Chatime is a growing milk tea franchise with an estimated 3,000 units globally, but only 23 locations in the United States at the time of writing. Originating in Taiwan, Chatime offers several varieties of milk teas such as the classic brewed ones, fruit teas, smoothies, latte, and even juices.

How much does it cost to open Chatime? Expect the investment range to start a Chatime franchise to be around $479,100 to $1,139,200 and the franchise fee would be around $40,000 to $78,000. The mid-range investment is $507,000 for this franchise.

But before you invest in a Chatime, you need to take the time to understand the unique challenges within the United States, fees, and ongoing expenses for this chain below. Click here to take our 7-minute franchise quiz be matched with an opportunity that fits your budget and goals.

Financial Requirements and Fees

The total initial capital to open a traditional store that’s around 600 to 1,500 sq. ft. costs $180,000 to $250,000 on average. Other fees to note are their royalty fee which is 3.5% of the gross sales, Local Marketing Expenditure which is at least 2.5% of the gross sales, and their International Marketing Fee which is 0.5% of the gross sales.

The agreement to run a single-store franchise is 3 years while the master franchise agreement runs for 5 years.

Average Sales / Revenue per Year

CW reported Chatime’s revenue was approximately USD $78 million in 2018. At this time the chain had less than 900 units globally. Fast forward to 2023 and the milk tea chain now has roughly 3,000 locations. Based on this expansion of roughly 233% it wouldn’t be surprising at all to find out the chain increased revenues by 2 – 4 times annual revenue. If 5-year revenue increase held true the chain would be generating $156 million – $312 million dollars annually at this time.

Chatime Franchise Facts

Though milk tea has been around for a while especially in Asian countries such as Hong Kong, China, and Taiwan, Chatime was founded in the year 2005 when there were already a lot of brands competing with each other. However, Chatime’s goal was not to follow traditional tea culture. Rather, they modernized it by using high-tech tea machines to make their teas taste more consistent and keep things high in quality.

Chatime is one milk tea brand that has a lot of flavors and variety of milk tea on their menu. They have the classic brewed teas but they also have fruit teas, latte, smoothies, and mousse. Add-ons include pearls, mango pearls, coffee jelly, grass jelly, pudding, white pearls, aloe vera, mango burst, strawberry burst, green apple burst, and lychee burst. Their milk teas can be served hot or iced and the sugar levels can be adjusted.

You Might Like: Is the Sharetea Franchise a Good Investment? (Cost + Fees)

To franchise Chatime, the first step is to complete the form here and wait for the response. Once they reach out to you, initial discussions will be made wherein they’ll introduce you to the Chatime brand. Once all your questions have been answered and both parties are in agreement, the signing of the contract commences next.

Will you be attending Chatimefest?

Store location consultations and store design follows next. You will then undergo training at their headquarters. By this time, the importation of all your equipment and raw materials for your store follows. You will then plan your marketing launch and then witness your grand opening.

Chatime has several awards through the years:

• World Branding Award in 2014
• Winner of International Innovation Awards, both in Product and Service Solutions categories (2018-2019)
• Won Best Bubble Tea 2021 on Now Toronto
• Winners of the Best Loyalty Program on QSR Media Sandhurst Awards

Chatime is owned by La Kaffa International Co., Ltd. who also owns several food and beverage brands. Their headquarters is located in Taiwan.

How Much Does Chatime Make in Profit?

As of this writing there is no public official report on the exact profits that Chatime makes. But based on some publicly available data we can make some estimated based on data. A report CW mentioned that Chatime’s revenue in Taiwan was TWD $2.2 billion (approximately USD $78 million) in 2018. It’s save to say that the company revenues have grown significantly in the 5 or so years since the report.

This report from Yahoo Finance doesn’t include sales data from Chatime, but it does state that the global bubble tea market was worth USD $2.4 billion in 2019 and is expected to reach USD $4.3 billion by 2027, growing at a CAGR of 7.8% from 2021 to 2027.

Assuming, Chatime’s global revenue has grown to at least $100 million gross sales and applying a 20% estimated profit margin after labor, taxes, leases and cost of goods sold the company would have profited $20 million USD. But the reality is the revenue and profitability of this company is likely much higher than this.

Advantages of a Chatime Franchise

Franchising Chatime can bring you many advantages. Here are a few to note:

A Leading and Popular Brand

Chatime is a popular brand based from the number of units that they have which are over 3,000 stores around the world. The brand is well recognized in Taiwan with more than 1,200 of the locations there. They’ve also won numerous awards from different countries. Chatime is also considered a global leader in the milk tea industry.

The United States may have only 23 stores for now but they’re continuing to expand in the country with the recent one being in Dayton, Ohio. It will be interesting to see how these US based locations perform financially over the next 2 – 3 years as they could be a canary in the coal mine demonstrating if the concept could have legs state side.

Growing Industry

Milk tea used to be a beverage only enjoyed in Asia. Now, milk tea shops can be found everywhere medium to large population center in the United States. The drink that can either be enjoyed hot or cold is so popular that there are over 3,601 milk tea shops in the U.S already. This number seems poised to grow further as the global bubble tea market is expected to reach more than $4 billion in annual value by 2030.

Not Sure What Franchise to Start? Take Our 7-Minute Franchise Business Quiz!

Production Advantages

In 2019, Chatime acquired the largest Taiwanese pearl manufacturer, TEN EN TAPIOCA FOODS CO., LTD, who specializes in “Brown Sugar Pearl” production. This acquisition has allowed Chatime to achieve vertical integration, gaining full access to the global bubble tea supply chain and control of the top-selling ingredient, the Boba Pearl. This strategy has lowered operational costs and reduced the risk of overstock while scaling up business operations. This is a massive production advantage that other boba chains simply do not have.

Menu Variety

One can never run out of choices when they order at Chatime. The selections are plenty ranging from the classic milk teas to ones that are smoothies, fruit teas, and many more. There are also several add-ons to choose from. Offering customers with a variety of premium add ons that cost a little extra has proven to be a profitable strategy for businesses like Starbucks who are generating more than $1 billion in annual revenues with this approach. Sugar levels can also be customized at the establishment.

See Chatime social media.

Pushing Innovation

The Cha Lab Center of Innovation is a research and development facility located in Taipei, Taiwan. It was opened in 2017 with the goal of developing new products and services for Chatime. The goal of this innovation center is to develop new flavors, toppings, and beverages for the chain.

The Cha Lab Center of Innovation is equipped with state-of-the-art facilities, including a tea laboratory, a flavor development lab, and a product testing lab. The center also has a team of experienced researchers and developers who are dedicated to creating new and innovative products for Chatime. How many other franchises can boast a research lab like this?

Growth

The milk tea industry is growing at a compound annual growth rate (CAGR) of 8.9% from 2023 to 2030. With this information one can see that milk tea is here to stay and that there is a huge market that’s into drinking these beverages. he U.S. bubble tea market alone is estimated at $240 million and is expected to double or triple in the next few years.

Challenges of a Chatime Franchise

Chatime can also pose some challenges when you decide to franchise them. Here are a few to expect:

Competition

The milk tea industry may be huge but the competition is also tough. There are also other big named brands competing against each other such as Share Tea, Gong Cha, Happy Lemon, and Coco. Also, there are plenty of entrenched coffee shops like Starbucks that could capture market share if desired. Cha Time will need to continuously spend on big ads to fight against these names and win-over the growing market share in the United States to become the milk tea provider of choice.

Chatime offers gift cards.

Limited Consumers

The average Chatime consumer is around 15-35 years old. This means that young adults mostly enjoy the drink rather than a demographic that consist of people of all ages. This is certainly a lot of consumers, but the beverage doesn’t have as much opportunity as coffee in the United States. Nearly half of the young adults ages 18 to 24, drink coffee. An astounding 70% of seniors are partake in coffee and it’s unlikely this demographic will every switch over from this beverage of choice.

Is the Chatime Franchise Right For You?

Chatime is considered one of the leading brands in the milk tea industry and it shows just by looking at the number of their locations and their revenue. However, their brand recognition in the United States and around the world might only be getting started. It would be wise to let a legal advisor go over the financial agreements and documents to really study the terms and how it would help you as a potential franchisee.

What is an alternative Chatime franchise?

If you’re still looking for another milk tea brand, check out Gong Cha. This tea has around 1,900 locations and also originated in Taiwan. The name translates to “Tribute tea for the emperor” which means that the tea they use is of the highest and finest quality fit for an emperor.

To franchise Gong Cha, expect investments to reach $177,430 to $335,400 with a franchise fee of $41,500.

Chatime can be the milk tea brand you have been looking for to franchise but do keep in mind that there’s a lot of competition out there. No matter what decision you make with this franchise, I’ve got to admit this is one of the more interesting concepts out there right now considering the amount of white-space that’s still available for this brand in the United States.