Hteao Franchise Cost, Revenue & Review 2026
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 does not disclose unit-level revenue (no Item 19). 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 →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $387K – $1.9M
- 64th pct Service Resta…
- Avg gross sales
- N/A
- Outlet subset
- Royalty
- 6.0%
- 46th pct Service Resta…
- Units
- 144
- 80th 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 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 $387K – $1.9M including a $40K franchise fee, 6.0% ongoing royalty.
- RETURNSHTeaO 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).
- RISKVerdict A (Strongest tier), verdict score 80/100 (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).
- 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
- Ultimate parent
- HTO Holdco, LLC
- 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 74% above the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown26 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 | |
| Initial Franchise Fee (Non-Traditional Venue)not refundable | $25K | $25K | |
| Design and Architectural Fees (Non-Traditional Venue)not refundable | $8K | $55K | |
| Licenses and Permits (Non-Traditional Venue)not refundable | $500 | $2K | |
| Total initial investment | $476K | $2.2M |
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%
- percentage · 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
HTEAO 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 HTEAO unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
9%
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
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).
Reported for a subset of outlets rather than the whole system
- Item 19 type
- gross sales
- Range (low → high)
- $849K→$2.1M
- Cohort dispersion (min → max)
- Quartile band
- N/A→$1.5M
- Bottom 25% → top 25%
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2025
- The FDD edition these figures were read from
- Transparency
- 1 / 10
- vs category median 4 / 10 · below
Compared against 782 Quick-Service Restaurants brands
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 average).
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 averages
How Hteao Compares
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
3-year detail · Item 20
- Opened (3yr)
- 42
- Closed (3yr)
- 2
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 14
- Reacquired (3yr)
- 3
- Franchisor bought back
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.
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%
- 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.
Premium insight
SBA Lending Report
Deep-dive into Hteao's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 6 states
- Startup risk premium and job creation velocity
- 7-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
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
Significant transparency gaps combined with going concern status and explosive growth create elevated risk; profitability data absence makes ROI assessment impossible.
Litigation (Item 3)
No litigation required to be disclosed in Item 3
Largest disclosed settlement: $75,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Whitley Penn 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 80 / 100 verdict
- 01MEDNo average revenue or net income disclosed (Item 19) — impossible to assess profitability or ROI
- 02HIGHGoing Concern status is FALSE — indicates potential financial instability or liquidity issues at franchisor level
- 03MINORWide investment range ($387K–$1.9M spread of 392%) suggests inconsistent unit economics or unclear cost structure
- 04MINORExplosive 39.4% YoY unit growth may indicate aggressive recruitment ahead of sustainable sales infrastructure
- 05MED6% royalty on undisclosed revenue creates unpredictable franchisor cash flow and potential pressure on unit profitability
- 06MEDNo 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 |
| 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
FDD download
HTEAO · FDD (2025) PDF
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?
HTEAO 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 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 80 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 HTEAO, 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.