Franchise Deep Dive: HTeaO’s Franchise Costs, Fees, Profit and Data

This Texas-based franchise caters to a niche category within the booming tea industry.

By Victoria CampisiStaff Writer

5:17PM • 03/28/23

LAST UPDATED: 1/2024

FRANCHISE WEBSITE: https://hteao.com/franchise/

NUMBER OF LOCATIONS: 100

REPORTED COST TO GET IN: $238,000 - $1.9 million

REPORTED ROI (Item 19): N/A

In 2009, Gary and Kim Hutchens began the journey to creating HTeaO. For years, Gary had been selling his flavored iced teas in his burger restaurant Buns Over Texas. Having seen the iced tea business continue to grow, he made a decision to use the construction of his new Buns Over Texas as an opportunity to add a dedicated tea store to the end of his new building. This led to the creation of an iced tea drive-thru concept called "Texas Tea" in 2009.

Three years later, the couple partnered with their son Justin Howe to enhance the model and create a national brand. By January 2018, the brand launched the first HTeaO franchise prototype store in Midland, Texas.

As one of the "first to market" iced tea franchise concepts, HTeaO is breaking into a niche category within the beverage industry.

How Many Locations Are There?

In January 2018, HTeaO launched a franchise prototype store in Midland, Texas. Since then, it has grown to 100 locations.

In 2023, it was revealed that HTeaO appointed Bob Slaughter as Franchise Candidate Advocate while U.S. expansion is heating up. Based in Florida, Slaughter plans to be "boots on the ground" to handle the increasing demand of franchise interest in Florida and surrounding states. Throughout the year, HTeaO opened 34 locations and awarded 124 franchise agreements across the country.

In January 2024, the franchise reached the milestone of 100 locations. The 100th location is owned by the same franchisee who signed the first franchise agreement with HTeaO five years ago, Bryan Benson. Benson has continued to invest in the brand with four open locations and two more on the way.

What Is the Business Model?

With a cost-effective business model, the brand operates their own supply chain, significantly lowering the cost of goods. Each location is equipped with their own proprietary water filtration system, and all ingredients are fresh and 100% natural. HTeaO believes in creating a welcoming atmosphere and makes a large effort to give back to the local community.

Franchisees will provide ultra-premium tea, water and related products that give people “safe and healthy food choices in a fun and clean environment,” according to the franchise development page.

“We are committed to providing the absolute best quality iced tea money can buy in a retail environment,” the brand writes. “With the incredible support of our customers, we have entered a season where we teach, train and mentor franchisees in growing their own successful business.”

HTeaO offers a traditional store format, as well as a non-traditional venue and food truck. Typically, stores require about 2,000 square feet with a drive-thru and a T-shaped bar.

How Much Can HTeaO Owners Make?

HTeaO earnings are not publicly available. However, the global tea market was valued at around $207.1 billion in 2020 and is expected to rise to $266.7 billion by 2025.

How Much Does It Cost to Open a HTeaO Franchise?

The investment required to open an HTeaO store ranges from $238,000 - $1.9 million.

Initial Franchise Fee: $40,000
Initial Investment: $238,000 - $1.9 million
Net Worth Requirement: $1 million
Liquidity Requirement: $$250,000
Veteran Incentives: 10% off franchise fee
Royalty Fee: 6%

What Is the Franchise Fee for HTeaO?

The franchise fee for HTeaO is $40,000.

Who Are the Leaders of HTeaO?

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