Kokee Tea Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Kokee Tea is a bubble tea franchise serving fresh-brewed milk teas, fruit teas, and boba drinks. Franchisees run the shops, managing drink prep, ingredient inventory, and counter service.
FranchiseVerdict summary · 2026
A Kokee Tea franchise requires a total initial investment of $147K – $560K, including a $25K franchise fee and an ongoing 5.0% royalty[2]. Per the 2024 FDD, average unit revenue was $512K[2]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $147K – $560K
- 12th pct Service Resta…
- Avg gross sales
- $512K
- Outlet subset3rd pct Service Resta…
- Royalty
- 5.0%
- 11th pct Service Resta…
- Units
- 28
- 55th 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 $147K – $560K including a $25K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $512K/year (reported for a subset of outlets rather than the whole system).
- RISKVerdict A (Strongest tier), verdict score 64/100 (higher is better).
- GROWTHSystem growing at 86.7% CAGR over 3 years with 28 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Kokee Tea, LLC
- CEO title
- President
- Hyun Kim
- Incorporated in
- DE
- HQ
- 8965 Guilford Road, Suite 160, Columbia, MD 21046
- Auditor
- Chevron & Rockers, LLP
- Audited financials
- Franchisor revenue
- $723K
- vs $534K prior year
Overview
About
- CEO
- Hyun Kim
- Headquarters
- MD
- Founded
- 2018
- FDD year
- 2024
- States available
- 5
Can you afford it, and what does the money buy?
Entry cost runs 46% below the typical quick-service restaurants franchise.
Source: FDD 2024 · Items 5–7
Full Item 7 breakdown9 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $25K | $25K | |
| Lease Depositnot refundable | $5K | $30K | |
| Construction & Build Out Costsnot refundable | $40K | $300K | |
| Fixtures & Equipmentnot refundable | $29K | $60K | |
| Initial Inventorynot refundable | $10K | $10K | |
| Professional Feesnot refundable | $2K | $2K | |
| Advertisingnot refundable | $1K | $1K | |
| Initial Training | $1K | $3K | |
| Additional Fundsnot refundable | $34K | $129K | |
| Total initial investment | $147K | $560K |
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
- $147K – $560K
- Top 40% of category vs category
- Liquid capital req'd
- $34K – $129K
- Bottom third — review vs category
- Franchise fee
- $25K – $25K
- Top 40% of category vs category
- Royalty
- 5.0%
- percentage · 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 |
| Transfer fee | $13K |
| Renewal fee | $13K |
| Inventory (initial) | $10K – $10K |
| Total fee load | 6.0% of rev |
A 6.0% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 58% below the quick-service restaurants norm.
Reported for a subset of outlets rather than the whole system
Source: FDD 2024 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$82K
16.0% margin
Unlevered ROIC
19%
EBITDA / total invested capital
Payback
5.3 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Kokee Tea unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
19%
Below the 30–60% attractive-franchise band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Kokee Tea units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$922K
on $4.6M purchase
Total debt
$3.7M
SBA $2.3M + senior + seller note
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: 2024 FDD
Financial Performance
Reported for a subset of outlets rather than the whole system
- Avg gross sales
- $512K
- Per unit/yr · from the Item 19 franchised-cohort breakdown (no single system-wide average disclosed)
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- average sales by segment
- Sample size
- 19
- vs category median 20
- Range (low → high)
- $378K→$607K
- Cohort dispersion (min → max)
- Reporting year
- 2023
- Fiscal year the figures cover
- Source filing
- FDD 2024
- Disclosed in the 2024 filing, covering 2023
- Transparency
- 3 / 10
- vs category median 4 / 10 · below
Compared against 782 Quick-Service Restaurants brands
Cohort breakdown2 segments · Item 19
Item 19 detail
Franchisor's total revenue based on most recent audited financial statements per Item 8.I ($723,101, FY2023). The audited balance sheet, statements of income, and changes in owners' equity tables in Exhibit C did not contain extractable numeric figures in the source text, so total assets/liabilities, net worth, and net income could not be captured.
By state
| Segment | Sample | Avg |
|---|---|---|
| VA | 7 | $378K |
By service line
| Segment | Sample | Avg |
|---|---|---|
| georgia texas alabama stores | 19 | $512K |
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $512K/year in gross sales. Revenue-to-investment ratio: 1.4x. Reported for a subset of outlets rather than the whole system.
Fee burden
Total ongoing fee load of 6.0% — below the Quick-Service Restaurants average of 7.9%.
Disclosure
Transparency score 3/10 — moderate disclosure depth. Average and range data are available but detailed cohort breakdowns may be limited.
Operator retention
System expanding at 86.7% CAGR over 3 years across 28 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 Kokee Tea Compares
Is the system healthy?
Source: FDD 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 28
- Opened
- 5
- Last reporting year
- Closed
- 0
- Turnover rate
- 0.0%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- +86.7%
- Net unit change over 3 years
- 3-yr CAGR
- +86.7%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 5
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 1
- Reacquired (3yr)
- 0
- Franchisor bought back
- Transfer rate
- 3.6%
- Owners selling to other franchisees
- Continuity rate
- 100.0%
- Units that stayed open
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 5 states 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.
5
states with franchisees (per FDD Item 12)
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 2 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 2
- Loan volume
- $350K
- Median loan
- $175K
- 50th percentile
- Charge-off rate
- N/A
- limited sample (2 loans) — rate not shown below 10
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
- 2
- 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
Kokee Tea presents caution-level risk due to undisclosed profitability metrics, going concern status, and modest unit growth that obscures the true financial viability of franchise investment.
Litigation (Item 3)
No litigation is required to be disclosed in this item.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Chevron & Rockers, 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 verdict
- 01MEDNo Item 19 (Average Unit Volume) disclosed despite $512K avg revenue claim — cannot verify actual profitability or ROI
- 02HIGHGoing Concern status is FALSE — indicates potential franchisor financial instability or undisclosed operational challenges
- 03MINORHigh investment range ($147K-$559K) with opaque net income creates unclear path to break-even and ROI timeline
- 04MEDOnly 28 units with 21.7% YoY growth is modest for a tea franchise — limited scale and market validation
- 05MINOR5% royalty on gross revenues (not net) means franchisees pay royalties even during unprofitable months
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 6.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 15 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 3 |
| Territory type | exclusive |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory radius | 2 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| 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 |
| Mandatory arbitration | Yes |
| Arbitration location | Columbia, Maryland |
| Jury trial waiver | Yes |
| Governing law | MD |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation is required to be disclosed in this item.
Suppliers & sourcing12 categories · Item 8
Supplier requirements
| Category | Approval | Kickback |
|---|---|---|
| Branded retail merchandise / apparelfranchisor-owned | Required | — |
| Equipment, cabinets, gift bags and other suppliesfranchisor-owned | Required | Equipment and Operations Portion: 35% to 40% of equipment required initially; required cost is 35% to 40% for new openings. |
| Food products / ingredientsfranchisor-owned | Required | Affiliate revenue $602,717 from tea supplies for 17 stores (avg $35,453.97/store); required items include logo cup & bag, flavor syrup, powder, topping, logo uniform, Kokee Tea logo products. Milk and other local items not required. |
| Uniformsfranchisor-owned | Required | — |
| Advertising and marketing materials | Required | — |
| Computer hardware and software / POS | Required | — |
| Fixtures and furnishings | Required | — |
| General approved products / other supplies | Required | Franchisor may receive payment from suppliers for the right to do business with the system (supplier rebates considered in approval). Total franchisor revenue $723,101; revenues from required purchases/leases $25,000 (3.46% of total). |
| Insurance | Required | — |
| Real estate / leasing | Required | — |
| Signage | Required | — |
| Store construction / build-out | Required | — |
Items 10, 11
Training & Operations
- Classroom training
- 15 hrs
- On-the-job training
- 57 hrs
- Training location
- Columbia, MD and privately-owned cafes
- Ongoing training
- Required
- Time to open
- 3 mo
- From signing to launch
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
Items 5 & 11
Franchisor Support
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Kokee Tea franchise?
The total investment to open a Kokee Tea franchise ranges from $147K – $560K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Kokee Tea franchise owners earn?
According to Item 19 of the Kokee Tea FDD, the average gross sales per unit is $512K. Important context: Reported for a subset of outlets rather than the whole system. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Kokee 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 Kokee Tea FDD and qualifies whose outlets they describe.
What is Kokee Tea's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Kokee 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 Kokee Tea franchise locations are there?
As of their most recent FDD filing, Kokee Tea has 28 total units in the United States, including 28 franchised units and 0 company-owned units. 5 new units were opened in the latest reporting year.
Is Kokee Tea a good franchise to buy?
FranchiseVerdict rates Kokee Tea as a A-grade franchise with a verdict score of 64 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?
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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.