How to Finance an HTeaO Franchise: Drive-Thru Tea Costs
By Marc Cornella
An HTeaO franchise loan pays for something unusual in the beverage world: a drive-thru store built almost entirely around iced tea, with its own water filtration system, a wall of brewed flavors and very little food. That focus keeps the menu simple, but it also shapes what lenders look at, from the site and drive-thru lane to the equipment that makes every cup.
US Professional Funding is not affiliated with, sponsored by or endorsed by HTeaO; the name is used only to describe the business. Figures from the franchisor’s disclosure document and website can change, loan programs and terms vary by lender and borrower, and every loan is subject to review and approval. Nothing here is legal, tax or investment advice. Buyers should review the current Franchise Disclosure Document (FDD) and franchise agreement with a franchise attorney and an accountant before signing anything.
HTeaO Franchise Loan at a Glance
- Concept: a Texas-born iced tea brand serving 20+ sweetened and unsweetened tea flavors, plus water and coffee products, in-store and through a drive-thru.
- System size: the company reported more than 180 locations across 11 states in an August 2026 announcement.
- Headquarters: Fort Worth, Texas.
- Distinctive equipment: every location uses a proprietary water filtration system, which is a meaningful part of the equipment package.
- Supply model: the company says it runs its own supply chain, which it describes as lowering franchisees’ cost of goods.
- Fees and total investment: set out in Items 5, 6 and 7 of the current FDD; request the latest version from the franchisor before building a loan request.
- SBA Franchise Directory: listed as “HTeaO,” with one note about real estate collateral explained below.
What Is HTeaO?
HTeaO’s story starts in Amarillo, Texas, where it began in 2009 as a family side business serving iced tea. The company says the brand was officially born in 2018. Its founders include Justin Howe, now Executive Chairman, and Gary Hutchens, and the company is based in Fort Worth.
The concept is narrow by design. Stores pour 20+ flavors of brewed tea, from unsweet regular and blueberry to sweet peach, mango and coconut, along with seasonal refreshers, a coffee and matcha menu and bulk options such as mini gallons. Every location runs a proprietary water filtration system, and the brand stresses natural ingredients rather than powders and syrups.
How lenders view the brand. Lenders see a young, fast-growing system with a simple menu and a recognizable drive-thru model. Because many stores are relatively new, lenders lean heavily on the FDD, the unit’s location and the borrower’s own financial strength rather than decades of system history.
HTeaO Franchise Costs
HTeaO’s initial fee, ongoing fees and estimated initial investment are disclosed in the current FDD. Because those numbers change from year to year and differ by store type, get the latest FDD directly from the franchisor and build your loan request from it.
Initial franchise fee. Item 5 of the FDD discloses the initial franchise fee and any development or multi-unit fees. Lenders typically treat the franchise fee as an intangible cost, so it is financed as part of a larger package rather than on its own.
Real estate and build-out. HTeaO stores rely on a drive-thru, so site selection matters more than in a walk-in-only concept. A store may be a ground-up building on a pad site or a conversion of an existing building with a drive-thru lane. Leasehold improvements, site work, plumbing for the water system, electrical, signage and the drive-thru lane itself are often the largest single part of the budget. Our article on financing a restaurant build-out covers how construction draws and contingencies work.
Equipment. The core package includes the water filtration system, tea brewing equipment, dispensing towers, ice machines, refrigeration, drive-thru communication and point-of-sale technology. Because every store depends on clean, filtered water and steady ice production, lenders tend to view this equipment as essential to operations.
Opening costs and working capital. Opening inventory, initial training costs, pre-opening marketing, deposits, insurance and additional funds for the early months of operation all belong in the plan.
Total investment. Item 7 of the FDD gives the estimated initial investment as a range, broken into line items. When you read it, expect categories along these lines:
- Initial franchise fee
- Real estate, rent and security deposits
- Leasehold improvements, site work and drive-thru construction
- Water filtration, brewing, ice and refrigeration equipment
- Furniture, fixtures, signage and menu boards
- Technology, point-of-sale and drive-thru communication systems
- Opening inventory and supplies
- Training, licenses, permits and grand opening marketing
- Additional funds for the initial operating period
Note which costs the Item 7 table excludes, such as land purchase. If you plan to buy the land, your total project cost can be well above the Item 7 range.
Ongoing Fees and How They Affect Your Loan
Royalty and brand fund. Like most franchisors, HTeaO charges ongoing fees that are disclosed in Item 6 of the FDD, typically a royalty on sales and a contribution to a brand or advertising fund. Both are usually calculated on gross sales, so they come off the top before rent, payroll or loan payments.
Product purchases. HTeaO says it runs its own supply chain. Item 8 of the FDD explains required purchases, approved suppliers and whether the franchisor earns revenue on those purchases.
How lenders factor these costs in. Lenders build a cash flow model that subtracts royalty, brand fund contributions, rent and operating costs from projected sales, then compare what is left to proposed loan payments. A margin of safety above debt service, rather than just breaking even, is what supports approval.
Franchisor Requirements for New Owners
HTeaO evaluates candidates through its franchise development team. Its candidate requirements, including any minimum net worth or liquid capital, are set by the franchisor and can change, so confirm them directly with HTeaO and in the current FDD.
Lenders generally expect a franchise buyer to bring meaningful personal capital, keep reserves after closing and show management experience suited to a fast-paced drive-thru, along with a realistic opening schedule if you sign for more than one store.
The approval process. Candidates typically speak with the development team, receive the FDD, talk with existing franchisees and, if approved, sign before site selection. Line up financing conversations alongside these steps.
Ways to Own an HTeaO
Opening a new store. Most buyers enter by developing a new location, and an HTeaO franchise loan for a new store finances site work, construction, equipment and opening costs on projections rather than history. Our franchise start-up financing page explains how lenders approach a new unit.
Buying an existing store. As the system grows, some franchisees sell established stores. A resale lets a lender review actual sales and expenses, and the buyer avoids construction risk. HTeaO’s transfer approval, any transfer fee and the remaining term of the seller’s agreement all affect the deal. See our overview of financing a franchise restaurant acquisition.
Multi-unit development. HTeaO has grown largely through franchisees who open several stores in a market. A development agreement can secure territory, but it also commits you to opening on a schedule, which means planning financing for more than one store.
HTeaO Franchise Loan Options
SBA 7(a) loans. Because HTeaO is on the SBA Franchise Directory, an SBA 7(a) loan is often the first option buyers explore. A single 7(a) loan can cover the franchise fee, build-out, equipment, opening inventory and working capital, and it can also fund the purchase of an existing store.
SBA 504 loans. When a buyer purchases the land and building or constructs a freestanding drive-thru store, the SBA 504 program can finance the real estate and long-lived equipment, with a separate loan for the franchise fee and working capital.
Conventional term loans. Borrowers with strong liquidity, collateral or existing stores may use a conventional business loan instead of an SBA loan, particularly for a second or third unit.
Equipment financing. The water filtration system, brewing equipment, ice machines, refrigeration, drive-thru headsets and point-of-sale hardware can often be financed separately, which preserves cash for construction and opening. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. Iced tea demand can be seasonal, with warmer months typically busier than winter in many markets. A line of credit can bridge slower periods, fund pre-opening payroll and cover marketing pushes. Explore restaurant working capital options.
Seller financing on resales. When buying an existing store, a seller may agree to carry part of the price. A seller note is typically subordinate to the senior loan, and SBA rules can limit how it is structured, so coordinate with your lender before agreeing to terms.
SBA Loans for HTeaO Franchisees
SBA lending to franchisees runs through the SBA Franchise Directory, a list of brands whose franchise documents have been reviewed for SBA eligibility. A listing clears the franchise relationship for SBA review; it does not approve any borrower, and every loan is still underwritten on its own merits.
HTeaO’s listing. HTeaO appears on the directory under the name “HTeaO.” Its listing carries one note: when the real estate where the franchise business is located will secure the SBA-guaranteed loan, the Lease Rider may not be executed.
What that note means. A lease rider is an addendum to a store lease that protects the lender and franchisor when the franchisee rents the property. If you own the real estate and pledge it as collateral for the SBA loan, there is no third-party lease to amend, so the rider is not needed.
Program limits. The SBA 7(a) program maximum is currently $5 million, though program rules can change.
Application tips. Gather the FDD, your signed or proposed franchise agreement, a lease or letter of intent, construction bids, equipment quotes, a business plan with monthly projections, personal financial statements and tax returns. The SBA loan calculator can help with early payment estimates; results are for planning only and are not an offer.
How Lenders Evaluate an HTeaO Franchise Loan
Personal credit and financial history. Expect a review of credit, tax returns and your personal financial statement, plus a personal guarantee.
Net worth and liquidity. Lenders want to see your equity injection and reserves after closing. A store that opens in a cold season can take longer to ramp.
Industry and management experience. Restaurant, retail or multi-unit management experience helps, as does a clear plan for who runs the store day to day.
Business plan and projections. Projections should reflect drive-thru traffic, seasonality, beverage-only ticket sizes, staffing for peak hours and the full fee structure from Item 6. Our article on how lenders read a Franchise Disclosure Document explains which items carry the most weight.
The FDD and franchise agreement. Lenders read the term, renewal and transfer rules, required purchases, territory rights and any development schedule. Review Item 19 to see whether the current FDD includes financial performance representations; if it does, use them as a reference point, not a promise.
Site, lease or real estate. Drive-thru stacking, access, visibility and lease length all matter. Lenders typically want the lease term, with renewals, to cover the loan term.
Historical financials for resales. When buying an existing store, expect to provide several years of profit and loss statements, sales reports and tax returns, which the lender reconciles.
The Water System and Drive-Thru: Equipment Deep Dive
The proprietary water filtration system is central to HTeaO’s product. Water is the main ingredient in every tea, and the brand uses filtered water for both its brew and its ice. For a lender, that means the system is a mission-critical asset: if it goes down, the store cannot serve its menu.
Financing the package. Many owners finance the core equipment over its useful life, separate from the build-out, so the payment schedule matches how long the equipment lasts.
Multi-Unit Growth and Development Agreements
HTeaO’s growth has relied heavily on operators who build several stores in a region. A development agreement can protect your territory, but it also creates a legal commitment to open stores on a schedule.
Financing a second or third store. Once your first store has operating history, a second HTeaO franchise loan becomes easier to support, because lenders can underwrite its cash flow alongside projections for the next one. Many operators finance each store with its own loan, while others refinance into a single larger facility as the group grows.
Real-World Scenarios
A first-time owner in a growing suburb. A former retail manager signs for one HTeaO in a fast-growing suburban market. She uses an SBA 7(a) loan for the build-out, equipment and working capital, contributes personal funds for the down payment and keeps a reserve for the first winter.
A multi-unit operator buying land. An experienced restaurant operator signs a development agreement and decides to own the real estate for a freestanding drive-thru store. He uses an SBA 504 loan for the land, building and long-lived equipment, and a smaller loan for the franchise fee and opening costs. Because the property secures the loan, the lease rider noted in the directory listing does not apply.
A buyer acquiring an established store. A couple buys an existing HTeaO from a franchisee who is relocating. The lender reviews the store’s historical results, confirms transfer approval and the remaining agreement term, and finances the purchase with a small seller note subordinate to the senior loan.
Common Mistakes to Avoid
- Relying on secondhand summaries instead of the current FDD for fees and investment ranges
- Choosing a site with poor drive-thru stacking or difficult access
- Ignoring seasonality when planning working capital
- Signing a development agreement without a financing plan for every store on the schedule
- Forgetting that royalty and brand fund fees come off gross sales before debt service
For more pitfalls that apply across the restaurant industry, read about the loan mistakes restaurant owners make most often.
Next Steps to Finance Your HTeaO Franchise
Step 1: Request the current FDD. Get the latest disclosure document from HTeaO and confirm the fees, Item 7 investment range and candidate requirements.
Step 2: Review it with advisors. Go through Items 5, 6, 7, 8, 12, 17 and 19 and the franchise agreement with a franchise attorney and accountant.
Step 3: Assess your capital. Total your liquid funds, net worth and the reserves you want to keep after closing.
Step 4: Talk with a financing specialist early. Before you sign a lease or development agreement, learn how an SBA or conventional loan would be sized for your project.
Step 5: Lock down the site and budget. Secure a site with good drive-thru access, gather construction bids and equipment quotes, and finalize a budget with contingency.
Step 6: Apply and coordinate approvals. Submit your loan request with the FDD, franchise agreement, lease or purchase contract, projections and personal financial documents, and keep the lender’s timeline aligned with the franchisor’s.
Step 7: Close and prepare for opening. Fund construction draws, schedule equipment delivery and installation, and set aside working capital for training, hiring and the opening period.
HTeaO Franchise Loan FAQs
How much does it cost to open an HTeaO franchise?
The estimated initial investment is disclosed as a range in Item 7 of HTeaO’s current FDD. The total depends on whether you lease or buy the site, the extent of drive-thru construction, local building costs and the equipment package. Request the current FDD for exact figures.
What is the HTeaO franchise fee?
The initial franchise fee appears in Item 5 of the current FDD, along with any fees for developing multiple stores. Confirm the current amount directly with the franchisor.
What royalty does HTeaO charge?
Royalty and brand fund contributions are listed in Item 6 of the FDD. They are usually calculated on gross sales, so lenders subtract them before measuring cash available for loan payments.
Can I get an SBA loan for an HTeaO?
Yes, subject to normal underwriting. HTeaO is listed on the SBA Franchise Directory, so franchisees can apply for SBA 7(a) and 504 loans. Confirm current directory status with your lender when you apply.
Can I finance the water filtration system and equipment separately?
Often, yes. Equipment such as the water system, brewers, ice machines and drive-thru technology can be financed with an equipment loan or lease, either as part of the opening package or later when items need replacing.
Can I buy an existing HTeaO store?
Yes, when an owner is selling and HTeaO approves the transfer. A resale lets lenders review actual results, and the purchase can be financed with an SBA 7(a) loan, a conventional loan or a combination that may include a seller note.
Can a first-time owner get an HTeaO franchise loan?
Yes, if HTeaO approves you and you meet lender requirements. Solid personal finances, management experience and a detailed plan help offset a lack of prior ownership.
What documents do I need to apply?
Typically the FDD and franchise agreement, projections, a lease or purchase contract, construction and equipment bids, a personal financial statement and tax returns.
Does HTeaO offer financing?
Item 10 of the FDD discloses whether the franchisor offers direct or indirect financing. Most franchisees arrange their own loans with outside lenders.
How long is the HTeaO franchise term?
The term, renewal rights and transfer conditions are summarized in Item 17 of the FDD. Lenders compare the remaining term with the loan term, so confirm it before borrowing.
Final Thoughts
HTeaO pairs a simple, beverage-only menu with a drive-thru format and a specialized water system, which makes site quality and equipment planning central to any loan request. Buyers who start from the current FDD, choose a strong site, plan for seasonality and use the brand’s SBA Franchise Directory listing wisely give themselves a solid foundation, whether they are opening one store or building a market.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment, working capital and real estate for established brands. Learn more about our franchise business financing and restaurant financing solutions.
