What are the franchise fees for boba tea?

This guide answers the most common questions about franchise fees for boba tea businesses, including what they cover, how much they cost, and additional costs involved in setting up a franchise.

We’ll explore the factors affecting franchise fees, including the type of brand, location, and the support provided by the franchisor. We also cover additional fees such as royalties and marketing costs.

Below is a summary of key franchise costs for boba tea businesses:

Expense	Range (USD)	Details
Franchise Fee	$10,000 – $50,000	Charged by both local and international brands, larger chains tend to have higher fees.
Equipment & Build-Out	$50,000 – $150,000	Costs depend on store size and location, equipment needs, and customization.
Initial Inventory & Licenses	$5,000 – $15,000	Initial stock, supplies, and licensing requirements.
Working Capital	$10,000 – $30,000	Funds for operational expenses and cash flow during the opening period.
Marketing & Grand Opening	$5,000 – $10,000	Funds for local marketing and launch campaigns.
Leasehold Improvements	$10,000 – $100,000	Cost of modifying the lease space to meet brand requirements.
Total Investment	$100,000 – $350,000+	Complete investment including all fees, setup, and working capital.

1. What are the typical initial franchise fees charged by established boba tea brands?

Initial franchise fees typically range from $10,000 to $50,000, depending on the brand.

Well-known international chains, like Gong Cha or Kung Fu Tea, usually charge fees between $20,000 and $40,000. Smaller or local brands may offer lower fees, ranging from $10,000 to $20,000 to attract new franchisees.

The fee includes licensing rights to use the brand, trademarks, and operational guidelines.

2. How do franchise fees differ between small local brands and international chains?

Franchise fees are generally lower for small, local brands compared to international chains.

Local brands tend to charge between $10,000 and $20,000, while larger chains charge higher fees due to brand recognition and global support systems.

International chains often have more established marketing support, supplier networks, and training programs, justifying the higher fees.

3. What is usually included in the franchise fee—such as training, equipment, or licensing rights?

The franchise fee typically includes the right to use the brand, trademarks, operational manuals, and access to proprietary recipes and suppliers.

In addition to licensing, most brands offer initial training, which can include both in-store and classroom sessions. Some franchises also assist with site selection and store opening support.

However, equipment and store build-out costs are usually not included in the franchise fee and are considered additional costs.

4. Are there additional setup costs beyond the initial franchise fee, and how much do they typically total?

Yes, there are additional setup costs beyond the initial franchise fee.

These costs can include equipment, store build-out, inventory, signage, and working capital. Typically, setup costs range from $50,000 to $150,000 for equipment and build-out, with additional costs for inventory and marketing.

Overall, the total startup investment typically ranges from $100,000 to $350,000, and can go higher for large locations in prime markets.

5. What are the average ongoing royalty fees and how are they calculated?

Ongoing royalty fees for boba tea franchises typically range from 4% to 8% of gross monthly sales.

These fees are usually calculated based on total sales and are paid monthly. Larger chains often charge between 4% and 7%, while some smaller brands may charge a fixed amount.

The royalty fee is a key source of revenue for the franchisor and supports ongoing brand development and franchise support.

6. Are marketing or brand development fees required in addition to royalties, and at what rate?

In addition to royalties, marketing and brand development fees are often required.

These fees typically range from 1% to 3% of gross sales and fund national or cooperative marketing campaigns.

Some brands may charge additional fees for local marketing, depending on the franchise agreement.

7. How long does a standard franchise agreement last, and what are the renewal fees or terms?

Standard franchise agreements typically last between 5 and 10 years.

Renewals are often available for additional 5-year terms, subject to performance and additional renewal fees. Renewal fees can either be a percentage of the current franchise fee or a fixed amount.

Renewals depend on meeting the franchisor’s operational standards and market conditions.

8. What factors most influence the variation in franchise fees between different boba tea brands?

Several factors influence the variation in franchise fees, including brand recognition, training, and international reach.

International brands usually charge higher fees due to their global recognition and established market presence. The level of support, training depth, and franchisee requirements also play a role in the fee structure.

Smaller brands tend to offer more affordable entry points to attract new franchisees, often with lower fees.

9. How do location, store size, or market demographics affect the overall investment required?

The location, store size, and target market demographics significantly impact the total investment required.

Urban or high-traffic locations tend to have higher lease costs and setup expenses, but they may also offer higher sales potential. Kiosk formats or smaller stores can lower investment costs compared to full-service locations.

Market demographics, such as targeting affluent or trend-sensitive customers, can also justify higher pricing and larger investments.

10. What are the average total startup costs—including fees, build-out, and inventory—for a new franchise location?

Total startup costs for a new boba tea franchise typically range from $100,000 to $350,000, depending on location and store size.

This includes franchise fees, equipment and build-out, inventory, and working capital. Larger, high-traffic locations in urban markets may exceed $400,000 in startup costs.

Accurate financial planning is crucial to ensure you are prepared for the upfront costs of opening a franchise.

11. Are financing options or incentives available from franchisors to reduce upfront costs?

Some franchisors offer financing options to help with upfront costs, though many rely on third-party lenders.

Franchisees may also qualify for SBA or government loan programs, depending on the franchisor and location.

Incentives such as discounts for veterans or multi-unit operators are occasionally available to help reduce initial expenses.

12. What are the current trends in franchise fees and profitability for the boba tea industry in 2025?

In 2025, boba tea franchise fees are trending higher due to inflation and increased costs of store build-out.

However, new franchise formats, such as kiosks and mobile units, are gaining popularity as cost-effective alternatives.

Franchisors are focusing on profitability by reducing operational costs and improving efficiency, with the potential for healthy profit margins if the business is well-managed.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

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