The bubble tea industry valued at $2.75 billion with over 3,000 milk tea stores in the United States. What’s more is that the future of the bubble tea industry looks even brighter with annual sales growth projected through 2030.

One milk tea brand to check out is Ding Tea. Based in Taiwan, Ding Tea offers different kinds of milk tea on their menu such as flavored teas, coffee, fruit juices, sparkling beverages, and yogurt. This boba brand has over three hundred locations worldwide with 100 of them operating in the United States.

How much does it cost to open Ding Tea? To franchise this milk tea brand, expect the investment range to invest between $195,240 to $324,170 ($259,500 median cost) and the franchise fee of $30,000 to get started.

Is Ding Tea worth this level of investment considering the revenue expectations? Reader the risks and financial opportunity of investing in this this Taiwan-based boba brand franchise. Take our 7-minute quiz to find the best boba tea franchise based on your budget and region.

Financial Requirements and Fees

The following are the financial expenses you can expect when you franchise Ding Tea:

Other fees to note are their advertising expenditures which is 3% of the gross monthly sales. As of the time of this writing, they do not have a marketing fund but Ding Tea has the right to charge franchisees with this fund when they decide to establish it. This fund is also 3% of the gross monthly sales.

Ding Tea also provides training prior to the opening of their shop but should you need additional training since the company will charge you $500 per person per day.

Average Sales / Revenue per Year

At present there is no public information as to how much Ding Tea makes annually. Sadly, Ding Tea does not make this information publicly available. But an estimate on a small bubble tea shop can generate about $1,000 to $3,000 or $360,000 to $1,080,000 annually.

Based on other concepts the average profit margin of bubble tea is about 18% after overhead like lease, electricity, labor, taxes, and ingredients like tea, milk, sweeteners, tapioca pearls, and fruit.

How Much Does Ding Tea Make in Profit?

There is a lack of public financial statements from Ding Tea. Fortunately, we do have insights from competitor boba tea concepts that operate at a profit margin around 18%. This means for every $1 million dollars in sales the typical bubble tea business would be generate $180,000 in profit after all the expenses. Of course keep in mind, the profitability of your business will be different based on operations, ingredients used, and labor costs in your region.

Make sure to review your personal goals for the profitability of any type of business before investing. In many cases, franchise owners need to operate multiple units to hit profit goals.

Ding Tea Franchise Facts

Ding Tea was founded in Taiwan in 2004 by Xu Wei-xiang. He believed that despite the growing number of milk tea brands, they were inconsistent. Thus, he went on a mission to develop a better quality of tea and promote a new tea culture through Ding Tea.

Ding Tea’s menu consists of fresh teas, flavored teas, latte, milk teas, coffee, fruit juices, Yakult or yogurt drinks, hot drinks, and slush. For toppings, you can add golden boba, coconut jelly, grass jelly, coffee jelly, rainbow jelly, star fruit jelly, egg pudding, aloe vera, sea cream, red bean, and crystal boba to your drinks.

To franchise Ding Tea, reaching out is the first step and you may contact them via their email at [email protected] or through their contact number at +886-4-22530011. Once received you’ll get a quick franchise discussion with a representative.

You Might Like: Is Chatime Worth the $507k Investment? (Cost + Analysis)

Going through the franchise contract comes next and if you find things are agreeable with you, you can make things official by signing with them. You’ll also be able to consult with them your store options as well as having your proposed location be examined. The training and construction phase of the startup process comes next followed by a grand opening.

Ding Tea has the following options and qualifications for the model of their franchised store:

• You can choose a Personal Store or Rented Store. Ding Tea has not explained further what the difference between these two are so it’s best to discuss this with them when you have your first initial franchise discussion.
• Store location needs to be evaluated and confirmed by franchise headquarters first.
• Initial franchise Guarantee Payment: $200,000 Promissory Note.

They also have the following qualifications for interested franchisees:

• Over 20 year old and has good credit
• Has a lot of enthusiasm and insistence in the tea industry.
• Franchisees are required to participate in training for learning skills.
• All operational materials related to “Ding Tea” must be purchased directly from headquarters to maintain consistency for quality and brand.

Ding Tea’s headquarters is located in Taichung, Taiwan.

Advantages of a Ding Tea Franchise

There are a few advantages you can look forward to when you franchise Ding Tea near you:

Demand

Milk Tea is a beverage that’s very much in-demand at the moment. As mentioned above there are over 3,000 stores in the United States and more are expected to open. In fact, the milk tea industry has a compound annual growth rate of 8.9%. This overall market growth should provide Ding Tea and other bubble tea concepts with the tailwind they need to grow.

Celebrate with Ding Tea.

Variety

Ding Tea has a variety of milk tea on their menu which means that customers who come in have a higher chance to come back just to try more of their flavors. Aside from milk tea, they also have flavored teas, yogurt drinks, coffee, latte, and more.

Number of Locations

Ding Tea has over 100 locations in the United States and is only just behind by a few number of locations from big brands such as Gong Cha (190 locations) and ShareTea (135 locations). Since the number of locations is still small in the United States, it means there’s plenty of runway for expansion with this concept.

Challenges of a Ding Tea Franchise

Running a business will have its challenges and here are a few you can expect when it comes to franchising Ding Tea:

Keeping Up with Market Trends: Flavor innovation comes fast in the bubble tea industry. It’s important for Ding Tea to remain flexible and adapt to new flavor trends or “it” drinks to keep customers interested. Some recent flavor innovations in the bubble tea industry include:

1. Lychee Jelly: This was a popular addition from the start. Lychee jelly adds a sweet, fruity flavor and a unique texture to the drink.
2. Salted Cheese Foam Caps: This is a recent trend among consumers. The salty, creamy cheese foam contrasts with the sweet tea, creating a unique flavor profile.
3. Real Taro in Taro Milk Tea: Using real taro instead of artificial flavoring provides a more authentic and natural taste.

Competition

Ding Tea has some tough competition particularly in the United States. There are already big brands with lots of locations such as Gong Cha, Sharetea, Coco, Happy Lemon, and Chatime. Ding Tea will need to up their game when it comes to marketing their brand if they want to compete with the rest.

Follow Ding Tea on social media.

Lack of Marketing and Brand Awareness: If people don’t know about your bubble tea shop or the drinks you offer, they won’t come to purchase them. Unfortunately, Ding Tea is not a household name in the United States. This means it will be up to the local franchise operator to market the business effectively in each market. One of the major reasons investors put money into a franchise is brand recognition. But in this scenario, the fact is not many consumers know about this brand in the United States.

Slow Expansion in the United States

Ding Tea may seem strong with their store count standing at 100 locations but as of the time of this writing, there is no other news that reports if they have any upcoming stores opening around the United States. A lack of information on their expansion can have potential franchisees taking a step backwards from signing with them.

Is the Ding Tea Franchise Right For You?

As of the time of this writing, it is difficult to assess how profitable Ding Tea can be for you since there is a lack of financial information made publicly. So it’s best to contact directly with them if you’re really interested and have a financial advisor or legal advisor go through the Franchise Disclosure Document before signing the contract.

What is an alternative Ding Tea franchise?

One milk tea chain you can check out is Sharetea. This brand is also based in Taiwan and has 400 locations worldwide.

To franchise Sharetea, expect a minimum investment of $300,000 and a franchise fee of $48,000. You can check out our full guide in franchising Sharetea here.

The milk tea business is booming and with the right brand and location, your milk tea franchise could just grow into a profitable business. May this guide help you choose the right milk tea business venture.