Hechalou Tea Franchise Cost, Revenue & Review 2026
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Hechalou Tea is a bubble tea franchise serving milk teas, fruit teas, tea jellies, and boba drinks. Franchisees run the shops, managing drink prep, inventory, and counter service.
FranchiseVerdict summary · 2026
A Hechalou Tea franchise requires a total initial investment of $268K – $474K, including a $42K franchise fee and an ongoing 5.0% royalty[2]. The 2025 FDD does not disclose unit-level revenue (no Item 19). FranchiseVerdict grade: D (Below average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $268K – $474K
- 42nd pct Service Resta…
- Avg gross sales
- N/A
- 1 outlet
- Royalty
- 5.0%
- 11th pct Service Resta…
- Units
- 1
- 3rd 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 $268K – $474K including a $42K franchise fee, 5.0% ongoing royalty.
- RETURNSAudited statement of operations for the period from April 22, 2024 (inception) to December 31, 2024; revenue $3,950 consists solely of revenue with no cost of revenue. Going concern doubt noted: equity negative $60,371.
- RISKVerdict D (Below average), verdict score 29/100 (higher is better).
- FLAGAuditor disclosed a going-concern note, which flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Hechalou International LLC
- Parent company
- HechalouTea Co., Ltd.
- Ultimate parent
- Ethan Yi-Shen Fang (individual owner)
- CEO title
- Founder and Chief Executive Officer
- Ethan Yi-Shen Fang
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- DE
- HQ
- 430 South Garfield Avenue, Suite 489, Alhambra, California 91801
- Auditor
- JTC Accountancy Corp
- Audited financials
- Franchisor revenue
- $4K
- Most recent fiscal year
- ⚠ Going-concern note
- Disclosed in FDD 2025
- Auditor flagged doubt about continued operations. Verify against the latest FDD before deciding.
Overview
About
- CEO
- Ethan Yi-Shen Fang
- Headquarters
- CA
- Founded
- 2024
- FDD year
- 2025
- States available
- 1
Can you afford it, and what does the money buy?
Entry cost runs 44% below the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown12 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $42K | $42K | |
| Tea Shop Pre-Opening Feenot refundable | $3K | $3K | |
| Your Initial Training Expenses for Our Trainers | $12K | $17K | |
| Rent & Deposit | $4K | $10K | |
| Architects Fees, Engineering Plans, Construction, Remodeling, Decorating, Signage, Leasehold Improvements, Fixtures and Furniture | $100K | $200K | |
| Equipment | $40K | $60K | |
| Opening Inventory and Supplies | $20K | $50K | |
| Insurance | $8K | $12K | |
| Security and Utility Deposits, Licenses, Permits, Certificates and other Prepaid Expenses | $10K | $15K | |
| Legal, Accounting Costs | $5K | $7K | |
| Computers, Point of Sale System and Related Software | $4K | $8K | |
| Additional Funds for 3 months | $20K | $50K | |
| Total initial investment | $268K | $474K |
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
- $268K – $474K
- Middle of category vs category
- Liquid capital req'd
- $20K – $50K
- Top 40% of category vs category
- Franchise fee
- $42K – $42K
- Bottom third — review vs category
- Royalty
- 5.0%
- percentage · typical 6–8%
- Ad fund
- 0.0%
- typical 3–5%
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 0.0% of gross sales |
| Training fee | $17K |
| Transfer fee | $10K |
| Renewal fee | $30K |
| Inventory (initial) | $20K – $50K |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
Hechalou Tea 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 Hechalou Tea unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
31%
Within 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
Audited statement of operations for the period from April 22, 2024 (inception) to December 31, 2024; revenue $3,950 consists solely of revenue with no cost of revenue. Going concern doubt noted: equity negative $60,371.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
5.0% royalty + 0.0% ad fund.
Disclosure
Franchisor chose not to disclose financial performance representations. You will need to gather unit economics directly from existing franchisees.
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 Hechalou Tea Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1
- Opened
- 1
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 1
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- Projected new
- 5
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 1 state 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.
1
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
The auditor flagged going-concern doubt (Item 21) — the single biggest risk here.
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)
1) Yi-Sheng Fang v. Hechalou US LLC (TTAB Opposition No. 91295497) - trademark opposition pending; 2) CA DFPI Enforcement Matter No. 39738 - self-reported franchise law violation, concluded without enforcement action.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · JTC Accountancy Corpⓘ Going-concern language present, but this is an early-stage franchisor with limited operating history — common for new systems and not necessarily a sign of distress.
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
What are you signing up for?
Ongoing fees run about 5.0% 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 | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Not allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | No |
| 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
1) Yi-Sheng Fang v. Hechalou US LLC (TTAB Opposition No. 91295497) - trademark opposition pending; 2) CA DFPI Enforcement Matter No. 39738 - self-reported franchise law violation, concluded without enforcement action.
Items 10, 11
Training & Operations
- Classroom training
- 8 hrs
- On-the-job training
- 190 hrs
- Training location
- On-site at franchisee's store or online (at franchisor's option)
- Ongoing training
- Required
- Field support
- 190 hrs/yr
- On-site visits per year
- Time to open
- 5 mo
- From signing to launch
- Site selection
- Franchisee proposes; franchisor approves
- 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
Hechalou Tea · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Hechalou Tea franchise?
The total investment to open a Hechalou Tea franchise ranges from $268K – $474K, with an initial franchise fee of $42K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Hechalou Tea franchise owners earn?
Hechalou Tea 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 Hechalou Tea 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 Hechalou Tea FDD and qualifies whose outlets they describe.
What is Hechalou Tea's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Hechalou Tea (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 Hechalou Tea franchise locations are there?
As of their most recent FDD filing, Hechalou Tea has 1 total units in the United States, including 1 franchised units and 0 company-owned units. 1 new units were opened in the latest reporting year.
Is Hechalou Tea a good franchise to buy?
FranchiseVerdict rates Hechalou Tea as a D-grade franchise with a verdict score of 29 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 Hechalou Tea, you can request corrections or provide updated information.
Other Quick-Service Restaurants franchises
Compare similar franchise opportunities in the Quick-Service Restaurants category
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.