Sharetea Franchise in 2024: Costs, Fee & FDD
Discover whether investing in a Sharetea franchise is the right move for you. Learn about the costs, key benefits, and potential challenges in this fast-growing bubble tea market. Read here to explore more about Sharetea’s franchise opportunity!
Table of Contents:
Sharetea is a bubble tea franchise that has become a prominent player in the global beverage industry. Founded in 1992 by Cheng Kai-Lung in Taipei, Taiwan, the brand originally started by offering black tea and pearl milk tea, which became instant hits. Cheng’s vision was simple: bring authentic Taiwanese bubble tea to a broader audience. Over the years, Sharetea has grown from its humble beginnings into one of the most recognized bubble tea brands worldwide, known for its high-quality ingredients and consistent taste.
The franchise’s core offerings include a wide variety of bubble teas, from milk teas and fruit teas to refreshing ice-blended drinks. Sharetea is particularly known for its customizable beverages, where customers can choose their sweetness levels, types of tea, and toppings like boba pearls, pudding, and grass jelly. While its primary focus is on bubble tea, the franchise also offers smoothies and snacks in select locations. The core customer base includes teenagers, young adults, and anyone who enjoys trendy, customizable drinks—especially in urban areas and college towns.
As of now, Sharetea operates more than 500 locations across 18 countries, including the U.S., Canada, Australia, and parts of Europe. In the U.S., the franchise has rapidly expanded to meet the growing demand for bubble tea, a trend that shows no signs of slowing down. With millions of customers served daily, Sharetea has positioned itself as a go-to brand for bubble tea lovers worldwide.
Franchisees benefit from a comprehensive support system. This includes a thorough training program that covers drink preparation, customer service, and store management. Additionally, Sharetea provides marketing support, product innovation updates, and access to its global supply chain, ensuring consistency across all locations. Franchisees also receive ongoing operational assistance to maintain the brand’s high standards, making it an attractive option for potential investors.
Sharetea Franchise Insights
- Sharetea achieved an impressive 11% year-over-year unit growth, outpacing the broader industry, which experienced 0% growth during the same period.
- Sharetea franchises typically attract younger demographics, with a strong customer base of millennials and Gen Z, who drive the demand for customizable beverages.
- Sharetea stores typically require smaller footprints compared to full-service restaurants, which lowers overhead costs and makes it easier to operate in high-traffic areas.
- Sharetea’s customizable drink options, including sweetness levels and toppings, give it a competitive edge, catering to diverse customer preferences and driving repeat business.
Sharetea Franchise Key indicators
Growth YOY (%)
11%
vs industry 0%
Total U.S. Franchised Units
161
3-Year Failure Rate
5%
vs industry 10%
Total Investment
$296K-$502K
How much does it cost to open a Sharetea franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Sharetea franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Sharetea franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Sharetea below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Franchise Fee | $12,000 | $13,500 |
| Technology Transfer Fee | $19,200 | $21,600 |
| Opening Support Fee | $7,200 | $8,100 |
| Design and Floor Plan Fee | $9,600 | $10,800 |
| Refundable Security Deposit | $10,000 | $10,000 |
| Minimum Royalty Fee | $3,600 | $3,600 |
| Related Personnel Cost for Initial Training | $6,300 | $6,300 |
| Additional Training | $0 | $0 |
| Equipment | $45,000 | $57,000 |
| Utensils | $2,500 | $3,300 |
| Rent for the Tea Shop | $2,000 | $10,000 |
| Rental for Warehouse | $0 | $5,000 |
| Renovation | $55,000 | $200,000 |
| Opening Inventory | $43,000 | $46,000 |
| Licenses, Permits, Fees, and Deposit | $12,000 | $12,000 |
| Point of Sale System | $2,100 | $2,100 |
| Office Equipment & Supplies | $1,500 | $1,500 |
| Uniforms | $2,000 | $2,000 |
| Insurance | $4,500 | $15,000 |
| Advertisement | $2,000 | $2,000 |
| Additional Funds (3 Months) | $56,400 | $72,500 |
| Total Investment | $295,900 | $502,300 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open a Sharetea franchise or a similar franchise in the bubble tea industry, the required capital typically involves both the initial investment costs and financial requirements set by the franchisor. Let’s take a closer look below:
- Initial Investment The total estimated initial investment for a Sharetea franchise can range from approximately $296,000 to $502,000, depending on the location, store size, and specific market conditions. This includes the franchise fee, build-out costs, equipment, initial inventory, and other startup expenses. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
- Liquid Assets Requirement Sharetea generally requires franchisees to have a minimum of $100,000 to $150,000 in liquid assets. This ensures the franchisee can manage any unforeseen costs or delays during the initial phase of operations.
- Net Worth Requirement While specific numbers for Sharetea are not always readily available, it’s estimated that a net worth of $300,000 to $500,000 is recommended. This includes assets like real estate, investments, and personal property, minus any liabilities.
How much does a Sharetea franchise owner make?
Calculating the salary of a Sharetea franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Sharetea franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Sharetea Revenue & Gross Sales
While specific revenue figures for Sharetea franchises are not publicly disclosed, the franchise is recognized for its strong financial performance due to its trendy bubble tea offerings and high customer demand. Generally, beverage franchises like Sharetea can achieve impressive sales figures when located in busy, high-traffic areas, particularly in urban and college town settings. By maintaining consistent product quality and capitalizing on the brand’s growing popularity, franchise owners have the potential to generate substantial revenue and see rewarding returns on their investments.
Which key factors impact the average revenue performance of Sharetea franchisees?
The performance of U.S. Sharetea franchisee median gross sales this past year compared to the prior year is likely influenced by several factors. One key factor is the increasing popularity of bubble tea, particularly among younger demographics, which has driven foot traffic and sales. Additionally, Sharetea’s ability to innovate and introduce new flavors and customizable options may have attracted repeat customers and expanded its market reach. The post-pandemic recovery also likely played a role, with more people returning to social settings and seeking out trendy, experiential beverages. Franchisees located in high-traffic urban areas or near college campuses likely benefited the most from these trends, contributing to stronger sales performance.
Sharetea Franchise Operational Costs
If you were to open a Sharetea franchise, the key primary ongoing operational costs you should consider include:
- Ingredient and Supply Costs Bubble tea ingredients like tea leaves, boba, fruit syrups, and toppings need to be replenished regularly, along with other consumables like cups, straws, and lids.
- Staffing Costs Wages for your employees, including baristas and support staff, as well as any benefits or overtime pay.
- Rent and Utilities Lease payments for the store space, along with utilities like electricity, water, and internet, which are essential for daily operations.
- Equipment Maintenance Regular upkeep and servicing of tea brewing machines, refrigerators, and other kitchen equipment to ensure smooth operations.
- Marketing and Local Advertising Costs for local promotions, social media ads, or collaborations to attract and retain customers.
- Inventory Management Ensuring stock levels are maintained, which might involve costs related to inventory software or systems.
If you’re excited about diving into the bubble tea market with Sharetea, these ongoing operational costs are key to consider as you plan for long-term success. With the right location, management, and attention to detail, Sharetea offers a promising opportunity. Let me know if you have any more questions!
Sharetea Franchise Fees
Here’s a breakdown of the key ongoing fees associated with a Sharetea franchise:
- Royalty Fees 6% of the gross monthly sales, with a minimum of $1,200 per month.
- Marketing Fund Contributions Estimated to be approximately 3% of the gross monthly sales.
- Additional Fees There might be other fees related to marketing, equipment maintenance, or support services that vary by location and agreement.
Make sure to review the franchise disclosure document (FDD) thoroughly to understand all potential ongoing costs and fees. Let me know if you’d like more details!
Sharetea Franchise Earnings
While specific earnings data for Sharetea franchises is not publicly available, we can provide an informed overview based on industry standards and the franchise’s characteristics. Sharetea, with its growing global presence and popular bubble tea offerings, has the potential to generate strong revenue in the fast-casual beverage sector. Factors like location, foot traffic, and effective operational management are critical in shaping a franchise’s financial success.
Industry benchmarks for similar beverage franchises show that gross sales can vary significantly, with high-traffic and well-managed locations achieving impressive figures. The initial investment and ongoing costs, such as royalty and marketing fees, should be factored in when projecting potential earnings. Sharetea’s robust support system and comprehensive training programs position franchisees for success, enhancing profitability potential.
Prospective franchisees should conduct thorough market research, considering variables such as local competition and demographic preferences. By capitalizing on Sharetea’s brand appeal and following operational best practices, a Sharetea franchise can become a profitable investment. Consulting with existing franchisees and financial advisors is highly recommended to gain realistic expectations for earnings.
How to Open a Sharetea Franchise
Here is a general outline of the process and steps involved in becoming a Sharetea franchisee, from the initial inquiry to starting operations:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Franchise Application After the initial inquiry, you’ll be asked to complete a formal franchise application. This involves providing details about your background, financial capacity, and reasons for wanting to open a Sharetea franchise.
- Interview and Discovery Day You may be invited to an interview or attend a Discovery Day at Sharetea’s headquarters. This event allows you to meet the team, learn more about the brand’s operations, and assess if the franchise is the right fit for you.
- Franchise Agreement Signing If both parties are satisfied, the next step is to sign the franchise agreement. This contract finalizes your commitment to the franchise and includes terms such as fees, territorial rights, and obligations.
- Securing Financing and Location After signing the agreement, you’ll need to secure financing for your franchise investment and begin searching for an ideal store location. Sharetea provides guidelines on what to look for in terms of store size and location demographics.
- Store Build-Out and Setup With a location secured, you will oversee the store build-out, including design, equipment installation, and décor, following Sharetea’s guidelines. Sharetea often assists with vendors and design approvals.
- Training Program Before your store opens, you’ll participate in Sharetea’s comprehensive training program, covering everything from product preparation to customer service and management.
- Pre-Opening Marketing Sharetea typically helps with local marketing efforts to build anticipation and attract customers before your grand opening.
- Grand Opening and Operations Once everything is set up and approved, you can open your Sharetea location to the public. Afterward, you’ll continue to receive support from Sharetea, including ongoing operational assistance and marketing support.
Pros & Cons
Pros
Growing Industry: Bubble tea is a rapidly expanding market, with increasing demand among younger demographics, especially in urban areas.
Customizable Menu: Sharetea’s wide variety of drinks and customization options attract repeat customers and cater to diverse tastes, boosting customer loyalty.
Global Brand Recognition: With over 500 locations in 18 countries, Sharetea has strong brand visibility, making it easier to attract customers.
Affordable Initial Investment: Compared to other franchises, Sharetea offers a relatively lower initial investment, making it more accessible to potential franchisees.
Cons
Highly Competitive Market: The bubble tea industry is saturated in some regions, meaning you could face tough competition from other local and national bubble tea brands.
Limited Menu Flexibility: While the customization options are great, the core focus on bubble tea may limit your ability to diversify the product offering, which could affect sales in areas with lower demand.
Profit Margins Can Vary: Success heavily depends on location and customer traffic, so franchises in lower-traffic areas may struggle with profitability.
Labor-Intensive Operations: Preparing bubble tea requires precision and multiple steps, which can lead to higher labor costs and slower service if not efficiently managed.
