HTeaO
HTeaO offers retail stores selling purified water, iced teas, coffee, snacks, and more under a Texas-based franchise. Known for its wide selection of freshly brewed iced teas, it operates in the beverage and food service industry.
About HTeaO
HTeaO franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of an HTEAO store ranges from $387,083 to $1,902,250.93, which includes a mandatory payment of $55,000 to the franchisor or affiliate. This range covers various costs including construction and leasehold improvements, equipment, and other initial expenses [p.1].
What is the initial franchise fee?
The initial franchise fee is $40,000 for the right to operate a Store. If you acquire the right to operate a business at a nontraditional venue, a reduced initial franchise fee of $25,000 applies [p.10].
What are the ongoing royalty and advertising fees?
The Company charges a 6% royalty fee based on gross revenue earned weekly [p.65]. Additionally, franchisees contribute to an advertising fund based on a percentage of their gross revenue [p.65].
How long is the initial franchise agreement, and can I renew it?
The duration of the initial franchise agreement isn't specified in the excerpts. However, you may renew the franchise granted by this Agreement for two consecutive five-year terms under certain conditions as outlined on page [p.130].
Can I sell or transfer my franchise, and what does that require?
According to [p.149], if you are a Business Entity, your owners may transfer ownership interests among themselves or up to a Non-Controlling Interest to third parties, provided certain conditions are met, including providing advance notice to the franchisor, amending Attachment C, having new owners sign a Guaranty and Personal Undertaking in the form of Attachment D-1, executing releases and covenants not to sue, and paying a Transfer Fee. This process must also comply with any state laws regulating franchising.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement if the store is not opened by the specified deadlines [p.31]. Additionally, the franchisor may terminate or modify territorial protections, reduce the size of the development area, or limit the number of stores established if you fail to meet your obligations under the development agreement [p.32]. This isn't specified in the excerpts for other grounds of termination.
What financial requirements — net worth and liquid capital — do I need to qualify?
To qualify as a transferee, you must demonstrate to the franchisor's satisfaction that you meet their then-current educational, managerial, and business standards; possess good moral character, business reputation, and credit rating; have the aptitude and ability to operate each Franchised Business; and have sufficient equity capital to operate each Franchised Business. If your net worth equals or exceeds the franchisor's net worth at the time of transfer (excluding the value of each Franchised Business), this condition will be presumed met [p.101, p.150].
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory as specified [p.31]. You may face competition from other franchisees, outlets owned by the franchisor, or competitive brands controlled by the franchisor within your area.
What training and ongoing support does the franchisor provide?
The franchisor provides initial training for the General Manager (GM50) and one other individual, which includes topics covered by Operations Services Training Manager Jennifer Ugalde and Director of Corporate Stores Debbie Holcomb. This training is conducted in Fort Worth, Texas, on a monthly basis. Additionally, the franchisor offers ongoing support through marketing and sales techniques, site selection assistance, architectural plans, interior and exterior design, and opening assistance [p.85]. For additional training beyond initial requirements, there may be a fee not to exceed $3,000 per additional trainee [p.134].
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2024, there were 131 franchised HTEAO Stores operating in the United States. However, this number does not specify how many have closed or been terminated; it only mentions that there are lists of franchisees whose franchises terminated or ceased to do business during the fiscal year ending December 31, 2024 [p.49].
Does the franchisor share any financial performance or earnings information?
The franchisor may provide financial performance information, but it does not make any representations about a franchisee's future financial performance. This information can be shared if there is a reasonable basis for it [p.43], and historical revenue and expense information might be published with the consent of the franchisee [p.147]. However, the franchisor does not guarantee or authorize others to make representations about potential earnings [p.45].
What am I restricted to selling, and where must I buy supplies?
You are required to sell all items that the franchisor requires and only those items that they have approved [p.36, p.137]. You must purchase and install millwork, equipment, and signs from an approved third-party supplier, as well as furnishings, fixtures, and décor from the franchisor's approved supplier [p.22].