Happy Lemon Franchise Cost, Revenue & Review 2026
- Investment
- $298K – $587K
- Disclosed sales
- not disclosed
- SBA charge-off
- Under 10 loans (4)
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Happy Lemon is a quick-service bubble-tea franchise known for its salted-cheese-topped teas, fruit teas, and boba drinks. Franchisees run compact shops managing drink prep, POS, and staffing.
FranchiseVerdict summary · 2026
A Happy Lemon franchise requires a total initial investment of $298K – $587K, including a $30K franchise fee and an ongoing 7.0% royalty[2]. This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✗ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored4 of 5 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $298K – $587K
- 48th pct Service Resta…
- Avg gross sales
- N/A
- Royalty
- 7.0%
- 90th pct Service Resta…
- Units
- 115
- 78th 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 median · 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 $298K – $587K including a $30K franchise fee, 7.0% ongoing royalty.
- RETURNSThis franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
- RISKVerdict B (Above average), verdict score 69/100 (higher is better).
- GROWTHFlat: no net change in franchised outlets in the latest year (10 opened, 10 closed); 9 signed but not yet open (Item 20).
- GROWTHSystem growing at 16.5% CAGR over 3 years with 115 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Yummy-town USA LLC
- Parent company
- Yummy-town Holding Corporation (YTHC)
- FDD Item 1, page 7 of the 2025 FDD
- Ultimate parent
- Yummy Town (Cayman) Holdings Corporation
- CEO title
- Chief Executive Officer
- Andy Chiang
- Incorporated in
- DE
- HQ
- 1801 Highland Avenue, Unit G, Duarte, California 91010
- Auditor
- JTC Accountancy Corp
- Audited financials
- Franchisor revenue
- $8.3M
- vs $6.8M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
- CEO
- Andy Chiang
- Headquarters
- CA
- Founded
- 2017
- FDD year
- 2025
- States available
- 13
Can you afford it, and what does the money buy?
Entry cost runs 9% below the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown13 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $30K | $30K | |
| Technology Set-Up Fee | $20K | $20K | |
| Store Pre-Opening Fee | $30K | $30K | |
| Your Initial Training Expenses for Your Personnel | $12K | $16K | |
| Rent & Deposit | $4K | $10K | |
| Architects Fees, Engineering Plans, Construction, Remodeling, Decorating, Signage, Leasehold Improvements, Fixtures and Furniture | $100K | $250K | |
| Equipment | $40K | $65K | |
| Opening Inventory and Supplies | $15K | $45K | |
| Insurance | $8K | $12K | |
| Security and Utility Deposits, Licenses, Permits, Certificates and other Prepaid Expenses | $10K | $15K | |
| Legal, Accounting Costs | $5K | $8K | |
| Computers, Point of Sale System and Related Software | $4K | $6K | |
| Additional Funds for 3 months | $20K | $80K | |
| Total initial investment | $298K | $587K |
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
- $298K – $587K
- Middle of category vs category
- Liquid capital req'd
- $20K – $80K
- Top 40% of category vs category
- Franchise fee
- $30K – $30K
- Top 40% of category vs category
- Royalty
- 7.0%
- typical 6–8%
- Ad fund
- 0.0%
- typical 3–5%
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 7.0% of gross sales |
| Marketing / ad fund | 0.0% |
| Technology fee | $20K |
| Training fee | $400 |
| Transfer fee | $10K |
| Renewal fee | $30K |
| Inventory (initial) | $15K – $45K |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
Happy Lemon makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. The return models need a revenue figure to start from, and the operating costs that turn gross sales into a profit are in no FDD. Enter your own and the calculator runs on your assumptions — nothing here is modelled until you do.
Returns model · single-unit ROIC
What would one Happy Lemon unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for annual revenue, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
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
No financial performance representation
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that.
Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
7.0% royalty + 0.0% ad fund — higher than the category average of 5.5%.
Disclosure
This franchisor makes no financial performance representation in Item 19 of its FDD. Item 19 is voluntary under the FTC Franchise Rule, and this filing states that it makes none, so no revenue or earnings figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Operator retention
System expanding at 16.5% CAGR over 3 years across 115 units — operators are staying and new ones are joining.
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 medians
How Happy Lemon Compares
Category median of published Quick-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 115
- Opened
- 10
- Last reporting year
- Closed
- 10
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 5
- Term expired, not renewed (per Item 20)
- Turnover rate
- 8.7%
- Company-owned
- 9
- Corporate units in the system
- % franchised
- 92%
- vs corporate-owned
- Net growth (3-yr)
- +16.5%
- Net unit change over 3 years
- 3-yr CAGR
- +16.5%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 5
- Transferred
- 15
- Reacquired
- 3
- Franchisor bought back
- Signed, not yet open
- 9
- 0.08 per open outlet · Item 20 Table 5
- Projected new
- 17
- Franchisor's next-year forecast
- Transfer rate
- 13.0%
- Owners selling to other franchisees
- Termination rate
- 4.3%
- Franchisor-initiated terminations
- Ceased ops
- 3.5%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 13 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.
Where the owners are · Item 20 owner list
66 current owners across 13 states; 22 former (terminated, transferred or not renewed) listed separately.
- WA 19
- CA 18
- TX 13
- FL 3
- CO 2
- HI 2
- NY 2
- OR 2
- AZ 1
- GA 1
- IL 1
- MA 1
- +1 more states
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 4 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 4
- Loan volume
- $1.3M
- Median loan
- $350K
- 50th percentile
- Charge-off rate
- Under 10 loans (4)
- Insufficient SBA coverage: 4 loans, rate hidden below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Under 10 loans (4)
- 5-yr charge-off
- Under 10 loans (4)
- 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)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
Two California DFPI consent orders in April 2021: (1) against Yummy-town USA LLC for failing to disclose former California franchisees of affiliate HL Hong Kong ($7,500 penalty); (2) against Happy Lemon HK Limited for offering/selling franchises before properly registering in California ($13,000 penalty)
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · JTC Accountancy Corp
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
FY2024 consolidated audited statements of Yummy-town USA LLC and its subsidiary (HL West). Net loss of $(102,879) consolidated; net loss attributable to Yummy Town USA LLC was $(171,538). Audited by JTC Accountancy Corp (December 31, 2024 and 2023).
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
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
What are you signing up for?
Ongoing fees run about 7.0% 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 | 5 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 1 |
| Territory type | No territory protection |
| 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 |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Los Angeles County, California |
| Jury trial waiver | No |
| Governing law | CA |
| Litigation count | 2 |
View Item 3 litigation summary
Two California DFPI consent orders in April 2021: (1) against Yummy-town USA LLC for failing to disclose former California franchisees of affiliate HL Hong Kong ($7,500 penalty); (2) against Happy Lemon HK Limited for offering/selling franchises before properly registering in California ($13,000 penalty)
Items 10, 11
Training & Operations
- Classroom training
- 15 hrs
- On-the-job training
- 128 hrs
- Training location
- Training facilities in the United States, on-site at your store, or online
- Ongoing training
- Required
- Field support
- 128 hrs/yr
- On-site visits per year
- Time to open
- 5 mo
- From signing to launch
- Franchisor financing
- Not offered
- Item 10
- POS system
- Point of Sale (POS) system
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Point of Sale (POS) system
Item 20 · call current owners
Franchisee Contacts
88 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Happy Lemon franchise?
The total investment to open a Happy Lemon franchise ranges from $298K – $587K, with an initial franchise fee of $30K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Happy Lemon franchise owners earn?
Happy Lemon makes no financial performance representation in Item 19 of its FDD - a voluntary item under the FTC Franchise Rule - so no unit revenue figures are disclosed. Declining to publish one is lawful and is not evidence of how the outlets perform. It does mean that less about this brand can be verified from its filing, and the FranchiseVerdict grade - an editorial assessment, not investment advice - reflects that. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns Happy Lemon?
Happy Lemon is franchised by Yummy-town USA LLC. Its parent company is Yummy-town Holding Corporation (YTHC). The ultimate parent named in the FDD is Yummy Town (Cayman) Holdings Corporation. Source: FDD Item 1, 2025 filing.
What is Item 19 in the Happy Lemon 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 Happy Lemon FDD and qualifies whose outlets they describe.
What is Happy Lemon's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Happy Lemon (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 Happy Lemon franchise locations are there?
As of their most recent FDD filing, Happy Lemon has 115 total units in the United States, including 106 franchised units and 9 company-owned units. 10 new units were opened in the latest reporting year.
Is Happy Lemon a good franchise to buy?
FranchiseVerdict rates Happy Lemon as a B-grade franchise with a verdict score of 69 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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 Happy Lemon, 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.