When it comes to buying a franchise, Ding Tea is one of the most popular and successful choices out there.
Offering an array of drinks, sandwiches, and other snacks, this Taiwanese-style bubble tea shop has become a beloved favorite among customers.
Founded in 2004 by Xu Wei-Xiang, Ding Tea has now become a successful international franchise.
They offer popular drinks such as bubble tea, smoothies, and coffee while also offering various snacks, including french fries and other traditional Taiwanese dishes. It is one of the 10 best bubble tea franchises that you must own.
If you’re someone who is passionate about tea, coffee, and food, then Ding Tea could be the perfect franchise for you.
As a Ding Tea franchisee, you’ll receive comprehensive training to ensure that your store runs smoothly and efficiently.
In this article, we’ll walk you through the process of buying a Ding Tea franchise, from initial requirements to ongoing support.
We’ll also discuss what it takes to be a successful Ding Tea franchisee.
About Ding Tea Franchise
Ding Tea is a Taiwanese-style bubble tea shop that offers an array of drinks, sandwiches, and other snacks.
Founded in 2004 by Xu Wei-Xiang, Ding Tea has now become a successful international franchise with over 1,000 stores worldwide.
At each location, customers can enjoy popular drinks like bubble tea, smoothies, and hot coffee, as well as various snacks such as french fries and other traditional Taiwanese dishes.
In addition to these items, the chain also sells frozen yogurt and cakes for those looking for something sweet.
Ding Tea has become increasingly popular over the years due to its low-cost products and great taste.
In fact, many customers have praised the chain’s signature drinks as some of the best in Taiwan.
Ding Tea has established itself as one of the most popular bubble tea chains worldwide due to its low-cost options and various products available at every store location.
The brand’s large and well-prepared selection of tea and snacks, coupled with its unique Taiwanese atmosphere, make it a great franchise opportunity.
Ding Tea Franchise History
Ding Tea was founded in Taichung Feng Chia in 2004 by entrepreneur Xu Wei-Xiang with the vision of promoting Taiwanese tea culture.
He believed in the infinite possibilities of tea and wanted to bring the traditional Taiwanese flavor to a global audience.
In 2004, Ding Tea pioneered its first franchising location with great success.
This model allowed Ding Tea to rapidly expand its business operations and reach more customers around the world.
Over time, Ding Tea has become an international sensation that is now available in over 1,000 stores worldwide.
The brand has become increasingly popular due to its low-cost products and great taste — many people have praised Ding Tea’s signature drinks as some of the best bubble teas available worldwide.
Today, Ding Tea has established itself as one of the premier bubble tea chains worldwide due to its low-cost options, a wide variety of products available at each store location, and commitment to providing high-quality customer service at all times.
Franchise Model Table
Ding Tea Master Franchise Business:
| Investment Component | Amount Range |
|---|---|
| Franchise Fee | $700,000 per store |
| Initial Investment to Franchisor | $800,000 to $820,000 |
| Total Investment Range | $833,000 to $895,000 |
| Ongoing Service Fee | 2.5% of gross revenues |
| Payments to Franchisor, Vendors, and Suppliers | 20% to 25% of monthly expenditure |
Ding Tea Subfranchise Business:
| Investment Component | Amount Range |
|---|---|
| Franchise Fee | $30,000 per store |
| Initial Investment to Franchisor | $58,500 |
| Total Investment Range | $195,240 to $324,170 |
| Ongoing Service Fee | $500 per month |
| Marketing Fee | 3% of gross monthly sales |
How Much Does It Cost to Open a Ding Tea Franchise?
The cost to open a Ding Tea franchise ranges from $833,000 to $895,000 for a master franchise business, including a franchise fee of $700,000 per store, while a subfranchise business requires an investment of $195,240 to $324,170, with a franchise fee of $30,000 per store.
Additional ongoing expenses include service fees based on gross revenues for master franchisees and a fixed monthly service fee plus a marketing fee based on gross monthly sales for subfranchisees.
Ding Tea Franchise Revenue & Profit
Ding Tea has not made any representations about the financial performance of its franchises; as such, the revenue and profit of the Ding Tea franchise are not known.
However, if you decide to purchase an existing Ding franchise, then the company might offer you its Franchise disclosure document using which you might be able to find out the revenue and profit.
Revenue & Profit Based On Similar Brands in the Industry
Master Ding Tea Franchise:
| Average Annual Sales | $370,000 |
|---|---|
| Profit Margin | 18% |
| Potential Annual Profit | $66,600 |
| Midpoint Initial Investment | $864,000 |
| Time to Recoup Investment | Approximately 13 years |
Subfranchisee (Ding Tea Store):
| Average Annual Sales | $370,000 |
|---|---|
| Profit Margin | 18% |
| Potential Annual Profit | $66,600 |
| Midpoint Initial Investment | $259,705 |
| Time to Recoup Investment | Approximately 4 years |
For a master Ding Tea franchise with an average sales figure of $370,000 and an 18% profit margin, the potential annual profit would be $66,600 ($370,000 * 0.18). Assuming a midpoint initial investment of $864,000, it would take approximately 13 years to recoup the initial investment.
For a subfranchisee with an average sales figure of $370,000 and the same 18% profit margin, the potential annual profit would be $66,600 as well. With a midpoint initial investment of $259,705, it would take approximately 4 years to recoup the initial investment.
However, it’s important to note that these estimates are based on the average sales figure for a similar milk tea franchise and may vary depending on the location, market conditions, and individual performance of each franchisee.
How Much Do Ding Tea Franchise Owners Make?
Ding Tea does not tell us how much money the main company makes or how much they charge the store owners. So, we can’t say for sure how much money each Ding Tea store makes.
But, we can look at other stores like Gong Cha that sell milk tea to get an idea. Gong Cha makes around $370,000 each year.
If a person spends $864,000 to start a Ding Tea store, it might take them 13 years to make all of their money back. If a person spends $259,705 to start a smaller Ding Tea store, it might take them about 4 years to make all of their money back.
Ding Tea Failure Rate
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2019 | 39 | 71 | +32 |
| 2020 | 71 | 95 | +24 |
| 2021 | 95 | 112 | +17 |
For the Franchised outlets:
- In 2019, the growth rate was (32)/39×100≈82.05%
- In 2020, the growth rate was (24)/71×100≈33.8%
- In 2021, the growth rate was (17)/95×100≈17.89%
According to the above-mentioned data, there is no failure rate for franchised outlets as the outlets at the end of the year increased during the span of 3 years.
We can see that the franchised outlets for Ding Tea grew from 2019 to 2021, showing a growth rate between 82.05% and 17.89%.
Overall, the Ding Tea franchise has expanded in the years 2019-2021.
Payback Period Of Ding Tea
| Average Annual Sales | $370,000 |
| Profit Margin | 18% |
| Potential Annual Profit | $66,600 |
| Midpoint Initial Investment | $864,000 |
Based on the average annual sales of Ding Tea which is $370,000, and the profit margin of 18%, the estimated annual profit will be $66,600.
So, to find out how long it will take to earn back the initial investment:
Payback Period = Midpoint Investment / Yearly Profit = $864,000 / $66,600 = 12.97 years
Based on these figures, it will take approximately 13 years to recoup the initial investment for Ding Tea. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
Ding Tea Franchise Requirements
In order to open a Ding Tea franchise, franchisees must meet several requirements. The first and foremost is the $20,000 franchise fee.
This fee covers the cost of training, store setup, and other associated costs with opening the franchise.
The next requirement is age; potential owners must be at least 20 years old in order to purchase a franchise.
This ensures that the owner has enough experience to manage their own business and is able to make informed decisions about their store’s operations.
It is also important for potential franchisees to have a good credit score.
This helps ensure that the franchisor will receive timely payments from its franchisees. A good credit score ranges from 650 and up.
In addition, franchisees should have an enthusiasm for tea and its culture in order to provide customers with the best experience possible when they visit your store.
They should also be willing to participate in training courses provided by Ding Tea to learn more about operating a successful business.
Ding Tea Franchise Training and Support
When it comes to training and support, Ding Tea provides comprehensive resources and guidance to help its franchisees succeed.
All franchisees receive extensive training to become familiar with the various aspects of running a successful bubble tea store.
This includes learning about customer service techniques, operational processes, food safety standards, and more.
In addition, each franchisee is provided with basic operational support, such as assistance with equipment maintenance and store marketing management.
Ding Tea also offers a newsletter for its franchisees that covers new product launches, helpful tips for increasing sales, and promotional campaigns.
The newsletter also provides updates on current industry trends so franchisees can stay up-to-date on the latest developments in the bubble tea industry.
Ding Tea Franchise Terms Of Agreement & Renewal
When signing up for a Ding Tea franchise, the initial agreement term is three years.
During this time, the franchisee is responsible for meeting all their obligations as outlined in the contract.
This includes paying any rental and other associated costs, as well as abiding by Ding Tea’s standards and guidelines.
At the end of the initial three-year period, the franchisee may choose to renew their contract if they wish.
In order to do so, they must pay a renewal fee which is 50% of the original franchise fee.
This fee covers additional training and support resources that are provided to help existing franchisees maintain success with their business.
Ding Tea Franchise Obligations and Restrictions
In addition to the above requirements, there are also several obligations and restrictions that must be adhered to by all Ding Tea franchisees.
These include abiding by all local, state, and federal laws, as well as taking necessary steps to maintain customer satisfaction.
Ding Tea also has a strict policy against the unauthorized reproduction or distribution of any proprietary materials related to the business.
Franchisees must purchase all operational materials directly from Ding Tea’s headquarters to maintain consistency across the brand.
Any changes to operational procedures must also be approved by Ding Tea in order to ensure that the standards of the brand remain consistent.
Ding Tea Franchise Financial Assistance
Ding Tea does not offer any financial assistance to its franchisees.
However, there are numerous third-party lenders who specialize in providing financing to small businesses such as Ding Tea franchises.
These lenders can provide financial assistance for everything from business start-up costs and equipment purchases to ongoing operating expenses.
For those looking for financial assistance to take their dream of owning a bubble tea store and make it a reality, these third-party lenders can be invaluable resources.
They can provide the necessary capital to get started without needing to issue a large amount of personal debt.
Ding Tea Comparison
| Company | Ding Tea | Gong Cha |
|---|---|---|
| Year Founded | 2004 | 2006 |
| Franchise Fee | $20,000 | $41,500 |
| Initial Investment | $123,000-$422,000 | $177,430–$335,400 |
| Number of Outlets | 1000+ | 1500+ |
Conclusion
Investing in a Ding Tea franchise can be a great opportunity to launch a successful business in the growing bubble tea industry.
With comprehensive training and support from Ding Tea, franchisees are well-prepared to operate their own stores successfully.
Now that you have a better understanding of the Ding Tea franchise, you can make an informed decision about whether or not this business model is right for you.
With the right preparation and dedication, you can take your business to new heights with Ding Tea!
Ding Tea Franchise FAQ
Who is the Owner Of Ding Tea?
Ding Tea is owned by Xu Wei-Xiang, a Taiwanese business mogul and entrepreneur.
He first opened a Ding Tea store in Taiwan before expanding the chain to locations throughout Asia and eventually into the United States.
How Many Ding Tea Franchises Are Currently There?
As of 2023, there are over 1000 Ding Tea franchises across the world.
Is Ding Tea A Good Investment?
Yes, Ding Tea can be a great investment. Given the current trend in bubble tea consumption and the growing demand for quality specialty drinks, investing in a Ding Tea franchise can be an excellent business decision.
Is Ding Tea Worth It?
Yes, Ding Tea is definitely worth it. With comprehensive training and support from Ding Tea’s headquarters, franchisees are well-prepared to operate their own store successfully.
Where Is Ding Tea Headquartered?
The headquarters of Ding Tea is in Taichung city in Taiwan.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.