Review of the Boba Tea Franchise Opp and Startup Costs

Boba tea, which is also called “bubble tea,” was invented in Thailand in the 1980’s by local tea shops. It’s basically just tea mixed with tapioca pearls, making for a refreshing, sweet, almost smoothie like experience that can be quite addictive! Because it is one of the fastest growing drinks in popularity right now, finding the right boba tea franchise opportunity could be a wise investment for you.

There are several opportunities available right now to examine. Not one single company dominates this market, and since the Boba Tea Company itself isn’t accepted franchisees right now, it makes sense to look at the alternatives. Here there are, in no particular order:

It’s Boba Time

Providing 60 hours of instruction on how to manage the workflow of your business, the California-based bubble tea maker is looking at franchise opportunities across the sunshine belt of the United States. According to recent data, only 5% of franchise businesses are closed each year and nearly 90% of all franchise business are still in open 5 years down the road. This franchise’s secret to success is not to focus on the bubble tea, which cycles through popularity, but to have a wide array of beverages, including coffee and smoothies, available for customer consumption.

Each application for a franchise is evaluated on an individual basis. There are requirements for your location to look similar to the home store location, which may mean additional investments in construction, building permits, and other storefront appearance costs. The typical franchise has a location that is between 800 to 1500 square feet.

Lollicup

Lollicup is an established name in the Western United States because of their unique coffee and tea products. As one of the first to serve boba tea, many who are interested in started a franchise that serves this product tend to come to Lollicup for franchise opportunities before going elsewhere. At this moment, however, Lollicup isn’t extending any franchise opportunities to new owner/operators, but what they will do is help you to establish your own private brand of Boba tea in your community if you wish.

Being an independent owner in this field can be difficult, but with Lollicup on your side it doesn’t have to be. They can wholesale you products and get you access to purchasing and sales opportunities that aren’t necessarily available to anyone else. If you’re willing to work on building your own brand, a partnership with Lollicup makes sense in a lot of ways.

Boba Loca USA

Based in Reno, NV, Boba Loca USA is perhaps the most aggressive organization seeking to franchise Boba tea right now. That really helps potential investors or owner/operators get their hands on a growing business name because this organization wants 80 new franchises within the next three years.

The franchise terms, however, are not long-term. For those who are looking to test out a market with bubble tea, however, this opportunity makes sense. Available with 2 year and 5 year franchise options with renewals, an initial investment as little as $89,000 could help make this franchise a local reality! There are monthly royalties and fees to consider aside from the initial investment into the name. Instead of a 5% royalty, it is broken up into these categories:

• a 4% monthly royalty or a minimum of $495 per month, whichever is higher, and
• a 1% marketing fund fee, or $175 per month, whichever is higher.

These fees begin on the very first month of your new franchise operation and are required to maintain the franchise, so having capital available to cover these fees if initial sales aren’t high enough to cover them is mandatory. Cash liquidity and net worth are evaluated by Boba Loca USA on an individualized basis.

TengFei Inc

Operating under the franchise name Jasmine Smoothie World and Bubble Tea, TengFei Inc. has a primarily East Coast focus for additional franchises in this market. Their franchise terms are very straight-forward:

• The franchise fees for the Jasmine name are $65,000 for a five year business operation agreement. A security deposit of $12,000 is also required with this investment.
• A 10 year business operation agreement is also available for $130,000 with a security deposit of $37,000.
• Unlike other franchise operations that train you first and then make you do all the setup work, TengFei supplies all the store set up, provides free training, and will install all the necessary small appliances that your business needs that are up to code.
• TengFei also supplies all the ingredients and products for your organization.

The one primary hesitation with this franchising opportunity is the fact that many of the Jasmine storefronts are in highly competitive and extremely expensive mall space.

Is Starting a Boba Tea Franchise the Right Choice To Make?

Before considering a Boba tea franchise, extensive market research needs to be done in your local community to determine if it would be successful. In many areas of the United States, bubble tea is falling out of popularity and even though there are always raving reviews and return customers, a business needs sustained returns in order to survive. For that reason, many stores are offering sandwiches, coffee, smoothies, and even pudding as product alternatives in order to remain afloat.

When paired with the right opportunity, a Boba tea company franchise could be the right investment to make, but it is one of opportunities that is more of a gamble than others are right now. Many former franchisers, like Lollicup, are specifically encouraging startups to establish their own brand because there just isn’t growth in this field as there was a decade ago.

There are franchise opportunities available, however, and if you’re ready to invest and begin your own business opportunity, they’re ready to help you out. The companies listed above are your best options to begin your own boba tea company franchise, so begin the process today by filling out their discovery forms, learn more about this wonderful mixture of tapioca pearls and tea, and create a great investment opportunity!