Tapioca Express
Tapioca Express offers boba tea cafes with milk tea, smoothies, and snacks. Known for innovative drinks like boba tea, it operates in the quick-serve beverage and snack industry.
About Tapioca Express
Tapioca Express is a Taiwanese-American fast food franchise chain specializing in bubble tea, coffee, a variety of fruit juices and slushes, and small meals and light snacks. The first store opened in Alhambra, California in 1999. As of 2018, the company is headquartered in South El Monte, California, and has locations in California, Texas, and Washington. Tapioca Express follows a franchise model and requires franchise owners to purchase supplies and ingredients only from the corporate headquarters, ensuring similar standards for all locations.
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Tapioca Express franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Tapioca Express Traditional Café is between $217,900 and $479,100. For a Tapioca Express Kiosk Café, the range is from $137,500 to $311,900 [p.1]. This includes an initial training fee of $3,000 per person for two individuals, which does not cover travel expenses [p.149; p.11].
What is the initial franchise fee?
The initial franchise fee varies based on the type of café. For a Traditional Café, it is $15,000, and for a Kiosk Café, it is $9,000 [p.11]. This fee is fully earned by the company upon payment [p.11].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is currently a continuing monthly fee of the greater of 2.5% of your monthly Gross Sales or $500 per month. This rate can be increased up to a maximum of 6% of your monthly Gross Sales or $1,200 per month at any time in the future [p.147]. Additionally, you must contribute a minimum of 0.5% of your monthly Gross Sales or $100 to the Brand Development Fund for advertising and marketing purposes [p.35].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is 3 years [p.112]. The agreement may be renewed for an additional five-year term with a renewal fee, provided you satisfy the terms of the agreement including those in Article 15 [p.174].
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires approval from the franchisor. The franchisor may refuse to approve a transfer for good cause, which includes not meeting the franchisor's standards for new franchisees as of the time of the transfer [p.261]. Additionally, the proposed transferee must meet certain criteria such as having good moral character, sufficient business experience, and financial resources suitable for operating a Tapioca Express Café [p.170].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.264]. Additionally, the franchisor may terminate the agreement if there is a failure to comply with lawful provisions of the franchise agreement and such failure is not cured within a reasonable time frame [p.266(c)].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not provide specific details on the prospective franchisee's required net worth or liquid capital to qualify for the franchise. However, it does mention that if the franchisor’s most recent financial statements are unaudited and show a net worth of less than $100,000, you may request escrow arrangements for your initial investment until certain obligations are met [p.261].
Do I get an exclusive or protected territory?
You do not receive an exclusive territory [p.39]. However, during the term of the Franchise Agreement, provided you comply with your obligations and do not default, the franchisor will not establish another Tapioca Express Café within your designated territory [p.39].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training to the Managing Owner and other designated personnel before opening the Franchised Business [p.145]. This training can be conducted in various ways, including classroom instruction, on-the-job training at a location determined by the franchisor, or remotely through online web-based conferencing [p.145]. Additionally, the franchisor reserves the right to offer Supplemental Training upon approval and may require participation if operational standards are not met [p.145]. Franchisees must also provide ongoing training for their employees according to the franchisor's standards [p.145].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets [p.55]. However, if you are purchasing an existing outlet, the franchisor may provide actual records of that specific outlet [p.55]. Additionally, the franchisor is permitted to provide financial performance information under certain conditions as outlined in Item 19 of the FDD [p.52], but this must be based on a reasonable basis and include a disclaimer if it differs from the information provided there.
What am I restricted to selling, and where must I buy supplies?
You are required to exclusively offer and serve the Approved Products and Services, and you must purchase and use System Supplies from either the franchisor or its designated suppliers [p.155]. Additionally, you must purchase interior displays, point of sale displays, uniforms, supplies, marketing materials, and other specified items only from the franchisor or its approved supplier(s) [p.3, p.26]. This applies to approximately 75% to 90% of your total purchases for establishing your Café and around 50% to 65% in ongoing operations [p.27].