Feng ChaFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
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). Verdict grade: C. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $247K – $663K
- 45th pct Service Resta…
- Avg gross sales
- N/A
- 59th pct Service Resta…
- Royalty
- 5.0%
- 13th pct Service Resta…
- Units
- 79
- 71st pct Service Resta…
- SBA default
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = >15% above Quick-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Franchised units fell from 78 to 47 over 3 years. Investigate why operators are leaving.
Bottom line
- Total investment $247K – $663K including a $35K franchise fee, 5.0% ongoing royalty.
- No Item 19 financial performance data disclosed. The franchisor chose not to publish revenue figures.
- Verdict C (Average) with a risk score of 64/100.
- 9 units terminated last reporting year (11.4% of the system). Ask existing franchisees why.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Cannect, LLC
- Ultimate parent
- FC USA, LLC
- CEO title
- Co-Founder and Co-CEO
- Zhongming Gao and Yan Chen
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- TX
- HQ
- 412 N. Bowser Rd., Richardson TX 75081
- Auditor
- A&G LLP
- Audited financials
- Franchisor revenue
- $1.1M
- vs $2.1M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
Feng Cha franchisees operate bubble tea/specialty beverage retail locations, focusing on tea-based drinks with tapioca pearls and customization options. Day-to-day operations include inventory management, drink preparation, POS operations, customer service, and local marketing. The business model relies on high-traffic foot traffic locations and repeat customer loyalty in the competitive tea beverage market.
- CEO
- Zhongming Gao and Yan Chen
- Founded
- 2016
- FDD year
- 2025
- States available
- 15
FDD Item 7 · 2025 filing · 16 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
- Near category avg vs category
- Liquid capital req'd
- $10K – $50K
- Better than avg vs category
- Franchise fee
- $35K – $35K
- Near category avg vs category
- Royalty
- 5.0%
- Gross Revenue · 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 |
| Total fee load | 6.0% of rev |
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
vs Quick-Service Restaurants averages
How Feng Cha Compares
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
- 11.4%
- Company-owned
- 1
- Corporate units in the system
- % franchised
- 99%
- vs corporate-owned
- Multi-unit owners
- 20.0%
- Net growth (yr3)
- +8.3%
- Net unit change last year
- 3-yr CAGR
- +66.0%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 2
- 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 20 · 4 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
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
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
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Feng Cha's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 2 lenders with concentration factor
- Per-state charge-off rates across 3 states
- Startup risk premium and job creation velocity
- 2-year lending trend
Instant access. No subscription.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Feng Cha presents meaningful investment risk due to absent financial disclosure, minimal unit growth, territorial overlap exposure, and inability to validate profitability across a $417k investment range.
Litigation (Item 3)
No litigation is required to be disclosed in this Item.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · A&G 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: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 64 / 100 rating
- 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
- 04MINORWide investment range ($417k spread) indicates inconsistent buildout costs and unclear profitability benchmarks
- 05MED10-year term with no disclosed exit clauses or renewal terms creates long-term commitment uncertainty
- 06MINORHigh 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
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 1 |
| 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 | 90 days |
| Termination groundsℹ | 2 |
| Mandatory arbitration | Yes |
| Arbitration location | Dallas County, Texas |
| Jury trial waiver | Yes |
| Governing law | Texas |
| 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
- 8 hrs
- On-the-job training
- 77 hrs
- Training location
- On-site and corporate
- Ongoing training
- Required
- Site selection
- franchisee
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
5 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 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 C-grade franchise with a risk score of 64 out of 100, 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.
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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.