Feng Cha Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Feng Cha is a quick-service bubble-tea franchise serving milk teas, fruit teas, and cheese-foam-topped drinks. Franchisees run compact shops managing drink prep, POS, and staffing.
FranchiseVerdict summary · 2026
A Feng Cha franchise requires a total initial investment of $247K – $663K, including a $35K franchise fee and an ongoing 5.0% royalty[2]. The 2025 FDD does not disclose unit-level revenue (no Item 19). FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $247K – $663K
- 37th pct Service Resta…
- Avg gross sales
- N/A
- Royalty
- 5.0%
- 11th pct Service Resta…
- Units
- 79
- 73rd pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $247K – $663K including a $35K franchise fee, 5.0% ongoing royalty.
- RETURNSTotal revenues of $2,092,866 for the year ended December 31, 2024 comprise franchise fee revenue $981,841, royalty and loyalty revenue $781,546, brand development fund revenue $106,598, technology fee revenue $102,340, and other revenue $120,541 (Cannect LLC Statement of Operations).
- RISKVerdict A (Strongest tier), verdict score 69/100 (higher is better).
- FLAG9 units terminated last reporting year (11.4% of the system). Ask existing franchisees why.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Cannect, LLC
- Parent company
- None
- Ultimate parent
- FC USA, LLC
- CEO title
- Co-CEO
- Zhongming Gao / Yan Chen
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- TX
- HQ
- 412 N. Bowser Rd., Richardson, TX 75081
- Auditor
- AtG LLP
- Audited financials
- Franchisor revenue
- $2.1M
- vs $2.1M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
- CEO
- Zhongming Gao / Yan Chen
- Headquarters
- TX
- Founded
- 2016
- FDD year
- 2025
- States available
- 15
Can you afford it, and what does the money buy?
Entry cost runs 31% below the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown16 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $35K | $35K | |
| Initial Training Fee (up to three attendees)not refundable | $10K | $10K | |
| Professional Feesnot refundable | $5K | $15K | |
| Equipment, Fixtures, Signs and Technology Materialsnot refundable | $75K | $138K | |
| Leasehold Improvementsnot refundable | $60K | $280K | |
| Signagenot refundable | $5K | $20K | |
| Advertisingnot refundable | $5K | $15K | |
| Franchise Premises Rent and Security Depositnot refundable | $12K | $40K | |
| Initial Inventory of Tea, Coffee, Cups, Menu Boards and Packaging Materialsnot refundable | $19K | $28K | |
| Initial Training Expenses (Travel and Living Expenses)not refundable | $1K | $10K | |
| On-Site Support Expensesnot refundable | $2K | $8K | |
| Insurance - Liability and Worker's Compensation (Initial Deposit)not refundable | $3K | $5K | |
| Miscellaneous Initial Expensesnot refundable | $5K | $10K | |
| Additional Fundsnot refundable | $10K | $50K | |
| Development Fee (Two Stores - Multi-Unit Developer)not refundable | $50K | $50K | |
| Development Fee (Three Stores - Multi-Unit Developer)not refundable | $63K | $63K | |
| Total initial investment | $359K | $776K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $247K – $663K
- Top 40% of category vs category
- Liquid capital req'd
- $10K – $50K
- Top 40% of category vs category
- Franchise fee
- $35K – $35K
- Middle of category vs category
- Royalty
- 5.0%
- percentage · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 6.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $350 |
| Training fee | $10K |
| Transfer fee | $18K |
| Renewal fee | $18K |
| Inventory (initial) | $19K – $28K |
| Total fee load | 6.0% of rev |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
Feng Cha did not disclose financial performance in FDD Item 19. The ROIC and return models require Item 19 revenue. Without it all inputs are estimates. You can still run the calculator with your own assumptions by entering an expected revenue figure.
Returns model · single-unit ROIC
What would one Feng Cha unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
25%
Below the 30–60% attractive-franchise band
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
Total revenues of $2,092,866 for the year ended December 31, 2024 comprise franchise fee revenue $981,841, royalty and loyalty revenue $781,546, brand development fund revenue $106,598, technology fee revenue $102,340, and other revenue $120,541 (Cannect LLC Statement of Operations).
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 6.0% — below the Quick-Service Restaurants average of 7.9%.
Disclosure
Franchisor chose not to disclose financial performance representations. You will need to gather unit economics directly from existing franchisees.
Operator retention
System expanding at 66.0% CAGR over 3 years across 79 units — operators are staying and new ones are joining.
Multi-unit rate
Only 20% of franchisees own multiple units. Could indicate challenging economics or a young system where operators haven't had time to expand.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants averages
How Feng Cha Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 79
- Opened
- 15
- Last reporting year
- Closed
- 9
- Terminated
- 9
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 23.1%
- Company-owned
- 1
- Corporate units in the system
- % franchised
- 1%
- vs corporate-owned
- Multi-unit owners
- 20.0%
- Net growth (3-yr)
- +66.0%
- Net unit change over 3 years
- 3-yr CAGR
- +66.0%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 61
- Closed (3yr)
- 9
- Terminated (3yr)
- 9
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 6
- Reacquired (3yr)
- 0
- Franchisor bought back
- Projected new
- 0
- Franchisor's next-year forecast
- Transfer rate
- 2.5%
- Owners selling to other franchisees
- Termination rate
- 11.4%
- Franchisor-initiated terminations
- Ceased ops
- 11.4%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 15 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
15
states with franchisees (per FDD Item 12)
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 5 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 5
- Loan volume
- $4.0M
- Median loan
- $407K
- 50th percentile
- Charge-off rate
- N/A
- limited sample (5 loans) — rate not shown below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 3
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Litigation (Item 3)
No litigation is required to be disclosed in this Item.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · AtG LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 69 / 100 verdict
- 01MEDNo average revenue or net income disclosed (Item 19 absent) — impossible to validate ROI on $246k-$663k investment
- 02MINORSlow unit growth (8.3% YoY) suggests market saturation or franchisee dissatisfaction in tea/beverage category
- 03MINORUnprotected territory creates direct competition risk between franchisees in same market
- 04MED10-year term with no disclosed exit clauses or renewal terms creates long-term commitment uncertainty
- 05MINORHigh relative initial investment ($35k franchise fee) for beverage concept with no performance data to justify it
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 6.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 1 |
| Territory type | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 60 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 26 |
| Curable defaultsℹ | 3 |
| Mandatory arbitration | Yes |
| Arbitration location | Dallas County, Texas |
| Jury trial waiver | No |
| Governing law | TX |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation is required to be disclosed in this Item.
Items 10, 11
Training & Operations
- Classroom training
- 85 hrs
- On-the-job training
- 0 hrs
- Training location
- Corporate Headquarters in Dallas, TX area or as designated
- Ongoing training
- Required
- Time to open
- 12 mo
- From signing to launch
- Site selection
- Franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
1 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Feng Cha · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Feng Cha franchise?
The total investment to open a Feng Cha franchise ranges from $247K – $663K, with an initial franchise fee of $35K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Feng Cha franchise owners earn?
Feng Cha does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
What is Item 19 in the Feng Cha FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Feng Cha FDD and qualifies whose outlets they describe.
What is Feng Cha's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Feng Cha (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Feng Cha franchise locations are there?
As of their most recent FDD filing, Feng Cha has 79 total units in the United States, including 78 franchised units and 1 company-owned units. 15 new units were opened in the latest reporting year.
Is Feng Cha a good franchise to buy?
FranchiseVerdict rates Feng Cha as a A-grade franchise with a verdict score of 69 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent Feng Cha, you can request corrections or provide updated information.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.