Hteao Franchise Cost, Revenue & Review 2026
- Investment
- $387K – $1.9M
- Disclosed sales
- partial, no system average
- SBA charge-off
- 0.0%
- on 47 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
HTeaO is a drive-thru franchise specializing in a wide selection of freshly brewed iced teas, plus flavored waters and coffee. Franchisees run drive-thru stores managing tea brewing, service, and staffing.
FranchiseVerdict summary · 2026
A HTEAO franchise requires a total initial investment of $387K – $1.9M, including a $25K – $40K franchise fee and an ongoing 6.0% royalty[2]. The 2025 FDD on file does not yield a unit-revenue figure we can publish. SBA 7(a) loans show a 0.0% charge-off rate across 47 loans[1]. FranchiseVerdict grade: A (Strongest tier), 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 scored6 of 6 headline figures on this page cite a page of the filing.
Overview
- Investment
- $387K – $1.9M
- 62nd pct Service Resta…
- Avg gross sales
- N/A
- Outlet subset
- Royalty
- 6.0%
- 48th pct Service Resta…
- Units
- 144
- 79th pct Service Resta…
- SBA charge-off
- 0.0%
- % of SBA 7(a) loans not repaid · median varies by category
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 $387K – $1.9M including a $40K franchise fee, 6.0% ongoing royalty.
- RETURNSItem 19 reports outlet revenue, but not in a form that yields a per-outlet average we can compare across brands.
- RISKVerdict A (Strongest tier), verdict score 81/100 (higher is better). SBA loan charge-off rate of 0.0% across 47 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHNegative, pipeline stalled: 177 agreements signed but not yet open against 144 open outlets (Item 20).
- GROWTHSystem growing at 129.8% CAGR over 3 years with 144 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- HTEAO FC, LLC
- Parent company
- HTO LLC
- FDD Item 1, page 6 of the 2025 FDD
- Ultimate parent
- HTO Holdco, LLC
- FDD Item 1, page 6 of the 2025 FDD
- Predecessor
- HTeaO FC, LLLP
- Prior franchisor entity
- CEO title
- President and Chief Executive Officer
- Justin Howe
- Incorporated in
- TX
- HQ
- 1322 Ranchers Legacy Trail, Fort Worth, Texas 76126
- Auditor
- Whitley Penn LLP
- Audited financials
- Franchisor revenue
- $13.5M
- vs $10.0M prior year
Affiliated brands
- TBevCo
- TBevCo IP
- TeaBevCo
- Brand
Other brands the franchisor or its parent operates (Item 1).
Overview
About
- CEO
- Justin Howe
- Headquarters
- TX
- Founded
- 2009
- FDD year
- 2025
- States available
- 8
Can you afford it, and what does the money buy?
Entry cost runs 136% above the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown17 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $40K | $40K | |
| Rent (3 months)not refundable | $5K | $38K | |
| Utility and Lease Security Depositsnot refundable | $0 | $13K | |
| Opening Day Promotion and Initial Marketing Campaignnot refundable | $15K | $25K | |
| Lease Negotiations Assistancenot refundable | $0 | $5K | |
| Design and Architectural Feesnot refundable | $0 | $80K | |
| Licenses and Permitsnot refundable | $1K | $6K | |
| Leasehold Improvementsnot refundable | $0 | $1.1M | |
| Signagenot refundable | $10K | $78K | |
| Furniture and Fixturesnot refundable | $30K | $40K | |
| POS/Back Office Systemnot refundable | $20K | $30K | |
| Equipmentnot refundable | $200K | $296K | |
| Professional Servicesnot refundable | $3K | $6K | |
| Initial Inventorynot refundable | $45K | $50K | |
| Insurancenot refundable | $6K | $12K | |
| Training Expensesnot refundable | $2K | $10K | |
| Additional Fundsnot refundable | $10K | $100K | |
| Total initial investment | $387K | $1.9M |
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
- $387K – $1.9M
- Middle of category vs category
- Liquid capital req'd
- $10K – $100K
- Top 40% of category vs category
- Franchise fee
- $25K – $40K
- Middle of category vs category
- Royalty
- 6.0%
- typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 2.0% of gross sales |
| Technology fee | $450 |
| Training fee | $2K |
| Transfer fee | $0 |
| Renewal fee | $0 |
| Inventory (initial) | $45K – $50K |
| Total fee load | 8.0% of rev |
What do units actually make?
Source: FDD 2025 · Item 19
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
No Item 19 revenue figure for HTEAO is on file. 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 HTEAO 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
Reported for a subset of outlets rather than the whole system
- Item 19 type
- gross sales
- Range (low → high)
- $849K→$2.1MCited, not corroborated — printed on page 44 of the 2025 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- N/A→$1.5M
- Bottom 25% → top 25%
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 1 / 10
- vs category median 4 / 10 · below
Compared against 781 Quick-Service Restaurants brands
Item 19 · by group
What the filing does disclose
Item 19 of this FDD reports performance in more than one group. We publish no single average for this brand; the groups the filing does disclose are listed below, quoted from its own Item 19 table.
Each row below is quoted from the FDD's own Item 19 table. Gross sales are not profit.
Outlet subsetItem 19 detail
top pct
| Segment | Sample | Avg |
|---|---|---|
| Franchised Stores - Top 10% | 10 | $1.7M |
| Franchised Stores - Top 25% | 24 | $1.5M |
| Franchised Stores - Top 50% | 48 | $1.3M |
| Franchised Stores - Top 75% | 72 | $1.2M |
| Blended (Franchised + Company-owned) - Top 10% | 10 | $1.8M |
| Blended (Franchised + Company-owned) - Top 25% | 26 | $1.5M |
| Blended (Franchised + Company-owned) - Top 50% | 52 | $1.3M |
| Blended (Franchised + Company-owned) - Top 75% | 78 | $1.2M |
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 8.0% (near the Quick-Service Restaurants median).
Disclosure
Item 19 reports outlet revenue, but not in a form that yields a per-outlet average we can compare across brands.
Operator retention
System expanding at 129.8% CAGR over 3 years across 144 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 Hteao 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
- 144
- Opened
- 42
- Last reporting year
- Closed
- 0
- Turnover rate
- 1.5%
- Company-owned
- 13
- Corporate units in the system
- % franchised
- 91%
- vs corporate-owned
- Net growth (3-yr)
- +129.8%
- Net unit change over 3 years
- 3-yr CAGR
- +129.8%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Signed, not yet open
- 177
- 1.23 per open outlet · Item 20 Table 5
- Projected new
- 41
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 9 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
104 current owners across 9 states.
- TX 74
- OK 12
- AL 4
- KS 4
- FL 3
- NM 3
- AR 2
- LA 1
- MO 1
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 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 47
- Loan volume
- $54.9M
- Median loan
- $782K
- 50th percentile
- Charge-off rate
- 0.0%
- on 47 loans · rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 100.0%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 23
- Defaults
- 0
- Typical loan rate
- 7.7%
- avg rate to borrowers
- Franchised industry avg
- 10.6%
- brand beats franchise avg ↓
- Jobs supported
- 1,018
- 1.9 per loan
- Lender concentration
- 23%
- top lender's share
Borrower mix: 94% went to startups / new businesses, 6% to established operators
Franchise vs independent — in snack and nonalcoholic beverage bars, franchised businesses charge off at 10.6% vs 8.9% for independents — franchising is associated with 19% higher SBA default risk in this category.
Top lenders financing Hteao franchisees
Showing 3 of 23 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Hteao from SBA 7(a) FOIA data.
- Principal loss rate
- 0.0%
- Avg SBA guarantee
- 74%
- Avg interest rate
- 7.72%
- Lender concentration
- 23.4%
- Job velocity
- 1.9 per $100K
- NAICS benchmark
- 7.0%
- NAICS 722515
- Jobs supported
- 1,018
Top SBA lendersTop lender holds 23% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Bank Five Nine | 11 | $18.1M | N/A |
| 2 | BancFirst | 7 | $6.0M | 0.0% |
| 3 | Amistad Bank | 4 | $7.7M | N/A |
| 4 | Cadence Bank | 3 | $3.3M | N/A |
| 5 | Frost Bank | 2 | $1.2M | N/A |
| 6 | SouthWest Bank | 2 | $3.0M | 0.0% |
| 7 | The Huntington National Bank | 2 | $2.1M | N/A |
| 8 | Gulf Coast Bank and Trust Company | 1 | $300K | 0.0% |
| 9 | Truist Bank | 1 | $2.5M | N/A |
| 10 | Bank of Central Florida | 1 | $530K | N/A |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| TXTexas | 29 | 0 | 0.0% |
| OKOklahoma | 8 | 0 | 0.0% |
| AZArizona | 3 | 0 | -- |
| TNTennessee | 3 | 0 | -- |
| FLFlorida | 2 | 0 | -- |
| MOMissouri | 2 | 0 | -- |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
With a 0.0% charge-off rate across 47 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 0.0% — 100% below the 16.0% national norm, i.e. lower lender-observed risk.
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.
No litigation required to be disclosed in Item 3
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Whitley Penn LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
HTeaO FC, LLC audited statements of operations, years ended Dec 31 2024 and 2023 (Whitley Penn LLP, Plano TX). 2024 total revenues $13,529,547 comprising franchise fee $3,041,998, royalty $6,656,475, advertising fund $2,217,412, gift card $418,505, other $1,195,157. Net loss $(7,771,161); member's equity $34,683,299. Company changed deferred franchise fee revenue recognition method (Note B).
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 81 / 100 verdict
- 01MINORWide investment range ($387K–$1.9M spread of 392%) suggests inconsistent unit economics or unclear cost structure
- 02MINORExplosive 39.4% YoY unit growth may indicate aggressive recruitment ahead of sustainable sales infrastructure
- 03MED6% royalty on undisclosed revenue creates unpredictable franchisor cash flow and potential pressure on unit profitability
- 04MEDNo litigation disclosed but going concern flag suggests potential hidden disputes or regulatory scrutiny
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 8.0% 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 | 15 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | Protected territory |
| Protected territory | Yes |
| 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 | 25 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 1 |
| Curable defaultsℹ | 4 |
| Mandatory arbitration | Yes |
| Arbitration location | Fort Worth, Texas (AAA offices in city of franchisor's principal place of business) |
| Jury trial waiver | No |
| Governing law | TX |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed in Item 3
Items 10, 11
Training & Operations
- Classroom training
- 27 hrs
- On-the-job training
- 14 hrs
- Training location
- Fort Worth, TX
- Ongoing training
- Required
- Time to open
- 12 mo
- From signing to launch
- Site selection
- Franchisee selects, franchisor approves within 30 days
- Franchisor financing
- Not offered
- Item 10
- POS system
- Revel POS System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Revel POS System
Item 20 · call current owners
Franchisee Contacts
104 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 HTEAO franchise?
The total investment to open a HTEAO franchise ranges from $387K – $1.9M, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do HTEAO franchise owners earn?
Item 19 of the HTEAO FDD discloses outlet figures from $849K to $2.1M but no single average across all outlets. These are gross sales figures, not profit; the Revenue section shows what the filing reports and on what basis. Item 20 of the FDD lists current and former franchisees; asking them directly is the standard way to fill this gap.
Who owns HTEAO?
HTEAO is franchised by HTEAO FC, LLC. Its parent company is HTO LLC. The ultimate parent named in the FDD is HTO Holdco, LLC. Source: FDD Item 1, 2025 filing.
What is Item 19 in the HTEAO 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 HTEAO FDD and qualifies whose outlets they describe.
What is HTEAO's franchise failure rate?
Based on SBA 7(a) loan data, HTEAO has a charge-off rate of 0.0% across 47 loans, meaning 0.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many HTEAO franchise locations are there?
As of their most recent FDD filing, HTEAO has 144 total units in the United States, including 131 franchised units and 13 company-owned units. 42 new units were opened in the latest reporting year.
Is HTEAO a good franchise to buy?
FranchiseVerdict rates HTEAO as a A-grade franchise with a verdict score of 81 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
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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.