How to Start a Boba Tea Business & Franchise in the USA?
How to Start a Boba Tea BusinessFranchise in the USA?
Though you can find boba tea in almost every US city, it is still new to most of its potential customers.
The Taiwanese Street drink is widespread throughout Asia. But its appearance in other parts of the world regions is still in its infant stage. However, the bubble tea business is among the most profitable in the US food and beverage industry as of 2022. The popularity is expected to rise in the coming years with the increase in the spendable income of millennials and Gen Zers.
As an entrepreneur, you can cash on the trend and make some serious money by starting a boba tea shop franchise or boba tea brand.
There are several established Boba tea companies in major US cities that you can contact, but you must first explore your business needs. So without further ado, let’s discuss the best tips on how to open a boba shop franchise.
Why should you start a bubble tea business franchise
In franchising, a company (the franchisor) grants the right to use its brand name, products, and business model to another company or individual (the franchisee) in exchange for an initial fee and ongoing royalties.
The franchisee typically receives training and support from the franchisor and is expected to follow the franchisor's established guidelines and procedures. This means that franchisees will not have to worry about things like learning how to design a boba tea menu, marketing their boba tea shop, and other general business operations.
Leveraging an established brand’s name and proven business model makes things a lot easier for newbie entrepreneurs. It can land you customers more easily off the bat and increase your chance of success in the long run. All because the boba tea company you buy franchising rights from will do quite a bit of foundational work for you.
Tips on opening a boba shop franchise in the USA
1. Know Your Audience
The first step to starting a successful bubble tea business franchise is to figure out who you plan to serve. You cannot attract the entire population of your town or neighborhood to your business. Therefore, you must focus on a specific group.
Several cities in the US are multiethnic. For example, you can start vastly different boba tea franchises for Caucasians or Asians in New York.
Asians prefer stronger teas and savory flavors, while Caucasians prefer sweet and milky beverages. Hence, you can only cater to one at a time. Of course, you can also target other ethnic groups or audience segments. But no matter which audience segment you target, you must clearly understand their palette to cater to their expectations.
2. Choose a concept for your bubble tea business
Once you have found your target audience, think about the experience you want to provide for them.
The concept refers to the kind of Boba shop you will own. The two main concepts include grab-and-go and dine-in. A third hybrid concept lies in between, with a few chairs on the sidewalk/atrium. Choosing a concept will help you determine your Boba tea franchise cost and navigate the third step.
3. Select a location for starting a boba shop
You must take your time with the third step - choosing a location for your boba tea franchise, as it can make or break your business.
Boba tea is a low-cost item. The average cost of boba tea US-wide for customers is $5.84. At this price, you cannot expect to make a profit in this business unless you sell it in high quantities. Hence, you must choose a location with high footfall.
Residential complexes and college grounds make the best locations. However, you can also choose open markets and busy commercial areas if that’s where your audience is found. It is best not to finalize the location and shortlist a few potential ones before getting in touch with a company.
Moreover, ensure that the potential locations you choose either have an Asian demographic presence or are multicultural. This will ensure that the neighborhood you serve is open to Asian or new and foreign foods.
4. Select a boba tea company to become a franchisee of
Once you know your business needs, you can select a boba tea company that caters to those needs. If you start looking for boba tea companies without first understanding your business needs, you will get confused and remain indecisive. It might lead to the failure of your business as you might choose a franchise that doesn’t cater to your target audience.
But once you know what you want, it is a matter of finding the best solution for the customer experience you want to create. Knowing your audience in advance is especially beneficial as it allows you to choose a company based on the values you and your customers share.
If you can’t decide or need help with your decision, the boba tea brand LiliKoi Boba is a good place to start.
5. Gather funds
How you find investors would depend on the amount of money you need.
Boba tea franchisee costs can vary from $50,000 to $150,000. Bee & Tea and Chaitime are on the affordable end of the price range, whereas Gong Cha and Jazen Tea lie on the higher end.
However, rights to names such as Kung Fu Tea and Tapioca Express can cost up to $422,000 and $250,000, respectively. Besides this amount, the Boba tea franchise cost will require additional funds for location, equipment, marketing, and monthly royalty fee.
Calculate the total start-up cost before you get in touch with a company to avoid setbacks or disappointments.
6. Get the license
Each bubble tea business has specific requirements for franchise owners that you must fulfill. Specifics may include location, store concept, duration of the contract, etc. Many companies offer various benefits to the franchises, such as discounted supplies, free marketing, training, and long-term business plans.
After selecting the Boba tea company that fits your business needs and budget, you will need to get in touch with the company and complete the documents that abide by the Franchise Regulation in the USA. Don’t forget to negotiate before you complete the documents.
7. Create an online presence with a well-designed site
Once you have a good understanding of the market, developing a strong online presence is crucial. This means building a website that is not only easy to use, but also visually appealing and SEO-friendly.
One way to achieve this is by hiring a freelance web designer to design a nice site that is tailored to your specific needs and that showcases your products in the best possible way.
A well-designed site should be professional-looking and gives visitors the impression that they should take your business seriously. This can increase their trust in your brand and make them more likely to purchase products.
A well-designed website should showcase your products in the best possible light, with high-quality images and detailed product descriptions. This can help to improve the perceived value of your products and increase the likelihood of customers making a purchase.
8. Investing in Search Engine Optimization (SEO)
This is extremely beneficial for a boba tea franchise shop looking to establish a presence in the USA.
SEO is the process of optimizing a website to rank higher in search engine results pages (SERPs) for specific keywords. This can help to increase visibility and drive more traffic to the website, which in turn can lead to more sales and revenue for the business. Just take a look at how much organic traffic our article on the boba shortage is bringing in per month.
One key aspect of SEO is creating high-quality, relevant content for the website. A content writing agency can help to ensure that the content is optimized for both search engines and human users. The agency can also help to create a consistent brand voice and messaging across the website and other online platforms. This can help to build trust and credibility with potential customers, which can be crucial for a new business in a crowded market.
Another benefit of investing in SEO is that it can help to build a strong online presence. With more visibility in search engine results, the boba tea franchise shop can reach a wider audience and establish itself as a reputable and trustworthy business.
This can help to attract customers who may not have otherwise known about the shop, and can also help to generate positive word-of-mouth referrals.
9. Set systems in place
Once you have acquired a franchise, you will likely receive a system for creating the perfect Boba tea every time.
If the franchise doesn’t train you, you must prepare yourself and your staff to ensure you uphold the quality and provide a consistent experience to your customers.
Besides ensuring quality and taste consistency, the system will also allow you to serve your customers in a minimum amount of time. The efficiency and speed will also ensure you don’t mix up orders and don’t waste any resources.
The system can be more efficient if you purchase all your Boba Tea supplies from a trusted distributor that can help you with ordering the right quantities.
Do you have a better on how you can start a boba shop franchise now?
That’s it! You’re ready to start a boba tea franchise. Make sure you market your business continuously even after you have opened up. Consistent marketing can play an essential role in making your business successful.
- Frank Kuo