published guidelines on how to start a franchise with them:
- Ensure you have adequate capitalization.
- To start your own Sharetea bubble tea business, you must have a minimum initial capital of $100,000+.
- Appreciate the investment required for a bubble tea franchise.
- You will need to consider real estate costs, the cost of equipment and signs, the costs of licenses and permits, the cost of uniforms, the cost of insurance, etc.
- Evaluate your prior experience and strengths.
- You should thoroughly evaluate your prior business experience before applying to become a Sharetea bubble tea shop franchise owner.
- Assess market availability.
- You will want to look at the market availability for Sharetea franchises and see if there are available markets in your location of interest before proceeding with the franchising application.
- Submit your application.
- Your application will be reviewed by the Sharetea franchise agent. You will be emailed a confirmation receipt upon reception of your online application, where we will additionally provide the contact details of the franchise owner.
- Receive approval & opening your Sharetea franchise.
- You will receive franchise approval once your financial and background checks are completed. Approval will only be given to candidates who meet all the requirements of franchise owners.
I had a good look around and couldn’t find any reviews on Sharetea from a franchisee point of view. The best bet is to make some moves towards applying and see what happens. I will say that it is a franchise that has some traction worldwide, and is therefore at least worth investigating. But I wouldn’t make it my first choice.
Okay, this one has a name that you can’t really forget once you’ve heard it once. So that’s good. Alongside the usual bubble tea-based drinks Bubbleology also offers Bubble Waffles. You need to check out the website to see just how amazing these things look.
Headquartered in London, the brand has plenty of sites in the United States.
Let’s get right into the requirements that Bubbleology has outlined for franchisees. They say you need local market knowledge and a passion for the brand. Other requirements include:
- $100K in liquid assets per store
- $300k net worth per store
- Some retail or restaurant experience
Initial franchise fees are $32,000 and the franchise term is five years.
CUPP Bubble Tea
Now, here’s one to seriously consider. It could be one of the best bubble tea franchise opprtunities out there right now.
The company is UK based and has a number of stores there. However, it does offer international opportunities, specifically the chance to become the owner of an International Master Franchise. This allows you to own the rights to a whole territory.
Startup costs include £17,000 (approx $20,300 at time of writing) as an initial fee. Then you’re looking at £80,000 (approx $95,000) to open up your first store. And that’s it.
As a Boba franchise this one is particulalrly impressive. The brand is well known for excellent training systems and their support is a respected feature.
Verdict: Well-respected with a strong customer base, and with excellent opportunities abroad. This is extremely polished and pretty much a perfect business opportunity. This falls into the ‘best bubble tea franchise’ bracket.
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7 Leaves Cafe
Labelled the ‘Asian Starbucks’, 7 Leaves has 12 (and counting) franchise units in the United States. The franchise fee is $35,000 and the investment range is $244,000 to $490,000.
According to the company, the franchise is a ‘proven, profitable’ system. The company has seen phenomenal growth since it started up in 2017. The menu is solid, with a wide variety of drink options including ice-blended versions. Most importantly, the company has won a bunch of business awards.
This kind of opportunity requires a solid financial foundation though.7 Leaves requires franchisees to have a total net worth of $2,000,000 plus a liquidity of $1,000,000. So it’s a serious investment and one that demands a true entrepreneurial focus.
Verdict: Strong and well-established in the bubble tea industry, this is an opportunity worth going for if you want your own bubble tea shop and have the funds.
This one is actually quite promising in some ways. This brand has headquarters worldwide and two in the USA. There is little information about them other than what is on their website but I feel they are worth investigating for the follwoing reasons:
- They have headquarters that you can contact in the USA and Europe
- Their onboarding program for new franchisees is carefuly outlined on the website, and it sounds thorough
- They are exhibiting at various food and beverage shows and expos around the world
The application is here. Again, do your due diligence, but at least they have established offices in the USA.
With over 18 locations across the globe, Jazen is now pushing the franchisee option.
For Jazen, you need to have $100,000 in liquidity. On top of that, you can expect the total investment to be $186,000 – $339,000.
It’s also quite useful that Jazen Tea offers three different business models to it’s franchisees. You can have Jazen as an ‘add-on’ to your existing business, run your own store or partner up with Pho Hoa (a noodle soup partner).
Verdict: Thorough, professional and growing.
In 2008, four Vietnamese sisters – Anh, Kelly, Jenny & Julie – open their first Bambu Shoppe in the heart of the Vietnamese community in San Jose, California. Their exceptionally friendly service and large menu of fresh, healthy, and authentic Chè dessert drinks, crisp boba milk teas, signature Vietnamese coffees, real fruit smoothies and exotic juices captured the attention of the entire San Francisco Bay Area. Today, there are over 70 Bambu Shoppes located in 22 states and Canada. The founding sisters still actively manage their four Shoppes in Northern California and Illinois while continuing to deliver a great customer experience and serving their one of kind unique and 100% vegetarian drinks “Just the way you love it.”
That is a great story. And Bambu has shops all over the USA. Interestingly, the company ‘charges no fees’.
I admit I was a little sceptical about that last part. As it turns out, the cost analysis looks something like this:
Initial Franchise Fee: $39,000
Initial Investment : $144,000 – $297,500
Cash Requirement: $50,000 – $100,000
Veteran Incentives: 15% off franchise fee
Royalty Fee: $750-800/mo.
Ad Royalty Fee: $550/mo.
It’s a 10 year term for the franchise too. To be honest, their training looks sound, and they have been featured in major magazines like Entrepreneur. To me, that’s a sign of quality.
Verdict: Definitely check these guys out
Another quality brand with some real growth taking place in the USA, CoCo Fresh has opened 21 stores in New York City and New Jersey. The brand also has 4500 stores around the world.
It offers 1 or 3 store location opportunities. For the 1 store option you can expect to pay start-up costs of between $252,000 and $482,000. It’s one of the best bubble tea franchise businesses I’ve come across, similar to Kung-Fu Tea in that it seems like a genuinely great place.
The bottom of the barrel tier
Tapioca Express has a couple of issues I’m afraid.
First impressions are good. The application process is very clearly outlined on the website and it’s reassuringly thorough. Pay a $25 fee upfront to get started and you’re ready to go. However, when it comes to total investment it breaks down like this:
- An initial investment of $51,000 – literally what they want from you at the start
- Further liquid assets as part of a start up cost totalling up to $527,000
Now, this is where it got a little hazy for me. I looked at the breakdown of that initial payment and it looks like this:
- 5 years initial franchise fee of $15,000
- $10,000 product deposit
- $3,000 training fee
- $17,000 mandatory equipment purchases
- $6,000 for marketing materials
My calculator tells me that is north of $100,000.
The ‘up to $527,000’ includes:
Besides $51,000 as an initial payment to Tapioca Express, there are some other expenses you should expect. For example, construction costs range from $30,000 to $150,000. The cost of equipment ranges from $30,000 to $70,000. The cost of furniture & fixture ranges from $6,000 to 15,000. Initial inventory costs range from $9,000 to $20,000. And, other costs & expenses range from $27,500 to 113,500
(Tapioca Express website)
The website shows the brand has 29 franchisees in the United States. That’s not a hell of a lot. However, it has generally favorable reviews across the Web and it does clearly offer ongoing support for franchisees.
Verdict: One to think about. To be honest, if I’m looking at a franchise offer that doesn’t even get the initial numbers right, I’m not sure I’d like to get involved. Not saying don’t get involved, but due diligence is important. And even if it is legitimate, it certainly can’t be seen as one of the low-cost franchises.
I actually quite liked the website for this one. Not that design matters, but the elegant site shows some real care and attention to brand image.
Koi Tea is a family business that offers franchises. The store first opened up in Stafford, Virginia, and it was named after a family member’s love of Koi fish. The company talk a lot about values, especially sustainable business practices and the family approach.
So far, so good. Then I started to dig a little deeper into the company and a couple of red flags popped up.
First up, the website says the company is not allowing franchises because it is still getting it’s ‘feet wet’. Then when you head to the franchise page (yes, it’s not doing franchises but it has a franchise page) it offers these words:
Below are the financial requirements to open a Smoothie King in the United States…
I respect professionalism, and if the company can’t even manage to use the brand name on the franchise page, we have a problem. For what it’s worth, initial franchise start-up costs start at $200,000 and could amount to as much as $500,000. You need a minimum credit score of 700, and liquidity of $100,000 for one store.
Verdict: I’d think twice. Not the best option. Smoothie King? These guys can’t even get their own brand name right.
Bee and Tea
This is still a relatively new franchise, so new that I couldn’t find their website. Still, there are traces of the brand around the Web. Apparently it has one franchisee currently in the USA. Initial franchise fee is $40,000 and initial costs range from $144,000 to $280,000.
I couldn’t find the website, and all of the digging I carried out resulted in the figures above and, startlingly, no actual evidence of a business foundation date. This is about as far from the best bubble tea franchise as you can get.
Verdict: Great name. No website. Do they even exist?
Happy Lemon Tea
This brand may have over 500 stores worldwide, but their online presence is hardly reassuring. A Twitter account that hasn’t been used since 2013 and the Master Franchise for the UK being the only website I could find. And yet so many franchise sites say they are one of the best bubble tea franchises around.
Verdict: There is a form on the UK website for prospective franchisees, but I didn’t even dare to fill it in. Most definitely not in the running for ‘best bubble tea franchise’.
Finding the best bubble tea franchise for you
Franchises are not an easy way to make money. In fact, they are businesses, which take time and effort to make profitable. Setting out with the right approach can save you some wasted years and a ton of money. If you feel like you’re ready to navigate the choppy waters of franchise ownership, keep the following in mind.
Know why you are doing it
It’s not enough to ‘want to make money’. Franchisee life is hard and demanding. You need to have a goal to aim at. If you don’t have a goal you will drift as soon as the challenges turn up.
Set some goals that focus on specifics. Set dates and amounts when you’re talking about money. For example, ‘I will make $50,000 annual profit by Year 4’ is a lot more powerful than ‘I want to be rich’.
And besides, if you don’t set goals that are specific, you’ll feel worse when you fail. Managing a business is often just about managing challenges. Small, specific and realistic goals are much more satisfying because you can actually meet them.
You’re not going to find the best bubble tea franchise on the first day of looking. Take a full view. Search online and call franchise owners. Get a feel for what it’s like to run a franchise. Find the financial reports and data that (most) franchises happily publish.
Learn about the risks involved and the costs if things don’t work out. And most importantly, choose a franchise opportunity that you can see yourself working long hours at. You’ll need energy and plenty of passion.
Contact the franchisor
The franchisor has a part to play in your success, so it’s important that you feel confident they can help you reach your goals.
Look for a prompt response to your franchisee enquiry. Contact their offices (if they are hard to reach it’s probably not worth bothering).
Before you call any franchisor, have this list in front of you:
- Was there a professional greeting when they answered the phone?
- Did you reach a franchise sales representative on your first call?
- How satisfied were you with their answers to your questions?
- Were they asking for your information?
- Did they treat you courteously, professionally, and genuinely care about your needs?
- Were there any next steps offered?
- From 1 to 10 (ten being the best), how would you rate them?
When the conversation about the offer is taking place, ask them about the systems they have. Specifically, ask about the franchise qualifying and sales process. The response should be clear and detailed. All the details you would expect should be discussed, from the royalty fees you will be paying to the grand opening arrangements.
As things progress, you’ll recieve a Franchise Disclosure Document (FDD) and an agreement. Make sure to have a specialist franchise attorney look over these documents. You need to be aware of any potential problems that may arise. This is an absolutely vital part of the process. Yes, you may expect to pay hundreds of thousands of dollars into the business over the next few years, but isn’t it better to pay a few hundred for an attorney who will advise you on the safety of the investment before you start?
Note: Inside the FDD you should find a list of all the franchisees. Use the list to contact some of the franchisees. You can get a real feel for how things are for them. There should be some time for you to visit them too.
Running your own business is a great adventure. New franchisees will naturally find it a challenge, but with a solid franchisor and due diligence you shuold be fine.
Are you looking for the best bubble tea franchise? Thinking of running your own franchise business but don’t have any money? No problem. Take a look at How to finance a franchise with no money (4 simple tips).