How to Finance a Feng Cha Franchise: Boba Shop Startup Costs
By Marc Cornella
A Feng Cha franchise loan funds a boba tea shop from a brand that grew from a single Texas store in 2017 to more than 80 locations. Tea shops look simple from the counter, but the build-out, specialty equipment and working capital still add up, and lenders want to see a plan that reflects how a beverage-and-dessert business actually earns its revenue.
This article covers what the company publishes about Feng Cha, which disclosure items will set your numbers, how the brand’s SBA Franchise Directory listing works and how buyers can structure financing for a new or existing shop.
US Professional Funding is not affiliated with, sponsored by or endorsed by Feng Cha; the name is used only to describe the business. Figures in the franchisor’s disclosure document can change, loan programs and terms vary, and every loan is subject to review and approval. Nothing here is legal, tax or investment advice, and buyers should review the current Franchise Disclosure Document (FDD) and franchise agreement with a qualified franchise attorney and accountant.
Feng Cha Franchise Loan at a Glance
- Concept: handcrafted boba tea, milk tea, blended drinks and coffee drinks.
- Founded: 2017, with the first shop in Richardson, Texas, according to the company.
- System size: the company reports more than 80 locations as of 2026.
- Franchising: the company operates a dedicated franchise website for prospective owners.
- Fees and total investment: disclosed in Items 5, 6 and 7 of the current FDD; we could not verify current figures from the franchisor’s own materials, so request the latest FDD before building a loan request.
- SBA Franchise Directory: listed as Feng Cha (code S4810), with one note on lease documents explained below.
What Is Feng Cha?
Feng Cha was started by two college friends, now husband and wife, who bonded over a favorite boba shop, according to the company. They opened the first Feng Cha in Richardson, Texas, in 2017, and the company now reports more than 80 locations.
The menu is built around drink series such as milk teas, blended drinks, coffee drinks and the brand’s “Dirty” series, with best sellers including a crème brûlée boba drink, mango and strawberry blends and a matcha latte. The brand’s tagline is “Joy in Every Bubble.”
Why lenders view Feng Cha the way they do. A boba shop has a smaller kitchen than a full restaurant, but it depends on steady repeat traffic, afternoon and evening visits, and younger customers who also order through delivery apps. Lenders weigh a growing system with a recognizable product against the competitive tea and coffee market, so the operator’s plan and the site carry significant weight.
Feng Cha Franchise Costs
We could not verify current fee and investment figures from the franchisor’s own materials, so this section explains each cost category. Your FDD will give the exact numbers.
Initial franchise fee. Item 5 of the FDD discloses the fee, when it is due, whether any part is refundable and whether multi-unit discounts apply. It is usually paid at signing, so most buyers fund it from personal cash.
Real estate and build-out. Most shops lease retail space in shopping centers or near campuses and dense neighborhoods. Build-out covers plumbing for multiple sinks and water filtration, electrical capacity for brewing and blending equipment, counters, seating and the brand’s interior design.
Equipment. Expect commercial tea brewers, tapioca pearl cookers, sealing machines, blenders, ice machines, under-counter refrigeration, freezers for desserts, water filtration and point-of-sale hardware with ordering kiosks or online integration.
Opening costs and working capital. Opening inventory of teas, syrups, toppings, cups and lids, plus training, pre-opening payroll, grand opening marketing, deposits, insurance and funds for the first months of operation.
Total investment. Item 7 totals these categories into a low-to-high range. Expect line items such as:
- Initial franchise fee
- Leasehold improvements and construction
- Beverage equipment, refrigeration and furniture
- Signage and interior décor
- Point-of-sale and technology
- Opening inventory and supplies
- Rent, deposits, utilities and insurance
- Additional funds for the initial operating period
Compare each Item 7 line with landlord and contractor quotes for your site, since build-out costs vary widely by market.
Ongoing Fees and How They Affect Your Feng Cha Franchise Loan
Item 6 of the FDD lists the royalty, any brand or marketing fund contribution, technology fees, transfer and renewal fees, and any local marketing requirement. Royalties and marketing contributions are usually a percentage of gross sales.
How lenders factor fees into cash flow. Lenders deduct royalties and marketing contributions before measuring cash available for debt service. For a tea shop they also look at the cost of cups and toppings, delivery app commissions and labor during peak afternoon and evening hours. Check the franchise agreement for any remodel or refresh obligation, which is a future capital need.
Franchisor Requirements for New Owners
We could not verify a published net worth or liquid capital minimum from Feng Cha’s own materials, so ask the franchise development team for its current qualifications. Expect it to review your liquidity for the equity injection and franchise fee, your net worth, food service or retail management experience and your target market.
The approval process. Expect an inquiry, delivery of the FDD with the required waiting period before signing, financial review, site approval, signing and training. Bring in a financing specialist as soon as you have the FDD so lender review runs alongside franchisor approval.
Ways to Own a Feng Cha
A new shop. Opening a new location means financing the franchise fee, build-out, equipment and working capital without operating history. Lenders underwrite on projections, experience and the site. Read about franchise start-up financing.
Buying an existing shop. As the system grows, some existing Feng Cha shops come up for sale. A resale gives the lender actual sales history but requires franchisor approval of the transfer. Our article on buying a franchise resale and our franchise restaurant acquisition options explain the process.
Multi-unit agreements. Experienced operators may commit to several shops in a market. These agreements bring opening schedules that should be matched with a financing plan.
Financing Options for a Feng Cha Franchise
SBA 7(a) loans. Because Feng Cha is listed on the SBA Franchise Directory, an SBA 7(a) loan can finance the franchise fee, build-out, equipment and working capital for a new shop, or the purchase of an existing one, subject to underwriting.
SBA 504 loans. If you buy a building or other long-lived fixed asset, an SBA 504 loan may fit. Most boba shops lease their space, so 504 financing matters mainly for owner-occupied real estate.
Conventional term loans. Operators with strong credit and existing cash flow may consider conventional business loans, especially for additional shops.
Equipment financing. Sealing machines, tea brewers, pearl cookers, blenders and ice machines can often be financed separately to preserve cash. See our restaurant equipment financing and leasing options.
Working capital and lines of credit. Drink sales can shift with the weather and the school calendar. A line of credit can help cover payroll and supplies during slower stretches. Learn more about restaurant working capital.
Seller financing on resales. A seller may carry part of the price on an existing shop. Seller notes are typically subordinate to the primary loan, and SBA rules may limit how they are structured.
SBA Loans for Feng Cha Franchisees
SBA lenders use the SBA Franchise Directory to confirm that a brand’s franchise documents are eligible for SBA financing. A listing does not approve any borrower; it clears the franchise relationship so the lender can focus on the deal. The SBA 7(a) program maximum is currently $5 million, though program rules can change.
Feng Cha’s directory listing. Feng Cha is listed under code S4810 with one note: when the real estate where the franchise is located will secure the SBA-guaranteed loan, the Collateral Assignment of Lease and Consent and Agreement of Lessor may not be executed. In plain English, if the owner or an affiliate owns the building and pledges it as collateral, the franchisor’s lease assignment and landlord consent documents are not used for that location. For a typical leased storefront, the note has little practical effect.
SBA application tips. Prepare tax returns, a personal financial statement, a resume, the FDD and franchise agreement, a lease or letter of intent, contractor bids and monthly projections. Early estimates from our SBA loan calculator are for planning only and are not an offer or approval.
How Lenders Evaluate a Feng Cha Deal
Personal credit and financial history. Lenders review credit, tax returns and existing debts, and owners with significant stakes typically sign a personal guarantee.
Net worth and liquidity. You will need cash for the equity injection and franchise fee, plus reserves after closing.
Industry and management experience. Food service, coffee shop or retail management experience helps, especially scheduling staff for afternoon and evening peaks.
Business plan and projections. Show sales by daypart and season, average ticket assumptions you can support, delivery share and commissions, and a ramp-up period. Our article on how the FDD shapes franchise financing explains which items lenders read closely.
The FDD and franchise agreement. Lenders review the term, renewal and transfer rights, territory, fees and the franchisor’s financial statements. Check Item 19 to see whether the FDD includes financial performance representations.
Site and lease. Lenders want a lease term at least as long as the loan, rent that fits projected sales and enough foot traffic and parking for quick visits.
Multi-Unit Growth and Development Agreements
Owners who succeed with one Feng Cha often add shops nearby. A development agreement can secure territory but sets deadlines and may require additional fees. Read about multi-unit franchise financing.
Financing additional shops. Once the first shop has history, lenders can underwrite its cash flow alongside the next. Pace openings so reserves are not spread too thin.
Real-World Scenarios
A first-time owner near a campus. A former coffee shop manager opens a Feng Cha near a university, using an SBA 7(a) loan for build-out, equipment and working capital and paying the franchise fee from savings.
A buyer acquiring an existing shop. A buyer purchases an established Feng Cha from a franchisee. The lender reviews sales history, the lease and the transfer approval, and the buyer keeps a working capital reserve for the transition.
A restaurant group adding a beverage brand. An operator of other franchises signs a multi-unit agreement and finances each shop’s equipment separately while using existing cash flow to support a conventional term loan.
Common Mistakes to Avoid
- Relying on fee or investment figures that are not in the current FDD
- Underestimating plumbing, water filtration and electrical costs in the build-out
- Ignoring cup, topping and delivery commission costs in projections
- Projecting summer-level sales year round
- Leaving too little working capital for the ramp-up
- Signing a lease shorter than the loan term
For more pitfalls, read about restaurant loan mistakes that slow down approvals.
Next Steps to Finance Your Feng Cha Franchise
Step 1: Request the current FDD. Review Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 2: Confirm the franchisor’s qualifications. Ask about current net worth, liquidity and experience expectations.
Step 3: Find a site. Look for foot traffic, visibility and a younger customer base, then negotiate lease terms.
Step 4: Build projections. Model sales by daypart and season, with realistic supply and labor costs.
Step 5: Talk to a financing specialist. Compare SBA 7(a), conventional and equipment financing for your deal.
Step 6: Apply, close and open. Submit your documents and coordinate closing with construction and training.
Feng Cha Franchise Loan FAQs
How much does it cost to open a Feng Cha?
The total investment range is disclosed in Item 7 of the current FDD. We could not verify current figures from the franchisor’s own materials.
What is the Feng Cha franchise fee?
The fee is disclosed in Item 5 of the FDD and is usually paid at signing from personal cash.
What royalty does Feng Cha charge?
The royalty and any marketing fund contribution are listed in Item 6 of the FDD.
How much liquid capital do I need?
Ask Feng Cha for its current requirements. Lenders also want enough liquidity for the equity injection, franchise fee and reserves.
Is Feng Cha eligible for SBA loans?
Yes. Feng Cha is listed on the SBA Franchise Directory under code S4810, subject to normal underwriting.
How many Feng Cha locations are there?
The company reports more than 80 locations as of 2026.
Can I buy an existing Feng Cha?
Yes, with franchisor approval of the transfer. Lenders will review the shop’s financials, lease and remaining franchise term.
Can a first-time owner get a Feng Cha franchise loan?
Yes, if the franchisor approves you and you show management experience, good credit and enough liquidity.
Does Feng Cha offer financing?
Check Item 10 of the FDD, which discloses any financing the franchisor offers.
How long is a Feng Cha franchise agreement?
The term, renewal and transfer conditions are in Item 17 of the FDD. Lenders generally want the remaining term to be at least as long as the loan.
Final Thoughts
A Feng Cha franchise loan depends on a realistic view of tea shop economics: a specialized build-out, steady supply costs and sales that move with the seasons. Get the current FDD, choose a high-traffic site and involve your financing team early.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing and restaurant financing solutions.
