The Spice & Tea Exchange Franchise Cost, Revenue & Review 2026
- Investment
- $299K – $532K
- Disclosed sales
- $543K
- gross sales, not profit
- SBA charge-off
- 5.6%
- on 41 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
The Spice & Tea Exchange is a retail franchise selling loose-leaf teas, hand-blended spices, salts, and gifts in an aromatic, boutique setting. Franchisees run shops blending and selling products to home cooks and gift buyers.
FranchiseVerdict summary · 2026
A The Spice & Tea Exchange franchise requires a total initial investment of $299K – $532K, including a $39K franchise fee and an ongoing 7.0% royalty[2]. Per the 2025 FDD, average unit revenue was $543K[2]. SBA 7(a) loans show a 5.6% charge-off rate across 41 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 scored7 of 8 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $299K – $532K
- 7th pct Food Retail
- Avg gross sales
- $543K
- Incl. company outlets1st pct Food Retail
- Royalty
- 7.0%
- 6th pct Food Retail
- Units
- 94
- 9th pct Food Retail
- SBA charge-off
- 5.6%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Food Retail · color = vs category peers
Green = favorable by >10% vs Food Retail 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 $299K – $532K including a $39K franchise fee, 7.0% ongoing royalty.
- RETURNSAverage unit revenue of $543K/year (median $487K) (includes company-owned outlets).
- RISKVerdict A (Strongest tier), verdict score 71/100 (higher is better). SBA loan charge-off rate of 5.6% across 41 loans (near or below the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHPositive: net +4 franchised outlets in the latest year (8 opened, 4 closed); 7 signed but not yet open (Item 20).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- The Spice & Tea Exchange Franchising, LLC
- Parent company
- The Spice & Tea Exchange Holdings, LLC
- FDD Item 1, page 6 of the 2025 FDD
- Predecessor
- Old Spice Traders, Inc.
- Prior franchisor entity
- CEO title
- CEO
- Amy Parnell Freeman
- Incorporated in
- FL
- HQ
- 210 Marshall Circle, St. Augustine, FL 32086
- Auditor
- Tama, Budaj & Raab, P.C.
- Audited financials
- Franchisor revenue
- $4.2M
- vs $4.1M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Independent franchisee associations
- Franchise Advisory Council (FAC)
- Franchisee Advisory Board
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Affiliated brands
- and predecessor
- Old Spice Traders
Other brands the franchisor or its parent operates (Item 1).
Overview
About
- CEO
- Amy Parnell Freeman
- Headquarters
- FL
- Founded
- 2008
- FDD year
- 2025
- States available
- 37
Can you afford it, and what does the money buy?
Entry cost runs 43% above the typical food retail franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown13 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Franchise Fee - Single Unitnot refundable | $39K | $39K | |
| Establishment Feenot refundable | $135K | $150K | |
| Seasonal Inventory Ordernot refundable | $2K | $20K | |
| Construction/Build-Out, Tea Bar Equipment, and Other Dress-Out | $104K | $238K | |
| Grand Opening Advertising | $3K | $5K | |
| Professional Fees | $500 | $4K | |
| Utility Deposits | $250 | $500 | |
| Office Equipment | $350 | $4K | |
| Rent and Security Deposits | $2K | $10K | |
| Insurance (premium for first year) | $1K | $4K | |
| State and Local Business Licenses, Permits and Filing Fees | $500 | $4K | |
| Training Expenses | $2K | $5K | |
| Additional Funds - 6 months | $10K | $50K | |
| Total initial investment | $299K | $532K |
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
- $299K – $532K
- Top 40% of category vs category
- Liquid capital req'd
- $10K – $50K
- Top 40% of category vs category
- Franchise fee
- $39K – $39K
- Top 40% of category vs category
- Royalty
- 7.0%
- typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 7.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $300 |
| Training fee | $2K |
| Transfer fee | $15K |
| Renewal fee | $10K |
| Inventory (initial) | $2K – $15K |
| Total fee load | 8.0% of rev |
What do units actually make?
Average unit sales run 52% below the food retail norm.
Includes company-owned outlets
Source: FDD 2025 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for The Spice & Tea Exchange until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for 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.
Total invested capital · disclosed
$445K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
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, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one The Spice & Tea Exchange 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 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.
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%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for 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.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
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
Includes company-owned outlets
- Avg gross sales
- $543K
- Per unit, per year
- Median gross sales
- $487K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Full Year Units
- Sample size
- 84 outlets
- vs category median 23 · large
- Range (low → high)
- $65K→$2.6MCited, not corroborated — printed on page 55 of the 2025 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 6 / 10
- vs category median 0 / 10 · above
Compared against 142 Food Retail brands
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 $543K/year in gross sales. Revenue-to-investment ratio: 1.3x. Includes company-owned outlets.
Fee burden
Total ongoing fee load of 8.0% (near the Food Retail median).
Disclosure
Transparency score 6/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System expanding at 8.1% CAGR over 3 years across 94 units — operators are staying and new ones are joining.
Multi-unit rate
Only 6% of franchisees own multiple units. Could indicate challenging economics or a young system where operators haven't had time to expand.
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 Food Retail medians
How The Spice & Tea Exchange Compares
Category median of published Food Retail 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
- 94
- Opened
- 8
- Last reporting year
- Closed
- 4
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 4.3%
- Company-owned
- 1
- Corporate units in the system
- % franchised
- 99%
- vs corporate-owned
- Multi-unit owners
- 6.2%
- Net growth (3-yr)
- +8.1%
- Net unit change over 3 years
- 3-yr CAGR
- +8.1%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 3
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 7
- 0.07 per open outlet · Item 20 Table 5
- Projected new
- 7
- Franchisor's next-year forecast
- Transfer rate
- 3.2%
- Owners selling to other franchisees
- Termination rate
- 1.1%
- Franchisor-initiated terminations
- Ceased ops
- 1.1%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 37 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.
37
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.
- Total loans
- 41
- Loan volume
- $8.6M
- Median loan
- $232K
- 50th percentile
- Charge-off rate
- 5.6%
- on 41 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)
- 94.4%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 18
- Defaults
- 1
- Typical loan rate
- 7.4%
- avg rate to borrowers
- Franchised industry avg
- 21.6%
- brand beats franchise avg ↓
- Jobs supported
- 305
- 3.7 per loan
- Lender concentration
- 21%
- top lender's share
Borrower mix: 97% went to startups / new businesses, 3% to established operators
Franchise vs independent — in all other specialty food stores, franchised businesses charge off at 21.6% vs 22.8% for independents — franchising is associated with 5% lower SBA default risk in this category.
Top lenders financing The Spice & Tea Exchange franchisees
Showing 3 of 18 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 The Spice & Tea Exchange from SBA 7(a) FOIA data.
- Principal loss rate
- 3.1%
- Avg SBA guarantee
- 72%
- Avg interest rate
- 7.40%
- Avg chargeoff amount
- $255K
- Lender concentration
- 20.5%
- Job velocity
- 3.7 per $100K
- NAICS benchmark
- 14.4%
- NAICS 445299
- Jobs supported
- 305
Top SBA lendersTop lender holds 21% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Stearns Bank National Association | 8 | $1.6M | 0.0% |
| 2 | The Huntington National Bank | 8 | $1.4M | N/A |
| 3 | Fifth Third Bank | 6 | $1.1M | 16.7% |
| 4 | Cadence Bank | 2 | $554K | 0.0% |
| 5 | Newtek Small Business Finance, Inc. | 2 | $364K | 0.0% |
| 6 | First Bank of the Lake | 2 | $575K | N/A |
| 7 | Manufacturers and Traders Trust Company | 2 | $286K | N/A |
| 8 | Pioneer Bank & Trust | 1 | $166K | 0.0% |
| 9 | BCB Community Bank | 1 | $250K | 0.0% |
| 10 | Community First Capital Corp | 1 | $150K | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| OHOhio | 5 | 0 | 0.0% |
| FLFlorida | 3 | 0 | 0.0% |
| INIndiana | 3 | 0 | -- |
| MIMichigan | 3 | 0 | -- |
| TNTennessee | 3 | 0 | 0.0% |
| TXTexas | 3 | 0 | 0.0% |
| MDMaryland | 2 | 0 | -- |
| NJNew Jersey | 2 | 0 | 0.0% |
| PAPennsylvania | 2 | 0 | 0.0% |
| AKAlaska | 1 | 0 | -- |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
SBA loans charge off at 5.6% — 65% 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
Negative franchisor net worth of -$468,730 despite strong net income of $1.64M on $4.15M revenue. No litigation, bankruptcy, or going-concern issues, and Item 19 is disclosed with audited financials. Established 2008 franchisor with 94 units and healthy 8.1% net growth.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
No litigation required to be disclosed
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Tama, Budaj & Raab, P.C.
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Member's equity is negative (-$468,730) as of 12/31/2024 due to $3,000,000 in distributions during 2024; net income remained strongly positive at $1,639,211
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 71 / 100 verdict
- 01MINORNegative franchisor equity: -$468,730
- 02MINORPositive net income $1,639,211 on revenue $4,150,833
- 03MINORNo litigation, no bankruptcy, no going-concern
- 04MINOR94 units, 8.1% net growth, low turnover 4.3%
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 | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 4 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 1 mi |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Not allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 25 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 3 |
| Curable defaultsℹ | 2 |
| Mandatory arbitration | No |
| Arbitration location | Palm Harbor, Florida (mediation, not binding arbitration) |
| Jury trial waiver | Yes |
| Governing law | Florida |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed
Items 10, 11
Training & Operations
- Classroom training
- 32 hrs
- On-the-job training
- 71 hrs
- Training location
- On-site and corporate
- Ongoing training
- Required
- Time to open
- 4 mo
- From signing to launch
- Site selection
- franchisee
- Franchisor financing
- Not offered
- Item 10
- POS system
- TSTE® point-of-sale system
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: TSTE® point-of-sale system
Item 20 · call current owners
Franchisee Contacts
117 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 The Spice & Tea Exchange franchise?
The total investment to open a The Spice & Tea Exchange franchise ranges from $299K – $532K, with an initial franchise fee of $39K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do The Spice & Tea Exchange franchise owners earn?
According to Item 19 of the The Spice & Tea Exchange FDD, the average gross sales per unit is $543K. The median is $487K. Important context: Includes company-owned outlets. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns The Spice & Tea Exchange?
The Spice & Tea Exchange is franchised by The Spice & Tea Exchange Franchising, LLC. Its parent company is The Spice & Tea Exchange Holdings, LLC. Source: FDD Item 1, 2025 filing.
What is Item 19 in the The Spice & Tea Exchange 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 The Spice & Tea Exchange FDD and qualifies whose outlets they describe.
What is The Spice & Tea Exchange's franchise failure rate?
Based on SBA 7(a) loan data, The Spice & Tea Exchange has a charge-off rate of 5.6% across 41 loans, meaning 5.6% 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 The Spice & Tea Exchange franchise locations are there?
As of their most recent FDD filing, The Spice & Tea Exchange has 94 total units in the United States, including 93 franchised units and 1 company-owned units. 8 new units were opened in the latest reporting year.
Is The Spice & Tea Exchange a good franchise to buy?
FranchiseVerdict rates The Spice & Tea Exchange as a A-grade franchise with a verdict score of 71 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.