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Value to Begin a Sharetea Franchise?


Sharetea is a tea business that is developing its presence in countries all over the world. The business focuses on offering premium bubble tea with over 30 years of industry experience. Sharetea brings a demonstrated track record of business development, as well as a progressive investment return on capital, to the franchise industry. The company itself was founded in Taiwan in 1992 and prides itself on offering customers some of the highest quality beverages available.

Sharetea offers a straightforward business opportunity for entrepreneurs that may be pursued in a variety of areas throughout the globe. In this article, we will discuss Sharetea and the franchise opportunities they offer. By the end of this post, you will have the basic understanding you need to begin exploring opening your own Sharetea franchise on a more in-depth level. In this post, we’ll cover the following in detail:

What Exactly is a Sharetea Franchise?

When Cheng Kai-Lung first started the bubble tea business that would later bear his name in 1992, he worked in the film and television industries as a director. Sharetea was his brainchild! The Sharetea was a hit with the audience as a result of all of his labor, and this led to the establishment of the very first Sharetea shop.

The goal of Sharetea is to educate people all around the globe about the tradition of drinking tea in Taiwan in its purest form. The company’s slogan is all about sharing wonderful beverages, love, happiness, and health with all of its customers, which is where the name “Sharetea” comes from. At Sharetea, the mission is to delight those who are passionate about milk tea by providing beverages of the highest possible quality. Many of the ingredients and tea leaves utilized by Sharetea franchises are shipped directly from Taiwan to maintain the consistency of Shareteas offering.

The bubble tea shop prides itself on having simple and accessible operations that any small business owner can get involved with. The organization is committed to providing its franchisees with high-quality maintenance, administration, and expansion services. Indeed, the majority of their franchisees own more than one location, using the backing of the company to start building their own chain of Sharetea franchises.

Franchise owners who join up with Sharetea get extensive training as well as continuing assistance for the operations of their businesses. As a direct consequence of this, each and every one of Sharetea’s drinks is crafted using only the newest, purest, and most natural ingredients that can be sourced.

The franchise has offered enough support in order to guarantee the product’s quality. Sharetea’s primary objective is to satisfy the needs of its consumers by offering milk teas of superior quality at competitive costs.

Join such a rapidly expanding bubble tea brand globally if you want to serve the community with quality and boldness and if you share the same passion and goal as the corporation that owns the brand.

Opening a Sharetea Franchise

Sharetea is now the number 1 bubble tea store in California and continues to expand in the United States. It is currently one of the most well-known and well-liked brands of boba tea in the Bay Area and San Francisco.

Sharetea Franchise Requirements

  1. Confidence in oneself and commitment to one’s profession
  1. A strong affection for the brand, in addition to having outstanding work ethics and responsibility
  2. Depending on the size and location of the shop, the total cost of opening a franchise might vary anywhere from $386,900 to $492,200.
  3. A desire to maintain Taiwanese cultural traditions

How Much Does It Cost to Start a Sharetea Franchise?

The startup costs needed to launch a Sharetea franchise begins at a minimum of $386,900 and may go as high as $492,200. There is a requirement of a minimum net worth of $300,000.

The first franchise fee charged by the Sharetea firm might be up to $48,000. The royalty fee is a 6% cut of the total revenue, with a minimum payment of $1,200. Prospective franchisees may need to get in touch with the organization in order to get an exhaustive financial structure. That said, whenever you begin the process of reaching out to the franchisor to inquire about opening your own location, they will provide you with all the fine details that you will need to know. The following is just an idea of what you can expect if you are interested in starting a Sharetea franchise.

Cost Type

Amount

Franchise Fee

$48,000

Franchise Cost

$386,900 to $492,200

Royalty Fee

6%

Advertising Fee

1-2.5%

Term of Agreement

5 years

Renewable

Yes

Renewal Franchise Fees

50% of Initial Franchise Fees

Training for the Sharetea Franchise

The best bubble tea brand has an outstanding support structure in place, which will guarantee the success of the new franchise opportunities being offered by the company. They provide extensive training and handouts, including both hands-on and classroom-style instruction, both before and after the shop officially opens its doors for business.

The training program lasts for many hours and is presented in two different settings: in a classroom setting and in an on-the-job setting.

Sharetea is also able to assist with the purchase of real estate as well as buildings. They are also in charge of all specialized help offered throughout the process of opening, as well as continuous counseling services that are designed to aid you in beginning your own Sharetea bubble tea company.

Operational Logistics of a Sharetea Franchise

You will be provided with assistance from the firm if you choose to become a Share tea franchisee. In addition, there is a section inside the corporation that is in charge of ensuring that clients from all over the globe get safe food.

A knowledgeable crew will be responsible for ensuring the tea’s high quality and will provide assistance to franchisees who are looking to innovate.

Supervisors make regular trips to the shops they oversee in order to check on aspects such as quality, service, cleanliness, and management, as well as to provide assistance with issue-solving and to guarantee that the store is on track to fulfill its sales quota.

What Is the Initial Term Requirement of a Sharetea Franchise?

The Sharetea franchise agreement calls for an initial term duration of five years. If franchisees meet the standards set for them, they will be considered for renewal. Current franchisees have the option of extending their agreement for a further five years if they want to keep their business.

Is There a Financial Aid Program Available via the Sharetea Franchise?

The organization does not provide direct financing for franchise purchases. The franchisor of the organization cannot give any kind of lease or note obligation as a guarantee for the franchisee.

To cover start-up expenses, inventory, equipment, payroll, and accounts receivable, the firm may offer funding from a third party so long as it maintains a connection with an investor. There is a possibility that funding from the SBA may be obtained to help with the acquisition of a franchise.

Pros of a Sharetea Franchise

Sharetea is a brand that has a lot to offer in terms of tea, and it is worth looking into. The followings are some advantages of engaging in a business that focuses on tea:

High Rate of Return on Initial Investment

One of the biggest advantages of investing in a Sharetea franchise is the potential for a high rate of return on your initial investment. Sharetea is a well-established brand with a proven track record of success, which means that franchisees can expect to see a strong return on their investment over time.

Demonstrated History of Profit and Expansion

Sharetea has a demonstrated history of profit expansion, which means that franchisees can expect to see their businesses grow and become more profitable over time. This can be attributed to the brand’s reputation and popularity among consumers, as well as its effective marketing strategies and business models.

Easy to Operate, Maintain, and Expand

Sharetea’s business model is easy to use, maintain, and expand. This makes it easy for franchisees to run their businesses, even if they have little experience in the food and beverage industry. There are not a lot of components involved in making tea and serving it to customers. Unlike with some restaurant franchises – which can be very involved and challenging to operate (such as McDonald’s) – Sharetea franchises are relatively straightforward and easy to understand.

ShareTea also provides all-encompassing educational programs and continuous logistical assistance to its franchisees throughout their time as franchise owners. That way, there is always a support structure you can lean back on. This means that franchisees will have access to a wealth of resources and support to help them run their businesses effectively.

Cons of a Sharetea Franchise

Apart from the investment, there are certainly other challenges in the Tea franchise opportunity. Here are some of them:

Another disadvantage of a Sharetea franchise is that the menu options may be limited, which can make it challenging for franchisees to differentiate their businesses from competitors. This can make it more difficult to attract and retain customers, especially in areas with a lot of competition.

Further, the limited number of options can limit the number of potential customers. When you have a wider array of products, it can be easier to attract a lot of customers since there is often something for everyone. When your menu is more limited, there will often be individuals who are not interested in any of the products you are offering.

Limited Growth Potential

A Sharetea franchise may have limited growth potential compared to other business opportunities, which can make it more challenging for franchisees to expand their businesses over time. This can be especially problematic for franchisees who are looking to grow their businesses quickly or who are looking to take on multiple locations.

Aggressive Competition

Sharetea franchises – which offer bubble tea and boba as their signature products – often face stiff competition. These are not particularly hard products to make or offer, and the startup costs associated with opening a store equipped to offer such products are low. As a result, some markets can be particularly flooded, making it challenging for additional entrants to make substantial profits.

What is the Profit that the Sharetea Franchise Generates?

In the most recent version of the franchise disclosure form, Item 19, the Share tea franchise did not disclose either the Average Unit Volumes or the franchise earnings. However, the annual income of Sharetea franchise owners appears to range anywhere from $50,000 to $100,000, based on the amount of ownership they have in the business as well as the amount of effort they put into it.

To estimate the potential profit of a Sharetea franchise, we can use the average per tea selling price of $5.00, daily products sold of 200, and expected daily sales of $1000. This would result in expected weekly sales of $7000 and expected annual unit sales of $360,000. Using these numbers, we can estimate that the annual profit for a Sharetea franchise ranges from $45,000 to $64,800, depending on the profit margin.

However, it is important to note that recouping the initial investment in a Sharetea franchise can take a long time. Based on these estimates, it could take anywhere from 5.5 to 8 years to recoup the initial investment of $376,400. This is longer than the industry standard, and potential franchisees should consider this when evaluating the opportunity.

How to Secure a Sharetea Franchise

The process for securing a Sharetea franchise is relatively straightforward. First, you need to fill out an application form which is available online. This form will be used to assess your qualifications as a potential franchisee and will be reviewed by Sharetea headquarters in Taiwan.

Once your application is reviewed, Sharetea representatives will contact you via phone or email to go over all the details of the franchise opportunity. This will include information about the investment required, the training and support that will be provided, and any other relevant details.

The next step is to sign a franchise pre-contract, which will protect your exclusive right to franchise in a specific area. This means that once you have secured a pre-contract, you can start looking for a store location without having to worry about competition from other franchisees.

When you have settled on a location for your franchise business, you need to make sure that the store is from 1,000 to 1,200 square feet. This will give you enough space to run your business effectively. Once you have identified a suitable store location, you will need to negotiate a lease with the landlord.

Once you have secured the location, signed the final contract with Sharetea, and passed all the necessary qualifications, you will be ready to open your own business.

It’s important to note that Sharetea provides training and support to all its franchisees, so you will have the necessary knowledge and resources to run your business effectively. Additionally, Sharetea’s reputation and established brand can help attract a customer base to your store.

Financing Options

SBA Loans

SBA loans are a very popular resource for small businesses looking to obtain funding. SBA loans are backed by the United States federal government and offered through the Small Business Administration (SBA). Since these loans are backed by the federal government, they are considered as being less risky for lenders. This means that more borrowers are able to access these loans, and rates tend to be lower overall.

That said, the application process for SBA loans is lengthy and requires borrowers to be very diligent. Borrowers are required to submit a great deal of documentation as well as their company and personal credit histories.

One of the more popular SBA loans, and one that can be used for franchises, is their 7(a) loan. The SBA 7(a) loan is a term loan in which borrowers can receive up to $5 million. That said, SBA loans can only be used for certain pre-approved franchises, which can be found in their online franchise directory.

Term Loan

Term loans are another go-to resource for individuals looking to open up a franchise. Term loans are loans that provide borrowers with a lump sum of money upfront, which then must be paid back over time during a specific period of time. Term loans can come with both fixed and variable interest rates.

Term loans are offered by both traditional brick-and-mortar banks as well as by alternative lenders (like Biz2Credit!). Term loans offered by traditional banks tend to have lower interest rates, but their application processes are very long, and they are notoriously difficult to get on account of the high standards they have for borrowers.

Term loans from alternative lenders are significantly easier to obtain. In some cases, you can have the funds in your account in as little as 24 hours. The application processes are quick and easy. However, the interest rates tend to be higher than traditional banks since lenders cannot assess the risk of borrowers as thoroughly as traditional banks are with their drawn-out application process.

Line of Credit

Lines of credit are another popular source of financing for small businesses. Lines of credit are a set amount of money that you can borrow at any time, typically with a variable interest rate. Lines of credit remain open so that when you repay the money you borrowed, you can then borrow that amount again whenever you need it. This makes them ideal for short-term financing and shoring up cash flow in times of need.

However, lines of credit are not really designed for long-term borrowing. Instead, they are better used as gap funding or interim financing that you can use while you find a longer-term, more permanent financing solution.

Equipment Financing

Equipment financing is another popular source of financing for franchise owners. One of the great things about equipment financing is that it is generally easier to get than other forms of financing and comes with lower interest rates on average. This is because equipment financing uses that piece of equipment that you are buying as collateral. This lowers the risk for lenders since they know they will be able to sell that equipment to recover some of their funds in the event that you default. Equipment financing can be used for any equipment that you need to purchase for your franchise.

Takeaways

Sharetea is quickly increasing in the tea market in the United States and throughout the globe, making it an exciting choice for those interested in franchising opportunities. As the franchise expands, its brand and products continue to become increasingly well-known by consumers, further increasing the value and desirability of franchises.

To learn more about whether or not starting a Sharetea franchise is right for you, you might consider having conversations with existing business owners. This can give you some insight into what it takes to run a Sharetea franchise and how customer reception to new locations is. As always, research and diligence are key before making any investment. So, use this article as a launching pad to begin your exploration of Sharetea (or franchise options in general) and whether or not a franchise is right for you!

Biz2Credit

Biz2Credit is a leading supporter of small businesses and their owners throughout the nation. We take our mission and our job seriously and work each day to further our support for small business communities. As part of this, we operate our Biz2Credit Blog, where we post new articles every weekday. So, please continue to check back here for all the latest information on news, trends, and other events impacting small businesses.

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