How to Finance a Chatime Franchise: Bubble Tea Costs and SBA
By Marc Cornella
A Chatime franchise loan usually pays for a small, equipment-heavy bubble tea shop: a leased storefront or mall space, a bar of tea brewers, sealers and refrigeration, a menu board and enough cash to carry the store until it finds its rhythm. Because most Chatime shops are compact and leased, the money goes mainly into leasehold improvements, equipment, technology and opening inventory rather than land and buildings.
This article explains what the franchisor’s disclosure document says a Chatime shop costs, which fees continue after opening, how the brand’s SBA Franchise Directory listing works and what lenders look for before approving a deal. US Professional Funding is not affiliated with, sponsored by or endorsed by Chatime; the name is used only to describe the business. Figures come from the franchisor’s disclosure document and can change with each new edition, loan programs and terms vary by lender and borrower, and every loan is subject to approval. Nothing here is legal, tax or investment advice.
Chatime Franchise Loan at a Glance
The figures below come from the Franchise Disclosure Document issued by Chatime Franchise, LLC on April 18, 2023.
- Initial franchise fee: $49,900 per shop
- Initial training fee: $10,000 per franchise agreement
- Multi-unit development fee: $98,900 for two locations, $134,900 for three, plus $20,000 for each location beyond three
- Royalty: 5.0% of gross sales, paid monthly
- Brand marketing fee: 2.0% of gross sales, plus local marketing of at least 2.0% of gross sales
- Estimated initial investment: $208,600 to $475,400 for one shop, including three months of additional funds
- Franchisor financing: none offered, according to Item 10
- Franchise term: 10 years, with a possible 10-year renewal
- System size: the company reported more than 1,400 locations worldwide in 2026
- SBA Franchise Directory: listed under code S3639, with a note that only the negotiated addendum may be used
What Is Chatime?
Chatime is a bubble tea brand that began in Taiwan and grew into a large international franchise system with shops across Asia, Australia, Canada and the United States. The menu centers on brewed milk teas, fruit teas and specialty drinks, customized with toppings such as tapioca pearls and adjustable sweetness and ice levels.
Who sells U.S. franchises. According to the 2023 disclosure document, the current U.S. franchisor is Chatime Franchise, LLC, a Delaware company organized in 2022 with headquarters in Culver City, California. It has offered franchises since April 2023. An affiliate offered U.S. franchises from 2014 to 2022, which matters if you are buying an older shop.
The store format. Chatime shops are small. The disclosure document recommends commercial space of at least 300 square feet, a size that suits small inline storefronts and mall spaces. The franchisor also reserves non-traditional venues such as airports, hospitals and universities.
How lenders view the brand. Lenders tend to see bubble tea as a high-frequency, low-ticket business that depends on foot traffic, a young customer base and fast service. Because the U.S. franchisor entity is relatively new, lenders often focus on the site, the operating plan and the current disclosure document more than on brand reputation.
Chatime Franchise Costs
Item 7 of the 2023 disclosure document estimates a total initial investment of $208,600 to $475,400 for a single shop. The spread comes mostly from rent, deposits, build-out, equipment and working capital.
Initial franchise and training fees
The initial franchise fee is $49,900 and is nonrefundable. The franchisor also charges an initial training fee of $10,000 per franchise agreement for its pre-opening program, which the managing owner and the operating manager must complete before the shop opens.
Leasehold improvements and signage
Leasehold improvements are the largest variable at $50,000 to $145,000. A former cafe with existing plumbing, drains and electrical capacity sits at the lower end, while a raw shell that needs sinks, water filtration, counters and finishes moves toward the top. External signage adds $4,200 to $6,500.
Equipment and technology
Equipment is estimated at $25,000 to $75,000 and technology systems at $11,500 to $18,000. That covers items such as tea brewers, cup sealers, shakers, ice machines, refrigeration, blenders and the point-of-sale and ordering systems that keep a busy counter moving.
Opening costs and working capital
Opening inventory runs $15,000 to $20,000 and initial local marketing $5,000 to $15,000. The table also includes rent of $6,000 to $33,000, a lease security deposit of $4,000 to $22,000 and additional funds of $20,000 to $60,000 for the first three months.
Item 7 line items
According to the 2023 Chatime Franchise Disclosure Document, the estimated initial investment for one shop includes:
- Initial franchise fee: $49,900
- Initial training and related personnel: $10,000
- Rent: $6,000 to $33,000
- Lease security deposit: $4,000 to $22,000
- Storage room rent: $0 to $3,000
- Leasehold improvements: $50,000 to $145,000
- Equipment: $25,000 to $75,000
- External signage: $4,200 to $6,500
- Opening inventory: $15,000 to $20,000
- Initial local marketing: $5,000 to $15,000
- Licenses, permits and utility deposits: $3,500 to $5,500
- Technology systems: $11,500 to $18,000
- Uniforms: $500 to $1,500
- Insurance: $3,000 to $6,000
- Professional fees: $1,000 to $5,000
- Additional funds for three months: $20,000 to $60,000
- Total: $208,600 to $475,400
Ongoing Fees and How They Affect Your Loan
The 2023 disclosure document lists a royalty of 5.0% of gross sales and a brand marketing fee of 2.0% of gross sales, both due monthly. Owners must also spend at least 2.0% of gross sales on local marketing with outside vendors. Item 11 estimates technology license fees of $499 to $1,150 per month.
Other fees include a $10,000 transfer fee and a renewal fee of no more than 25% of the then-current new outlet fee. Renewal also requires renovating the shop to current standards, so a refresh should be on the long-range budget.
How lenders factor them in. Sales-based charges come off the top before tea, dairy, cups, labor and rent. When a lender projects debt service coverage, it subtracts the royalty, brand marketing fee, local marketing spend and technology fees from expected sales. A projection that leaves any of them out overstates what the shop can borrow.
Franchisor Requirements for New Owners
The disclosure document requires a managing owner and an operating manager to complete initial training before opening and to follow the franchisor’s menu, approved products and operating standards. The franchisor must approve the location and the lease, and relocation also needs its approval.
The pages reviewed for this article did not publish a minimum net worth or liquid capital requirement, so ask the franchisor for its current financial qualifications early.
Ways to Own a Chatime
Opening a new shop. A new Chatime means signing a franchise agreement, securing a site and building it out. Financing usually covers leasehold improvements, equipment, technology, the franchise and training fees, opening inventory and working capital. With no sales history, lenders rely on your projections and experience. Our page on financing a franchise start-up explains how new units are typically funded.
Buying an existing shop. An operating Chatime gives a lender real sales, cost and tax return data. The franchisor must approve the buyer and the transfer, the $10,000 transfer fee applies, and the landlord usually must consent to the lease assignment. Confirm whether the seller signed with the earlier U.S. affiliate and what the transfer will require. Our franchise restaurant acquisition financing page covers how resales are underwritten.
Multi-unit development. Owners can commit to two or more shops under a development agreement, covered in more detail below.
Financing Options for a Chatime Franchise
SBA 7(a) loans. The SBA 7(a) loan program often fits a leased bubble tea shop because one loan can combine leasehold improvements, equipment, technology, the franchise fee and working capital, and it can also fund the purchase of an existing shop. The 7(a) program maximum is currently $5 million, and program rules can change; a single Chatime project sits well below that.
SBA 504 loans. The SBA 504 program is designed for owner-occupied real estate and long-lived fixed assets. Most Chatime shops lease space, so a 504 loan usually fits only when an owner buys a small commercial building or condo unit and occupies it.
Conventional term loans. Experienced operators with strong credit, existing cash flow and liquidity may qualify for conventional business loans to open a second shop, buy an existing location or refinance. Terms vary widely.
Equipment financing. Tea brewers, cup sealers, ice machines, refrigeration, blenders and POS hardware can be financed separately through restaurant equipment financing and leasing. That preserves cash for the build-out, though the primary lender will count the payments.
Working capital and lines of credit. Cold drinks sell best in warm months and around school calendars, while winter and school breaks can slow some shops. Restaurant working capital and credit lines can cover pre-opening payroll, ingredient and cup inventory and the slower stretches of the year.
Seller financing on resales. When buying an existing Chatime, a seller may agree to carry part of the price. Seller notes are typically subordinate to the primary loan, and SBA rules and lender policies may limit how they are structured.
SBA Loans for Chatime Franchisees
SBA-backed loans are made by participating lenders, with the SBA guaranteeing a portion of each loan. For a franchise, the lender must confirm that the franchise relationship leaves the owner in control of the business, and the SBA Franchise Directory is how it does that.
The directory listing. Chatime appears on the SBA Franchise Directory under code S3639, with the note “Only the Negotiated Addendum may be used.” In plain English, the franchisor and the SBA have agreed on a specific addendum to the Chatime franchise documents that resolves eligibility concerns. When an SBA loan is involved, the lender must use that negotiated addendum rather than the standard addendum form. Ask the franchisor for it early.
A listing does not approve any borrower or guarantee a loan. The borrower, the shop and the project must still meet every program requirement.
Application tips. Gather the franchise agreement and negotiated addendum, the disclosure document, the lease or letter of intent, contractor bids, equipment and technology quotes, a sources and uses statement and projections. Our article on SBA loans for restaurants explains how lenders approach food and beverage deals.
How Lenders Evaluate a Chatime Deal
Personal credit and financial history. Lenders review each owner’s credit history, tax returns and existing debts. Owners with a significant stake typically sign personal guarantees.
Net worth and liquidity. Lenders look at your cash injection and the reserves you keep after opening. Item 7 already includes three months of additional funds, but lenders often want to see cushion beyond that.
Industry and management experience. Food service, cafe or retail management experience strengthens an application. A first-time owner can offset limited experience by hiring a capable manager and completing the franchisor’s training.
Business plan and projections. Projections should reflect the actual site, nearby schools and offices, delivery orders, the seasonal pattern of cold drinks, rent, every Item 6 fee, cup and ingredient costs and staffing.
The disclosure document and franchise agreement. Lenders review the term, renewal and transfer provisions, territory rights and any franchisor rights that could affect collateral. The 2023 document grants no exclusive territory, though a protected area of up to a two-mile radius may apply, and the franchisor can sell through other channels such as grocery stores and online.
Lease and site. The lease term plus renewal options should cover the loan term. Lenders may ask for landlord consent, a collateral assignment of the lease and confirmation that the space can support the plumbing and electrical loads a tea bar needs.
Historical financials on resales. For an existing shop, lenders study several years of tax returns, profit and loss statements and sales reports, and they ask why the seller is leaving.
Inside the Tea Bar: Equipment and Build-Out
A Chatime shop runs on a compact production line. Tea is brewed in batches, pearls are cooked through the day, drinks are measured, shaken and sealed, and orders move from counter, kiosk and delivery apps at once. Ice machines, under-counter refrigeration, sealers and water filtration all work hard.
That makes the build-out behind a Chatime franchise loan more technical than the footprint suggests. Plan for floor drains, hand and prep sinks, filtered water lines and dedicated electrical circuits, and check whether the landlord or local code requires grease or waste handling. Our article on first- versus second-generation restaurant build-outs explains why a former cafe space can save time and money.
Multi-Unit Growth and Development Agreements
The multi-unit development agreement lets an owner commit to several shops at a set development fee, credited against each location’s franchise fee. Development agreements carry opening schedules, and missing them can put remaining rights at risk, so the financing plan needs to match the timeline.
Lenders typically finance each shop one at a time, using the results of the first to support the second. They review global cash flow across all shops, remaining liquidity and management depth. Our article on financing multiple franchise units covers how owners grow without stretching too thin.
Real-World Scenarios
A first-time owner near a university. A former retail manager signs a single franchise agreement for a small storefront near a campus. An SBA 7(a) loan covers the build-out, equipment, fees and three months of operating cash, and the owner keeps extra reserves for summer and winter breaks.
A buyer acquiring an existing mall shop. A buyer purchases an operating Chatime that opened under the earlier U.S. franchisor. The lender reviews the shop’s sales history, the transfer terms and the remaining lease term, and the seller carries a small subordinate note.
An experienced operator signing for three shops. A food service operator signs a development agreement for three shops. The first opens with SBA financing, and later shops use conventional loans once the first has a track record.
Common Mistakes to Avoid
- Budgeting from an older Item 7 table instead of the current disclosure document
- Forgetting the separate $10,000 training fee when sizing the loan
- Underestimating plumbing, drains and electrical work in a raw shell space
- Leaving local marketing and technology fees out of projections
- Signing a lease shorter than the loan term
- Missing the negotiated addendum requirement on an SBA loan, which can delay closing
For a broader look, read about the restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your Chatime Franchise
Step 1: Request the current disclosure document. Review it with a franchise attorney, focusing on Items 5, 6, 7, 10, 12, 17 and 19.
Step 2: Confirm your qualifications. Ask the franchisor for its current net worth and liquidity guidelines and compare them with your cash and assets.
Step 3: Pick a site type. A mall unit, an urban storefront and a campus location each change rent, build-out and sales assumptions.
Step 4: Build your budget. Combine contractor bids, equipment and technology quotes and the Item 7 categories. Our SBA loan payment calculator can give rough planning estimates, which are not an offer.
Step 5: Assemble your documents. Gather personal financial statements, tax returns, a resume, the franchise agreement and negotiated addendum, the lease or letter of intent and projections.
Step 6: Coordinate approvals. Keep franchisor approval, the lease and the loan moving on compatible timelines.
Step 7: Plan the opening. Schedule training, hiring, inventory and launch marketing so working capital lasts through the ramp-up.
Chatime Franchise Loan FAQs
How much does a Chatime franchise cost?
The 2023 disclosure document estimates $208,600 to $475,400 for one shop, including the franchise fee, training fee, build-out, equipment and three months of additional funds. Confirm the range in the current edition.
What is the Chatime franchise fee?
The initial franchise fee is $49,900, plus a $10,000 initial training fee per franchise agreement.
What royalty does Chatime charge?
The royalty is 5.0% of gross sales, with a 2.0% brand marketing fee and local marketing spending of at least 2.0% of gross sales.
How much liquid capital and net worth do I need?
The franchisor materials reviewed for this article did not state a minimum. Ask the franchisor directly, and expect lenders to look for a meaningful cash injection plus reserves.
Can I get an SBA loan for a Chatime franchise?
Possibly. Chatime is listed on the SBA Franchise Directory under code S3639, and only the negotiated addendum may be used. Approval still depends on the borrower, the project, program rules and the lender.
Can I buy an existing Chatime shop?
Yes, with franchisor approval, payment of the transfer fee and usually landlord consent.
Does Chatime offer financing?
No. Item 10 of the 2023 disclosure document says the franchisor does not offer direct or indirect financing or guarantee franchisee obligations.
How long is the Chatime franchise agreement?
The initial term is 10 years, and the franchisor may grant a 10-year renewal if conditions such as renovation and a renewal fee are met.
Can I open multiple Chatime shops?
Yes. The multi-unit development fee covers two or three locations, with $20,000 for each location beyond three, credited against each franchise fee.
Does a Chatime shop get an exclusive territory?
The 2023 disclosure document grants no exclusive territory, though a protected area of up to a two-mile radius may apply. Review Item 12 of the current document.
What documents do I need for a Chatime franchise loan?
Expect to provide personal financial statements, tax returns, a resume, the franchise agreement and negotiated addendum, the lease or letter of intent, bids and quotes, projections and, for resales, the shop’s financial history.
Final Thoughts
A Chatime franchise loan is a small-footprint project with big details: plumbing and power for the tea bar, rent that fits realistic sales, sales-based fees, seasonal swings and the negotiated addendum an SBA loan requires. Start from the current disclosure document, choose the site carefully and keep extra reserves.
US Professional Funding helps franchise owners finance new shops, acquisitions, equipment and working capital. Learn more about our franchise financing solutions and our restaurant financing programs.
