KungFu Tea offers franchises that sell a variety of brew tea, bubble tea, coffee, juices, smoothies, and other hot and cold beverages. Kung Fu Tea has an atmosphere that charms customers and encourages them to always come back.

Kung Fu Tea was founded in New York in 2010. The parent company of Kung Fu Tea is Kung Fu Tea USA Inc. and it started offering franchises in 2013 under the business name of Kung Fu Tea, a company that is based in Delaware.

Visit the franchise profile on Vetted Biz: https://www.vettedbiz.com/listing/kung-fu-tea/

Read here to learn more: https://www.vettedbiz.com/kung-fu-tea-franchise-2022/

Want to speak with a franchise specialist about Kung Fu Tea or another franchise? Click here: https://share.hsforms.com/1ZtNM19w4R8WIXyNa_97N7w4e0xw

00:00 Introduction
00:28 Kung Fu Franchise Units
01:20 Initial Franchise Fees
01:51 Time to Recoup Investment
02:22 Franchise Royalty Fee
02:44 Kung Fu Franchise Growth
03:39 Pandemic Impact on Kung Fu Franchise
03:53 Conclusion

#KungFuTeaFranchiseCostProfit2022 #KungFuTeaFranchise #VettedBiz

Currently, there are 245 Kung Fu Tea shops across the United States and that number is only getting bigger. Since Kung Fu Tea is a franchise, you could own the next one!

Kung Fu Tea has many competitors who serve the Asian-American market. Some are national and international companies, while others are small companies with only one location, serving the local community. One big competitor is Starbucks.

We will analyze if the potential returns are worth the initial cost of the franchise.

The initial fee for a standard Kung Fu Tea franchise is $37,000. If you choose to open a non-traditional unit (airport, hotel, etc) you will only pay $25,000. The fee for every additional unit you might open in the future is $25,000.

The estimated total investment for beginning operations of a Denny’s franchise is between $166,500 and $375,500.

Other Fees:

Royalty Fee: 3% of Gross Sales

Marketing Fee: 2% of Gross Sales

Technology Fee: $100 per month

Kung Fu Tea is continuously looking for passionate individuals that want to open new franchises. The process for opening a new franchise is similar to most franchises:

You fill out a form
Someone will contact you
Have an interview
Open a Kung Fu Tea Shop!

In addition to these steps, Kung Fu Tea will send a representative for the first two weeks of operation to ensure that everything goes smoothly.

Kung Fu Tea does not make any representations about a franchisee’s future financial performance or the past financial performance of company-owned or franchised outlets.

Through our analysis of the Franchisor income statement, we can guesstimate sales figures from the income statement line item “Franchise Revenue.”

2018 Kung Fu Tea Break-even point:

Royalty fee: 3% of Gross Sales

In 2020 Kung Fu Tea made $2,513,157

Estimated average franchise revenue: $341,926

2019 Kung Fu Tea Break-even point:

Royalty fee: 3% of Gross Sales

In 2020 Kung Fu Tea made $2,467,310

Estimated average franchise revenue: $335,688

1- Based on a midpoint investment of $271,000 with estimated profits of $33,568 at a 10% profit margin it would take about 10 years to recoup your investment.

2- Based on a midpoint investment of $271,000 with estimated profits of $50,353 at a 15% profit margin it would take about 7 years to recoup your investment.

3- Based on a midpoint investment of $271,000 with estimated profits of $67,137 at a 20% profit margin it would take about 6 years to recoup your investment.

After a few years in the business, when you go to sell your franchise based on the median multiple of .31 and net sales of 2019 of $335,688 it would sell for about $104,063. This is only 38% of the midpoint initial investment.

Over the years the company has been in decline, making less and less money every year. However, this decline is not related to revenue but rather to extra expenses. Kung Fu Tea is a relatively new franchisor and it is highly likely that those extra expenses are going towards marketing and different growth strategies. It is possible that these numbers will get a lot better in the near future.

The number of units has been increasing in the last three years. In 2019, 50 new units were opened while in 2020, even amid the pandemic, franchisees managed to open 29 new units. It is exciting to see that the company is growing fast.

Read here to learn more: https://www.vettedbiz.com/kung-fu-tea-franchise-2022/

Want to speak with a franchise specialist about Kung Fu Tea or another franchise? Click here: https://share.hsforms.com/1ZtNM19w4R8WIXyNa_97N7w4e0xw

Source

Leave a comment

Your email address will not be published. Required fields are marked *