Kung Fu Tea Franchise FDD, Costs & Fees (2024)

KEY FRANCHISE STATS

All you need to know about this franchise in a snapshot

Initial franchise fee
$37,000
Investment required
$169,000 - $378,000
Royalty fee
4.00%

Kung Fu Tea: Mastering the Art of Bubble Tea

Established in 2010 in Flushing, Queens, New York, Kung Fu Tea has rapidly ascended to become the largest bubble tea brand in the United States. Headquartered in New York City, the company began franchising in 2011 and has since expanded to over 350 locations nationwide.

Kung Fu Tea specializes in a diverse array of beverages, including bubble teas, milk teas, slushes, punches, and yogurt-based drinks. The brand distinguishes itself by emphasizing freshly brewed teas, customizable sweetness and ice levels, and a commitment to authentic flavors.

This dedication to quality and innovation has solidified Kung Fu Tea's position as a leader in the competitive bubble tea market.

Initial investment

Here's what you would need to invest if you were to start this franchise. These costs are provided by the franchisor in the Franchise Disclosure Document.

Type of Expenditure Amount (Low – High)
Initial Franchise Fee $25,000 - $37,000
Training Fee $12,500 - $12,500
Equipment from our Affiliate $6,500 - $7,500
Other Equipment, Furniture, Fixtures, and Signage $30,000 - $40,000
Computers, Printer, Fax, and Other Hardware and Business Software $2,500 - $5,000
Prepaid Rent and Security Deposit $5,000 - $40,000
Leasehold Improvements and Architectural Costs $40,000 - $150,000
Interior Design (3D Rendering of Shop) $3,500 - $5,000
Initial Inventory of Tea, Coffee, Cups, Menu Boards, and Packaging Materials $15,000 - $25,000
Initial Marketing Program $5,000 - $5,000
Insurance – Liability and Workers Compensation – Initial Deposit $5,000 - $20,000
Travel, Living Expenses, and Salaries During Initial Training $4,000 - $5,000
Legal and Accounting Fees $5,000 - $6,000
Additional Funds – First Month $10,000 - $20,000
Total (Standard Unit) $169,000 - $378,000
Total (Nontraditional Unit) $184,000 - $269,500

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Number of units

2023
Franchised units

216

259

308

Company-owned units

3

3

3

Total units

219

262

311

Franchise Disclosure Document

Training

Kung Fu Tea offers a comprehensive training program to ensure franchisees are well-prepared to operate their stores effectively. This program includes both on-the-job and classroom training, each lasting approximately 80 hours.

The training covers various aspects of the business, such as:

  • Product Preparation: Learning the techniques for crafting the brand's signature beverages to maintain consistent quality across all locations.
  • Store Operations: Understanding daily operational procedures, including inventory management, equipment maintenance, and customer service standards.
  • Marketing and Sales: Gaining insights into effective marketing strategies and sales techniques to attract and retain customers.
  • Financial Management: Acquiring knowledge on managing finances, including budgeting, accounting, and financial reporting.

Additionally, franchisees receive ongoing support through newsletters, meetings, conventions, and online resources to stay updated on best practices and industry trends.

Territory Protection

Kung Fu Tea provides its franchisees with exclusive territorial rights, ensuring that no other franchisee can operate within a designated area. This exclusivity helps franchisees build a loyal customer base without direct competition from the same brand nearby.

The size and boundaries of each territory are determined based on factors like population density and market potential. This strategic approach aims to balance market saturation and franchisee success, fostering a supportive environment for business growth.

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