It is interesting to notice that bubble tea, also called boba tea, has gained rather huge popularity all around the world. This delicious tapioca pearl beverage has drawn many businessmen into its production. Franchise business is another avenue when it comes to entering the bubble tea industry since people can open bubble tea franchises. It is, therefore, very important for anyone interested in the bubble tea franchise cost to understand various factors that influence the investment.

Initial Investment

Generally, there are some requirements for franchising bubble tea that cost some money. 

Here are the main expenses to consider:

Equipment and Supplies: The fixed assets include tea brewers, vending refrigerators, and sealing machine blenders. 

Store Setup: This includes hiring a building for the ceremony, the decoration of the building, as well as other construction fees. This, depending again on the location as well as size, can cost anywhere from 100,000 up to 300,000 dollars.

Initial Inventory: This will include making your initial purchases of food items for the tea, such as tea leaves for brewing, ingredients for preparing tapioca pearls, and additional treats like fruits to complement the tea and attract customers. This ordinarily ranges from 5,000 to 100,000 dollars.

Licenses and Permits: These concerns are, however, important since such businesses have to be established legally. As per the geographic location, the general price of piercing can be within the bracket of 500–2000 dollars.

Ongoing Costs

It should be noted that costs are incurred continuously when one runs a bubble tea franchise as well. Following are a few ongoing costs that may incur:

Royalties: Some franchisors demand monthly fees to be paid regularly, commonly a fixed proportion of your revenues. This is generally in the region of 5 percent to 7 percent. The nature of this movement has not altered the flow of profits, primarily because the sums involved are relatively small.

Advertising Fees: Some of the fees that franchises charge also include the costs of marketing and advertising. This can be an additional 2% to 4% of your monthly sales. 

Rent and Utilities: light, power, and rent of the store area, which you plan to use every month. This depends on the region, though it may range from 2000 to 10,000 dollars per month.

Staff Salaries: You will have to provide for your employees. To estimate the cost, you will need to consider the number of employees you will hire and the local legislation on remuneration.

Supplies and Ingredients: Ordering your ingredients and other supplies stocked up on the shelves very often. We’re expected to fall in the range of $2000 to $5000 in one month, meaning the higher the volume of sales, the lower this cost would be.

Financial Planning

To be more specific, being financially ready is highly recommended for franchising a bubble tea outlet

Here are some financial tips with which you can be prepared financially:

Create a detailed business plan. List all possible expenditures and highlight all probable income in as much as they are expected to be earned. 

Secure Funding: Look into various places you can procure the funds from; this could be the owner’s cash, a loan, or a financier. You should ensure that you have sufficient capital to finance the fixed as well as variable costs of the business during the period of operation.

Monitor Cash Flow: However, it will be better to at least keep a record of your income regularly, and the same applies to your expenses as well. This will enable you to correct an undesirable direction in monetary matters before they become serious.

Choosing the best Franchise

There is, therefore, the need to ensure that the right bubble tea franchise to partner with has been selected by the individual in question.

Here are some factors that would help you choose the best franchise: 

Brand Reputation: Select a franchise with an excellent and good image on the market. Survey the customers’ feedback, which includes the ratings given to the product.

Support and Training: This is a good assurance that the franchisor offers proper training and support from the time of signing the agreement until they can establish their franchise. It may comprise assistance at the store level, advertising, and business management.

Franchise Agreement: Even though there are rules for the franchisee and the franchisor, be sure to study the franchise agreement keenly. Such aspects as fees, geographical rights, and contract duration should be known as well.

Market Research: Ensure that you follow market research methods that will enable you to determine the market needs as regards bubble tea in the desired location. Study the players in the market and the consumers

Pros & Cons of bubble tea franchise

Bubble tea franchise has the same advantages and disadvantages as any other business.

That is why, before embarking on franchising a bubble tea business, one should try to weigh the pros and cons.

Pros

Established Brand: The fact that he is affiliated with a well-established franchise then makes the customers have faith in the brand.

Proven Business Model: This is so because franchises bring a tested and very successful business type into the market, which makes the likelihood of failure extremely low.

Support and Training: This is true because franchisors participate in the regular running of businesses by franchisees, and hence most of them provide satisfactory assistance to the franchisees in the running of their businesses.

Cons

High Initial Investment: The initial cost based on the resources to be used in this business will be relatively high, which in turn may be very expensive for some people who intend to start such a business.

Ongoing Fees: Royalties and advertising fees also need to be made monthly, which affect your profits to a certain extent.

Conclusion: Milk Tea Franchise

To sum up, the opening of a bubble tea franchise can become a highly profitable business when each potential cost is estimated and a suitable franchise is selected. Realizing the bubble tea franchise cost and estimating the expenditure in the right manner makes it easier to be successful in this growing business field. If you prepare well and receive proper assistance, your milk tea franchise will be one of the go-to places for bubble tea.