If you might be a fan of bubble tea or boba tea, you could have heard of Happy Lemon. Happy Lemon is a beverage chain that has only recently come to America. The chain is not any peculiar boba tea store. This bubble tea franchise was began by the Yummy-Town Group, which was the unique group to deliver Taiwanese bubble tea tradition to Hong Kong and Mainland China.
Since its founding in 2006, the franchise enterprise has expanded to over 2,000 areas in 21 nations. The sheer measurement of its fast growth is enticing to many, particularly as milk tea turns into extra in style within the United States. If you have an interest in franchising Happy Lemon or are merely within the model, you might have come to the correct place. From this text, you’ll be taught the background of the Happy Lemon model, the benefits and downsides of proudly owning a Happy Lemon franchise, the necessities and price of a franchise, how to finance a location, and the profitability of present Happy Lemon franchises. We’ll cowl the next subjects in depth on this article:
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Happy Lemon
Happy Lemon was based by the Yummy-Town Group, a firm based mostly in Taiwan. The Yummy-Town Group has a history of being in the know about consumer trends. They have been the primary to deliver bubble tea tradition from Taiwan to Mainland China and Hong Kong. Since 2006, they’ve supplied salted cheese tea as a part of their choices within the Happy Lemon chain. The providing took off and has supplied them with a giant buyer base who’re followers of the product.
Undoubtedly, Happy Lemon has had nice success within the beverage trade. They have managed to construct out a formidable variety of franchises by way of their enterprise mannequin. They have been in tune with their market and have allowed the model to develop quickly.
In phrases of being a participant within the beverage trade, Happy Lemon is now one of many largest gamers within the worldwide beverage trade. They have a technique to continually spend money on analysis and improvement in order that their merchandise stay new, revolutionary, and enticing to their clients. They present particular care to their franchises and assist them in a number of methods.
They additionally concentrate to high quality when it comes to their substances and provide chains, so you’ll be able to make certain that the Happy Lemon model is one to be assured in. This is true each from the attitude of the shopper and the possible franchisee.
Advantages of Owning a Happy Lemon
Getting into the beverage market with Happy Lemon could also be a nice concept. They are actually a giant participant within the high-quality beverage market. As a franchisor, Happy Lemon pays a lot of consideration to its franchisees, high quality, and choices. Together, Happy Lemon does its greatest to present entrepreneurs with a gorgeous franchise alternative within the beverage franchise house.
One of the primary benefits of proudly owning a Happy Lemon franchise is their funding in being an innovator. Rather than being a passive actor within the beverage trade, Happy Lemon continually invests in its merchandise and analysis and improvement. Doing so helps them keep on prime of the trade by offering their clients with the most recent and greatest merchandise. Such examples as their salted cheese tea are consultant of the efficient outcomes this technique can generate.
Another benefit of proudly owning a Happy Lemon franchise is the low total preliminary funding. Since there’s not a lot of refined tools required to run a beverage store, the general franchise price is lowered for potential franchisees.
An extra benefit of Happy Lemon is that their franchising mannequin permits you to select from completely different measurement shops to match the situation you are attempting to construct. For instance, in case you are extra restricted on price range, a smaller measurement location is likely to be ultimate for you. Likewise, in case you are attempting to construct a bigger location and have your beverage retailer be a hub for the neighborhood, they provide particular plans for this mannequin as nicely. This flexibility is actually a bonus when contemplating the dimensions of your funding.
Disadvantages of Owning a Happy Lemon
While there are actually many enticing benefits to proudly owning a Happy Lemon franchise, there are additionally some downsides to take into account as you progress ahead within the decision-making course of.
First, the charges paid to company may be considerably excessive. The franchise price is greater than some restaurant franchises, and the product choices of Happy Lemon are centered round drinks. The franchise price additionally differs by location, which might make preliminary price projection troublesome. Moreover, a few of the ongoing prices stay costly. These may be greater than trade requirements, making Happy Lemon a premium model to function for potential franchisees.
Another downside with being a franchise proprietor of a Happy Lemon franchise is the necessity to cater to a giant menu. This can lead to operational and price inefficiencies, basically required by company, which find yourself making coaching way more troublesome.
One of the successes of Happy Lemon has been driving the wave of boba recognition within the United States and internationally. However, many different manufacturers and shops have risen to compete within the boba house. It will not be instantly clear whether or not the success of Happy Lemon has up to now been being in the correct place on the proper time or whether or not it’s attributable to the individuality of their product. In both case, it’s nonetheless a optimistic signal to see that they spend money on the analysis and improvement of their product to proceed to keep forward of the competitors.
It is vital to weigh the disadvantages and benefits of a Happy Lemon franchise. Costs paid to company, having a giant menu, and competing with different beverage companies are substantial disadvantages which you must weigh when choosing out a beverage franchise or franchise normally.
Requirements for Opening a Happy Lemon
Now that you’ve got thought of the benefits and downsides of a Happy Lemon franchise, you is likely to be questioning what the requirements are for a franchise utility for a Happy Lemon location.
Starting with the monetary necessities, you have to to have a minimal internet value within the vary of $40,000 to $80,000 so as to open up a Happy Lemon location. This is a fairly accessible internet value vary for most individuals. In order to calculate your internet value, you must begin by calculating the worth of your entire belongings. This means issues like homes, vehicles, or financial savings. Once you add the worth of those belongings, subtract your debt. This will equal your internet value. If your internet value is within the minimal vary, you might be in a great spot to qualify financially for a Happy Lemon franchise location.
There are additionally non-financial facets of a super candidate that Happy Lemon appears to be like for of their franchisees. You will want to meet these as nicely so as to have a aggressive utility.
Some of the facets could also be simple to display. These embody being assured in your online business enterprise and enterprise actions, willingness to make good relationships together with your area people by way of your online business, being passionate concerning the model, and being prepared to make your self a chief of your franchise.
While these necessities may usually be simple to meet, the following two is likely to be considerably more difficult. First, you want to be ready to present dedication to your franchise location. Of course, making the funding and taking over the danger of opening a Happy Lemon franchise demonstrates a substantial degree of dedication, however it doesn’t essentially entail what Happy Lemon means by dedication. They need franchisors who’re actively concerned within the operations of a Happy Lemon location. In different phrases, they aren’t in search of passive franchisees.
You may replicate on this requirement positively, because it implies that Happy Lemon cares deeply concerning the picture that they’re placing out to the general public. They care a lot concerning the functioning of franchises and the picture that they painting to the general public. In doing so, and by protecting this constant throughout franchises, it improves the look of the model to the broader public.
The last requirement is you could financially assist the funding you’d undertake in establishing a Happy Lemon franchise. The Happy Lemon franchise price will not be essentially small, so it is necessary that you recognize you might be outfitted to fund the funding. Financing choices might also be accessible to assist, however it is likely to be a good concept for you to get an concept about the price of beginning a Happy Lemon.
Cost of Starting a Happy Lemon
Once you might have weighed the benefits and downsides of beginning a Happy Lemon franchise and see that you just meet the necessities for making use of, you is likely to be curious about the price of a Happy Lemon. Not the least of which motive is that Happy Lemon needs you to have the opportunity to cowl the price of the funding.
Starting with the primary main price of beginning a Happy Lemon, you have to to assessment the preliminary franchise price. The preliminary franchise price is a lump sum price that’s paid upfront to a franchisor when a franchising settlement is signed between the franchisor and the franchisee. The new franchisee pays this price to the franchisor instantly. Corporations use this as a mechanism for income, however this price additionally helps some preliminary coaching and advertising.
The preliminary franchise price for Happy Lemon will depend on the dimensions of the situation you go along with, ranging up to $40,000. In the franchise meals of meals and beverage areas, $40,000 may be considerably excessive for a franchise price. Although it will in the end rely on the dimensions of the situation, this price is actually not ignorable.
While there are some prices not paid to company on the instant starting of the franchise, there are nonetheless charges a typical franchise has to pay to company quickly after a grand opening. Usually, this occurs month-to-month. These ongoing charges are often known as royalty charges and promoting charges. A royalty price is a price paid month-to-month to company, often as a proportion of product sales. This price is utilized by company as income to assist them perform their capabilities. An promoting price is one other price paid month-to-month to company, additionally often as a proportion of product sales. However, the promoting price is used extra explicitly to assist promote for company and your franchise. So, there are some returns on the promoting price you’d pay.
For Happy Lemon, there’s a royalty price of seven%. For trade requirements, that is fairly excessive. Before you get sticker shock, nonetheless, it is necessary to be aware that Happy Lemon invests a lot again into R&D and its personal provide chain high quality management. Part of what retains Happy Lemon forward of the competitors and such a quickly rising enterprise is its technique to be revolutionary and high-quality. Your royalty price is likely to be greater to assist company compensate for that.
Less is thought concerning the promoting price, however it’s anticipated to be roughly 2-3%, which is low by trade requirements. This would make the franchise very aggressive in regard to this price.
Yet, you is likely to be rightly involved concerning the complete funding you may be making into beginning your individual Happy Lemon franchise. While it will rely on the dimensions, Happy Lemon estimates that individuals spend between $250,000 to $500,000 in prices to open a location. The start-up prices of a Happy Lemon are fairly small relative to different restaurant and beverage franchise choices. This is likely to be a franchise to take into account in case you are in search of an reasonably priced start-up franchise choice.
Financing Your Happy Lemon Franchise
If you might have learn by way of the prices of opening up a Happy Lemon franchise and are fearful about your capacity to afford all the funding prices upfront, you aren’t out of choices. Financing has made it a lot simpler for entrepreneurs to entry funding to assist begin and proceed their franchises, increasing their funding vary alternative and potential revenue.
In sure circumstances, it is sensible to use financing somewhat than money, as money can be utilized extra effectively in a enterprise or be used to pay you again. If you might be in search of choices for financing your franchise, there are numerous choices, together with SBA loans, time period loans, strains of credit score, and tools financing.
SBA Loan
The United States Small Business Administration (SBA) is a authorities company tasked with serving to entrepreneurs and small companies survive and thrive in modern financial circumstances. Part of their tasks contains overseeing a number of mortgage and financing packages for small companies. These packages are designed to present low-cost borrowing to companies in want. That implies that for a lot of small companies, turning to an SBA mortgage is one thing that they are going to do after being denied a financial institution mortgage.
SBA loans usually have low-interest charges for enterprise borrowing and nice phrases. One of the commonest SBA mortgage packages is an SBA 7(a) loan, which can be utilized for a number of enterprise functions. If your small enterprise wants to purchase actual property, make a giant capital buy, purchase a lot of stock or tools, or assist stabilize working capital, an SBA 7(a) mortgage can assist. SBA 7(a) loans work by way of a lender and supply them with ensures on a portion of the loans.
As a end result, lenders may be extra assured that they are going to be lined from potential losses. Therefore, they’ll provide decrease rates of interest, that are extra enticing to small companies. The SBA additionally prohibits these lenders from penalizing small companies for prepayment on loans. This makes the loans extra reasonably priced to companies and prevents them from getting trapped in debt.
The SBA 7(a) program will not be the one mortgage program designed to assist small companies. They even have a financing program that’s geared in direction of franchisees to assist them afford bills just like the preliminary franchise price and different franchising prices.
If you might be in search of extra info, the SBA offers a entire host of supplies and hyperlinks on its web site so as to assist small enterprise homeowners get the funding they want. This contains hyperlinks to mortgage functions and lender info.
You needs to be conscious that SBA loans, whereas they’ve favorable rates of interest and phrases, usually are not probably the most handy choice for small companies. They contain lengthy processing instances and a lot of paperwork so as to get one. Even then, you’ll have to get authorized on extra circumstances than simply a customary mortgage. Yet, if that is an choice your Happy Lemon franchise wants to take, there isn’t a want to fear. It can ultimately give you low-cost debt with a mortgage on favorable phrases. This may make your resolution to franchise and function a Happy Lemon franchise cheaper.
Term Loans
While an SBA mortgage will not be nice for each scenario, a time period mortgage may assist your Happy Lemon franchise as an alternative. A time period mortgage is an alternate financing choice on your Happy Lemon franchise. A time period mortgage is actually a mortgage that infuses cash into your online business for you to have the opportunity to use for a number of issues. A time period mortgage can enable your Happy Lemon franchise to repay a giant invoice or be used for a huge capital funding.
Term loans often have a fixed-rate rate of interest on the mortgage. A time period mortgage can both be acquired from a financial institution or an alternate lender. While a financial institution could have decrease rates of interest, the processing instances for a financial institution may be longer. In addition, the financial institution will doubtless do due diligence, requiring you to submit monetary statements, a marketing strategy, your online business credit score rating, and presumably extra.
If you might be in search of a mortgage to assist your Happy Lemon franchise earlier, you may take into account an alternate lender (like Biz2Credit!). Alternative lenders have a shorter course of for getting a mortgage and sometimes do much less due diligence. This permits your Happy Lemon franchise to begin utilizing that capital sooner. However, the rate of interest on these loans will doubtless be barely greater to compensate the choice lenders for the added threat and fewer due diligence.
Term loans are often used for short-term investments. This is as a result of the rates of interest on these loans can ultimately make debt costly. When used appropriately, time period loans may be a nice choice on your Happy Lemon franchise. Just make certain that the choice you make is the correct one for your online business.
Line of Credit
You is likely to be in search of a completely different type of financing completely different from an upfront, singular mortgage. Maybe the choice you might be in search of on your Happy Lemon location is a line of credit score. A line of credit score is a completely different sort of mortgage, the place after making use of, you might be given a most credit score restrict. This permits your Happy Lemon to borrow from this credit score restrict as wanted. This implies that you don’t want to draw down the total quantity of the road of credit score at one time.
As you’re taking cash out of the road of credit score to assist your online business, you’ll owe cash to a lender on that cash. You additionally pay curiosity on that cash as you pay it again over time. The rate of interest for such a mortgage is variable. This is sensible because the time that you just determine to draw down on the road of credit score will fluctuate.
Banks and different lenders provide strains of credit score. This can assist your online business get completely different rates of interest or quicker entry to loans. A line of credit score is likely to be proper on your Happy Lemon location to have available within the occasion you expertise issues together with your tea-making tools and want to change it on quick discover. Or, you may need a giant stock that you just want additional money to cowl. No want to fear, as having a line of credit score can assist you cowl these small, surprising bills and dealing capital challenges. At the identical time, this helps your Happy Lemon franchise handle its money stream extra effectively.
Equipment Financing
Equipment financing is without doubt one of the most related varieties of financing accessible to you and your Happy Lemon franchise location. When you consider the tools concerned in a Happy Lemon franchise, it’d quantity to fairly a lot. Having to make all these purchases directly may place you below monetary pressure. You shouldn’t let this restrict you, nonetheless, as tools financing is designed to give you an reasonably priced financing choice for tools.
As it implies in its title, tools financing is the place you’ll be able to take out a mortgage or lease particularly for tools. For your Happy Lemon franchise, you may want to buy machines so as to make tea or different drinks or money registers on the entrance of the shop. These prices is likely to be excessive, so that you is likely to be curious about financing choices.
The excellent news about tools financing is that it’s comparatively low-cost. This is as a result of the tools you buy with the financing choice is handled as collateral. Since the worth of the tools is probably going excessive, the lender can make certain that they’ll recuperate the cash they may lose on the mortgage if you happen to default.
There are additionally a number of other ways to use tools financing. One of them is known as lease financing. With lease financing, your Happy Lemon franchise would lease tools, like beverage-making machines, for a while and pay a lease on the tools every month. After the lease ends, you select between persevering with the lease, returning the piece of kit, or buying the tools from the corporate that’s leasing the tools. This reduces the upfront price of the tools and permits your Happy Lemon franchise to get new tools on the finish of the lease if you happen to choose.
There can also be a capital lease choice. Similar to a mortgage, you lease the tools, resembling a money register, for a whereas. However, on the finish of the capital lease, your Happy Lemon retailer will personal the tools.
Your Happy Lemon franchise can also get an working lease. An working lease is the place you strictly pay a lease to use a piece of kit, like a fridge, and provides the piece of kit again to the corporate that’s leasing it on the finish of the lease.
There are a number of financing choices accessible to your Happy Lemon franchise. Since Happy Lemon doesn’t provide financing by way of its company construction, you must take into account your third-party choices for funding in case you are curious about financing.
Profitable is a Happy Lemon Franchise?
As a basic query for evaluating the general prices of beginning and working a Happy Lemon franchise, you might be most likely curious about how worthwhile a Happy Lemon franchise is. Current estimates place the profitability of a Happy Lemon franchise at roughly $50,000 to $72,000. This could not seem to be a lot of cash, however it’s pretty first rate in contrast to the start-up price.
You must also remember that the precise profitability of your Happy Lemon franchise will rely on many elements, together with the market you might be working in, how successfully you use your location, and the way a lot demand you’re able to generate.
Key Takeaways
Opening a new franchise will not be simple work. It takes exhausting work, dedication, and dedication. However, with the correct method, franchises may be a good way to open your individual small enterprise. Because franchises include pre-defined operational directions, a well-developed model, and a collection of merchandise already confirmed to have some degree of shopper demand, franchises are way more approachable for inexperienced or first-time enterprise homeowners. They take away lots of the key challenges and complications that include beginning a enterprise from scratch. However, as famous, further charges and commitments to the nationwide franchise include these advantages.
As with any enterprise, the important thing to opening a profitable franchise is to do your analysis upfront. As you develop a marketing strategy, your objective needs to be to perceive the market during which you might be contemplating opening your retailer intimately. Is there curiosity within the franchise model available in the market? How many potential clients (i.e. how giant) is the market? What is the competitors like available in the market? Will you have the opportunity to stand out? All of those are vital questions. Doing the groundwork upfront to reply these questions can prevent a lot of complications down the highway and allow you to know if beginning your meant enterprise there shall be worthwhile.
All-in-all, with the correct method and the right quantity of analysis, you’ll be able to develop a marketing strategy you may be assured. With this in hand, you may be nicely in your method to beginning your individual profitable and worthwhile franchise. So, don’t cease right here with the knowledge we’ve supplied. Start researching!
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