Bottom line
- Total investment $169K – $378K including a $37K franchise fee, 4.0% ongoing royalty.
- No Item 19 financial performance data disclosed — the franchisor chose not to publish revenue figures.
- Rated STRONG with a risk score of 46/100. SBA loan default rate of 0.0% across 45 loans (below the industry average).
- No Item 19 financial performance representation. Without franchisor-disclosed revenue data, you'll need to gather unit economics directly from existing franchisees.
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Kung Fu Tea unit return on the cash you put in?
Unlevered ROIC · per unit
31%
In Yale's "attractive" band (30–60%)
Overview
About
Kung Fu Tea franchisees operate quick-service boba tea shops, preparing and serving customized tea beverages with tapioca pearls, fruit additions, and milk options. Day-to-day operations include managing point-of-sale systems, training staff on drink preparation, inventory management for tea leaves and toppings, and customer service in a high-traffic retail environment.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
This franchisor did not disclose financial performance representations in Item 19, or our extractor could not parse them.
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 23 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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Kung Fu Tea presents meaningful risk due to absent financial disclosures, stagnant unit growth, recent litigation, and an opaque royalty structure that could erode profitability on unknown revenues.
Score breakdown · what drove the 46 / 100 rating
- 01MEDNo average revenue or net income disclosed in FDD Item 19 — impossible to validate ROI claims or compare to $169k-$378k investment
- 02MINORMinimal unit growth (2.4% YoY) on 388-unit system suggests market saturation or franchisee struggles in the boba tea category
- 03HIGHRecent trademark litigation (Dec 2023–Mar 2024) indicates brand protection concerns and potential IP vulnerabilities competitors may exploit
- 04MEDHigh royalty burden (4% of gross sales) with no disclosed average revenue means franchisees could pay $5k-$15k+ annually with unknown profit margins
- 05MED10-year term locks franchisees into a struggling growth trajectory with limited exit flexibility
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
80 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Kung Fu Tea · FDD (2025) PDF