10 Bubble Tea Franchise Opportunities in 2023
If you like tea, but want to capitalize on a hot trend, then a bubble tea franchise might be right up your alley. Here are the best ones to consider.
Bubble tea, or boba tea, is a popular beverage that originated in Taiwan. It usually includes tea, milk, tapioca balls, and sometimes other toppings. There are several franchises available in the U.S. for entrepreneurs interested in building a business around this beverage. Here are a few bubble tea franchise opportunities to consider.
What is a bubble tea franchise?
A bubble tea franchise is an independently owned business that sells bubble tea using a franchise model. This business structure involves a larger brand that is owned by a corporation, and individual stores that are owned and operated by local franchisees. Franchisees pay an initial fee and ongoing royalties in exchange for the ability to use the brand’s established systems, branding, and resources.
Below is a more detailed explanation of what a bubble tea franchise involves:
- Brand Recognition: One of the primary benefits of owning a franchise is the ability to operate under a well-known brand. This helps attract customers who are already familiar with the brand’s offerings and reputation. It also reduces the amount of marketing and advertising the franchisee needs to do.
- Initial Franchise Fee: To acquire a franchise, you generally have to pay an initial fee. This gives you the right to use the franchisor’s brand and business system. The amount varies depending on the franchise, but it typically ranges from tens of thousands to several hundred thousand dollars.
- Ongoing Royalties: In addition to the initial franchise fee, franchisees usually have to pay ongoing royalties to the franchisor. This is typically a percentage of the franchise’s gross revenue and is used to fund corporate support services like advertising, training, and operational support.
- Training and Support: Franchisors typically offer extensive training programs to ensure that franchisees are equipped to run the business effectively. This training might include everything from how to make the bubble tea to how to manage the store’s finances. Additionally, franchisors often provide ongoing support in areas such as marketing, supply chain management, and product development.
- Location: Franchisees typically receive help from the franchisor in finding and securing a suitable location for the store. The franchisor may provide guidelines or requirements for the location to ensure it fits with the brand’s image and target market.
- Operational Guidelines: Franchises operate under specific guidelines provided by the franchisor. These guidelines cover everything from store design and layout to the types of products that can be sold. These standards are designed to ensure consistency across all franchises.
- Marketing and Advertising: Franchisors often manage large-scale marketing and advertising efforts on behalf of the entire franchise network. They may also provide guidance or resources to franchisees for local marketing efforts.
- Supply Chain: Franchisors typically have established relationships with suppliers, which franchisees can take advantage of. This can result in cost savings and ensures consistency in the products used and sold across all franchise locations.
Owning a bubble tea franchise can be a lucrative opportunity for those interested in this trendy and popular beverage. It offers the chance to own a business with an established brand and a proven business model, while still enjoying the autonomy of being a business owner. However, it’s important to carefully consider the costs and commitments involved before deciding to invest in a franchise.
Why You Should Consider a Bubble Tea Franchise
If you’re interested in starting a business in 2023, here are some reasons to consider a franchise bubble tea shop:
- Stand out in a crowded beverage industry: Bubble tea is a unique offering in many U.S. cities. Though lots of these businesses also offer other specialty beverages like coffees and teas, a bubble tea shop is likely to get noticed.
- Build brand recognition: Thanks to having franchises in other markets around the country, some people are likely to already know of major bubble tea brands. So you shouldn’t have to work as hard to build trust and recognition.
- Get up and running quickly: Franchises offer proven systems and support with tasks like site selection and training. So you don’t have to figure these elements out on your own.
- Access to proven business systems: Once you’ve launched, they also provide support with marketing materials, inventory, and equipment purchases.
- Expand your offerings: Bubble tea shops often provide additional food and beverage options as well. So this may be the ideal way to break into the beverage world with a small shop.
Our Methodology: The Top Bubble Tea Franchises
In guiding entrepreneurs towards making informed decisions about bubble tea franchise investments, we use a detailed set of evaluation criteria. Each criterion is rated on a scale from 1 to 5, where 1 indicates the least importance and 5 signifies the highest importance in our assessment process:
- Market Demand and Trend Analysis
- Importance: 5
- We evaluate the current and projected market demand for bubble tea. The popularity and trend growth of the product in targeted areas are crucial indicators of potential success.
- Franchise Cost and Financial Requirements
- Importance: 4
- The initial investment, including franchise fees and setup costs, is a significant consideration. We assess the affordability and value for money of the franchise opportunity.
- Brand Recognition and Reputation
- Importance: 5
- A franchise with strong brand recognition can attract more customers. We look at the franchise’s market presence, customer reviews, and overall brand reputation.
- Quality and Variety of Products
- Importance: 4
- The quality of the bubble tea and the variety of flavors and options offered are important for customer satisfaction and repeat business.
- Training and Franchisee Support
- Importance: 4
- We consider the level of training and ongoing support provided by the franchisor, including marketing, operational guidance, and assistance in establishing the business.
- Operational Efficiency and Technology
- Importance: 3
- Efficient operations and the use of technology in managing the business can significantly impact profitability. This includes inventory management, sales tracking, and customer service systems.
- Compliance and Regulatory Considerations
- Importance: 3
- Understanding the health and safety regulations, as well as any specific food industry compliance requirements, is essential for the lawful operation of the franchise.
- Location and Territory Rights
- Importance: 4
- The success of a bubble tea franchise can heavily depend on location. We assess the franchisor’s policies on territory rights and location assistance.
By employing these criteria, our aim is to identify bubble tea franchise opportunities that offer a strong potential for profitability, align with market trends, and provide comprehensive support and resources for franchisees.
Top Bubble Tea Franchises
If you’re ready to start a bubble tea business, there are plenty of brands offering new franchise locations around the U.S. Here are some top bubble tea franchise opportunities to consider.
1. Kung Fu Tea
Kung Fu Tea is a popular brand with more than 2002 stores around the U.S. The company offers a ten-step process for getting your own bubble tea shop off the ground. And they offer multiple store models, from traditional storefronts to those located in airports and shopping centers. Upfront costs range from $140,000 to $422,000 for a traditional store.
2. Tapioca Express
Tapioca Express currently has about 29 franchise locations in the U.S., mainly along the West Coast. The company provides a wide array of startup support services, from location selection to employee training. Getting started costs anywhere from about $200,000 to $527,000.
3. Gong Cha
Gong Cha is a bubble tea franchise that originally launched in Taiwan. Stores offer fresh tea sourced from Taiwan and tapioca pearls made from the finest ingredients. The company is currently seeking new franchisees in a number of quality locations, mainly in the Northeast. Estimated startup costs range from $177,430 to $335,400 for a single unit.
4. Bubbleology
Bubbleology is a small franchise business that offers boba, waffles, and various fruit-flavored milk teas. The recognized brand looks for experienced retail operators to develop exclusive territories across the U.S. The company only has a few locations currently, so there are many open territories available, with estimated upfront costs falling between $205,850 and $458,950.
5. Sharetea
Sharetea offers a variety of beverages, including traditional tea, milk tea, blended drinks, and fruit juices. The company originally launched in 1992 and has more than 150 stores across North America. So there’s plenty of brand recognition, but still room for growth in popular markets. Startup costs vary, starting around $300,000.
6. Koi Tea
Koi Tea offers a bubble tea franchising opportunity for those with food service and/or retail experience. Each boba shop offers a variety of tea drinks as well as rolled ice cream and other treats. The initial investment ranges from about $200,000 to $500,000.
7. Ding Tea
Ding Tea is a global brand offering franchise opportunities in the U.S. The company simply requires franchisees to be at least 20 years old, have some business experience, and be passionate about the tea industry. The initial investment ranges from about $123,000 to $422,000.
8. CUPP Bubble Tea
CUPP Bubble Tea is a U.K.-based bubble tea brand. There aren’t currently any locations in the U.S. But the company offers an international master franchise program for those interested in opening the first bubble tea franchises in a new country. Costs for a new store start at £80,000. But international franchises are likely to incur extra costs since they are responsible for entire territories.
9. Bambu
Bambu is a dessert and tea franchise offering boba tea, coffee, and exotic fruit smoothies. There are several locations spread throughout the country, but still room for growth in many in-demand markets. The initial investment falls between $137,000 and $321,000.
10. HTeaO
HTeaO originally launched in Texas in 2009. Stores focus on flavored iced teas, blended drinks, and coffee. And the initial investment ranges from $289,200 to $859,000.
| Franchise | Number of Locations in the U.S. | Cost Range | Unique Aspects |
|---|---|---|---|
| Kung Fu Tea | Over 2002 | $140,000 - $422,000 | Offers multiple store models |
| Tapioca Express | 29 | $200,000 - $527,000 | Provides wide array of startup support services |
| Gong Cha | Not Specified | $177,430 - $335,400 | Originated from Taiwan, seeking franchisees mainly in the Northeast |
| Bubbleology | Few | $205,850 - $458,950 | Many open territories available |
| Sharetea | Over 150 | From $300,000 | Variety of beverages available |
| Koi Tea | Not Specified | $200,000 - $500,000 | Franchising opportunity for those with food service and/or retail experience |
| Ding Tea | Not Specified | $123,000 - $422,000 | Global brand, minimal requirements for franchisees |
| CUPP Bubble Tea | None | From £80,000 (UK-based) | Offers international master franchise program |
| Bambu | Several | $137,000 - $321,000 | Offers tea, coffee, and exotic fruit smoothies |
| HTeaO | Not Specified | $289,200 - $859,000 | Focus on flavored iced teas, blended drinks, and coffee |
How to Choose the Best Franchise to Start Your Bubble Tea Business
If you’ve decided that a bubble tea franchise is right for you, there are many businesses to consider. Here are some tips for making the best decision for your goals.
Consider Your Budget
How much money do you have to dedicate to a franchise fee and other upfront costs? Many companies also require new franchisees to have a certain net worth to meet ongoing costs until the store becomes profitable.
Research Your Local Market
What bubble tea businesses already have a location in your area? If you can offer something new, your franchise may be more likely to stand out. Additionally, if you’re interested in eventually expanding with a multi-unit development, consider a brand with lots of open territory near you.
Look at the Support Systems
Each franchise system offers different types of support, from marketing to helping design store layouts. Think about the elements of operating a business that you need the most help with, and consider the opportunities that provide help in those important areas.
Dig Into the Finances
Aside from your initial investment, research ongoing expenses for each franchise, along with potential earnings. Each model should provide financial data in their franchise disclosure documentation.
How much does it cost to start a boba tea franchise?
Each boba tea franchise has its own costs, which also vary by location. However, most brands estimate the initial investment to fall between $200,000 and $500,000. You probably won’t find many bubble tea shops when searching for franchises under 10k or even franchises under 20k. A few franchises offering a kiosk or mobile model may fall near the range of franchises under 50k.
Is a bubble tea franchise profitable?
As is the case with nearly any industry, some bubble tea franchises are profitable, while others are not. However, this business model certainly can bring in significant income. Many franchise owners report profit margins of 20 to 30 percent. Check the list above for some of the most profitable franchises in the bubble tea industry.
Image: Envato Elements
This article, "10 Bubble Tea Franchise Opportunities in 2023" was first published on Small Business Trends
