Sharetea Franchise Cost and Fees (2024)
Sharetea Franchise is a renowned bubble tea brand that has captivated the taste buds of millions across the globe. With its origins rooted in Taiwan, Sharetea has become synonymous with high-quality and authentic bubble tea experiences. From its humble beginnings as a small shop in Taipei, Sharetea has grown into an international phenomenon, spreading its delicious concoctions to over 400 stores worldwide.
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Sharetea Franchise Cost and Fees (2023)
In 1992, Cheng Kai-Lung, who had been working as a director in the film and TV industry, made the bold decision to leave his job and pursue his own tea street vendor business. Despite facing numerous challenges initially, he remained determined and held onto his belief that great things happen when you have unwavering faith. Through sheer dedication and hard work, Sharetea soon gained popularity among customers, leading to the establishment of its first store.
How is Sharetea Franchise Positioned in the Food and Beverage Industry?
This franchise is positioned as a leading player in the food and beverage industry, specifically in the bubble tea market. With over 400 stores worldwide, Sharetea has established itself as a global brand known for its high-quality and authentic bubble tea offerings.
Furthermore, with its origins rooted in Taiwan, Sharetea benefits from being associated with the birthplace of bubble tea. This adds authenticity and credibility to their brand image.
Overall, Sharetea Franchise has positioned itself as a reputable player in the food and beverage industry by offering high-quality products with broad appeal and leveraging its Taiwanese heritage.
How Much is a Sharetea Franchise?
The initial Franchise Fee is $12,000 to $13,500. You have to pay this upfront fee when opening a Sharetea franchise.
Sharetea Franchise Cost
The estimated total investment necessary to begin the operation of a Sharetea Franchise ranges from $295,900 to $502,300. The following costs are part of the upfront costs included in the initial investment for a Sharetea. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy a Sharetea franchise in 2023.
Estimated Initial Investment
| Type of Expenditure | Amount |
|---|---|
| Franchise Fee | $12,000 to $13,500 |
| Technology Transfer Fee | $19,200 to $21,600 |
| Opening Support Fee | $7,200 to $8,100 |
| Design and Floor Plan Fee | $9,600 to $10,800 |
| Refundable Security Deposit | $10,000 |
| Minimum Royalty Fee | $3,600 |
| Related Personnel Cost for initial training | $6,300 |
| Additional Training | $0 |
| Equipment | $45,000 to $57,000 |
| Utensils | $2,500 to $3,300 |
| Rent for the Tea Shop | $2,000 to $10,000 |
| Rent for Warehouse | $0 to $5,000 |
| Renovation | $55,000 to $200,000 |
| Opening Inventory | $43,000 to $46,000 |
| Licenses, Permits, Fees and Deposit | $12,000 |
| Point of Sale System | $2,100 |
| Office Equipment & Supplies | $1,500 |
| Uniforms | $2,000 |
| Insurance | $4,500 to $15,000 |
| Advertisement | $2,000 |
| Additional Funds – 3 Months | $56,400 to $72,500 |
Sharetea Franchise Requirements
The minimum liquid capital required to open a franchise is $100,000 USD, and the minimum total investment is $300,000 USD.
Owning a Sharetea Franchise Requires Ongoing Fees
Royalty: 6% of the Gross Monthly Sales, minimum $1,200 per month
Marketing Fee: A certain percentage of Gross Monthly Sales not yet determined. Sharetea estimated it to be approximately 3% of the gross monthly sales.
How much do Sharetea franchise owners make?
Sharetea does not include any financials. Instead saying, “The FTC’s Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the Franchise Disclosure Document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) 39 a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.”
However, the franchisor, Lillian LLC, made $2,461,191 in royalty fee revenue in 2021. Spread across 99 locations at a 6% royalty rate, the Average Unit Volume (AUV) of a Sharetea location is $414,341.
2021 Sharetea AUV Franchise Sales: $415,000
2021 Sharetea Median Franchise Sales: $415,000
| Initial Investment (Midpoint) | % Profit Margin of Average Franchise Sales | Estimated Profits | Time to Recoup Investment |
|---|---|---|---|
| $400,000 | 10% | $41,500 | 11 years |
| $400,000 | 15% | $62,250 | 8 years |
| $400,000 | 20% | $83,000 | 6.5 years |
Based on the median sales provided by Sharetea’s franchise locations, at an average of a 15% profit margin it will take around 8 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.
Many factors affect the sales, costs, and expenses of your Franchised Store. Such as the Franchised Store’s size, geographic location, menu mix, and competition in the marketplace. The presence of other Food and Beverage stores; the extent of market penetration and brand awareness that Sharetea stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.
Is the Sharetea Franchise Profit Worth the Franchise Cost?
To assign a valuation multiple for Sharetea franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.
Estimated Selling Price = Net Sales * 0.55
When you go to sell a Sharetea franchise based on the median multiple of .55 and net sales of $415,000, it would sell for $228,250. This is significantly lower than the midpoint investment of $400,000.
The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators.
How many Sharetea units have opened and closed?
How many Sharetea units have opened and closed?
How many Sharetea units have opened and closed?
How many Sharetea units have opened and closed?
| Outlet Type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2019 | 54 | 83 | +29 |
| 2020 | 83 | 99 | +16 | |
| 2021 | 99 | 124 | +25 | |
| Company Owned | 2019 | 0 | 0 | 0 |
| 2020 | 0 | 0 | 0 | |
| 2021 | 0 | 0 | 0 | |
| Total Outlets | 2019 | 54 | 83 | +29 |
| 2020 | 83 | 99 | +16 | |
| 2021 | 99 | 124 | +25 |
Over the last three years, Sharetea has grown from 54 to 124 locations across the United States. The yearly average growth rate is about 23 new franchises per year.
Summary
Sharetea is a well-established franchise in the bubble tea market, known for its high-quality and authentic offerings. With over 400 stores worldwide, Sharetea has positioned itself as a reputable player in the food and beverage industry.
The initial franchise fee for opening a Sharetea store ranges from $12,000 to $13,500, with an estimated total investment of $295,900 to $502,300. Franchise owners are also required to pay ongoing fees such as royalties (6% of gross monthly sales) and marketing fees (approximately 3% of gross monthly sales).
Overall, while Sharetea offers an opportunity to enter into the popular bubble tea market with an established brand name and support system, potential franchisees should carefully evaluate their financial expectations and consider factors that may impact profitability before investing.
While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and in the Food and Beverage industry.
