Background: A New Benchmark for a Bubble Tea Chain
In early 2022, discussions between a bubble tea chain’s leadership and its franchisees drew attention to a bold business plan. The core issue at the heart of the talks was a benchmark of 150 cups per day per store. While growth targets are common in franchise networks, questions quickly emerged about whether such a target is realistic across different locations, markets, and store formats.
The conversations reportedly included long-time executives and franchise program leaders as they debated the practicality of the proposed daily volume. Franchisees say the initial agreement appeared to set a high bar that did not fully account for local conditions, labor costs, supply chain variability, and seasonal fluctuations. As is typical in franchising, the goal is to balance aggressive expansion with sustainable profitability—but some operators now worry the math under the current model may not add up for many store owners.
The Benchmark: Why 150 Cups a Day Stood Out
Targeting 150 cups daily translates to a substantial revenue floor—if achieved consistently. Supporters argued that a higher benchmark could accelerate unit economics, attract investors, and standardize performance across the network. Critics, however, point to real-world friction: urban and suburban sites, foot traffic variability, competition, and the costs of ingredients, labor, and rent. Several franchisees contend that the benchmark feels detached from the day-to-day realities of running a small business, especially in markets with tighter margins.
Franchisees’ Concerns: What They’re Saying
Franchise owners familiar with the chain’s operations describe a pattern where upfront fees and ongoing royalties are paired with a performance target that may not reflect each location’s potential. Common concerns include:
- Profitability: Even with strong beverage sales, other costs—rent, staff salaries, and equipment maintenance—can erode margins if the per-day target isn’t consistently met.
- Support and training: Operators want ongoing assistance with site selection, local marketing, and supply-chain stability to help them reach or exceed benchmarks.
- Territorial and market variation: Some locations experience higher competition or different consumer behavior, making uniform targets less meaningful.
- Exit and renewal terms: Franchisees are watching renewal and buyout terms closely, seeking flexibility if the model proves unsustainable on the ground.
What This Means for the Franchise Network
The tensions around the benchmark touch broader questions about how fast a franchise system should scale and how much autonomy local operators should retain. For investors and lenders observing the bubble tea sector, the episode serves as a reminder that growth targets must be tempered by realistic cash flow forecasting and robust field support. If a significant portion of stores struggle to hit the benchmark, there could be cascading effects on royalty revenue, franchisor brand value, and franchisee confidence.
Possible Paths Forward
Experts suggest several routes to resolve the dispute constructively:
- Reassessing the benchmark with regional modifiers to reflect market realities.
- Enhancing support programs, including more frequent field visits, co-op marketing funds, and data-driven performance coaching.
- Introducing performance tiers or milestone-based incentives to reward progress while preserving profitability during growth phases.
- Transparent disclosure of unit economics and full-margin analysis to empower potential franchisees to make informed decisions.
What’s Next
As the bubble tea sector continues to attract new entrants, establishing a resilient, transparent franchise model will be crucial. Franchisees are eyeing the next steps—whether through negotiations, revised targets, or additional support measures—that could shape how the brand grows in the coming years. The outcome could serve as a bellwether for other beverage franchises navigating similar tensions between ambitious sales targets and practical profitability.
