One of the biggest food trends sweeping the world right now is bubble tea. It is a new type of beverage that, like coffee and its normal tea counterpart, is becoming common throughout the UK. Over the past few years, the coffee sector has exploded. The coffee market has well and truly been tapped with hundreds of coffee franchises and businesses operating in the UK. There are over eight thousand branded coffee chains in the UK alone and that doesn’t take in to consideration kiosks and mobile food and drink franchises.
Since the start of the twenty-twenties, the bubble tea market has too, exploded in the UK. Originating in Taiwan in the early 1980s, the popular drink soon went viral after arriving in the USA. Despite its origins being in Taiwan and mainly having an Asian following, it truly is a global phenomenon, and growing recognition has sparked growing interest from a wide range of demographic – from children through to the elderly.
What is Bubble Tea?
Bubble tea can be served either hot or cold and gets its name from the soft chewy balls at the bottom of the drink. The balls, called “Tapioca Pearls” are starch based and are included in the drink for texture rather than flavour. The tea itself is similar to normal tea in that it uses either black or green tea, whilst other ingredients such as syrup, honey, toppings and other ingredients provide sweet flavours that so make the drink as popular as it is today.
The Demand for Bubble Tea
According to Allied Market Research, the global Bubble Tea market was worth a staggering $2.4bn in 2019, and is set to grow to $4.3bn by 2027, growing further to $5.8bn by 2032. While North America does dominate a fair share of this market, the UK market is closely catching up thanks to franchising.
The demand for bubble tea in the UK has led to the rapid deployment of a number of serving outlets. In the UK, you’re likely to find a handful of bubble tea stores in any popular shopping centre. Thanks to the simplicity of running a drinks business, a more affordable opportunity exists within the bubble tea market through the form of kiosks. Kiosks are lightweight setups often established in busy locations like shopping centres, railway stations and airports. Already-established coffee shops and cafes are too starting to serve bubble tea, further fuelling its demand.
With a predicted decade growth rate of 8.8% between 2022 and 2032, now is a fantastic time to get involved.
Getting Involved with Bubble Tea Franchising
Just like many other food and beverage businesses, bubble tea is dominating the market in the UK through franchising. Because the franchisee uses their own funds to invest and set up their own business under the franchisor’s brand, franchisors can expand their business incredibly quickly. The franchise approach means franchisors can open up multiple bubble tea franchises at the same time, allowing for rapid expansion over their competitors.
There are a number of ways to get involved with the bubble tea boom, with the best entry point being franchising. If you already own an existing food and beverage business, you might already be selling bubble tea. And if you don’t already own a business, franchising provides a great starting point into the world of business ownership.
If you have or intend to have, a bricks and mortar premises, most bubble tea franchises offer packages for franchisees to run their own bubble tea shop. Franchising means you’ll be following the branding and operational procedures as other franchisees trading as that brand. This is true regardless of which setup you choose. With the highstreet retail, bricks and mortar setup, the investment will usually include store fitout, fascia and for those that don’t already have premises, help choosing a suitable location and setup. The level of support will vary and depend on the franchise so be sure to explore each opportunity as part of due diligence. The investment of a bubble tea shop will usually be in the region of £100,000 rising to half a million depending on the size of the store. In addition you will need at least half of this figure available in working capital, plus the franchise fee which will for most bubble tea franchises, be around the £25,000 mark.
The second type of bubble tea franchise – a kiosk – offers a much cheaper alternative to bricks and mortar bubble tea stores, whilst still retaining the high footfall positioning of a shopping centre or transport hub. You’ll still need around £40,000 in working capital, but the investment will often be less, often around £50,000. That does usually include the kiosk fitting too in a suitable location, but as usual check with the franchisor as different businesses vary.
It is also worth exploring the coffee franchises sector, because as mentioned earlier, a lot of businesses are adopting the bubble tea market and offering it as a product alongside their existing drinks. Be sure to explore the mobile coffee franchises sector too, as van based coffee is one of the more affordable entry points into this lucrative market.
Bubble Tea Franchise Examples
In the UK, as of 2021, the most popular bubble tea franchises are:
- Ding Tea
- Cupp Bubble Tea
- Gong Cha
- Mooboo Bubble Tea
Many coffee shop franchises are also diversifying to include bubble tea in their product range. This helps them keep up with the latest market trends and establish a wider customer audience.
Benefits of Running a Bubble Tea Franchise
As discussed, the bubble tea market is growing considerably and is attracting a customer base of considerable demographic. Young, old, people from all cultural and nationality backgrounds, just like coffee, bubble tea is a market which shows no signs of slowing. Provided the business is positioned well locally, the successful nature of franchising has been proven by other franchisees and the history of the franchisor’s business. As opposed to going it alone, franchising for bubble tea provides a good entry point and the benefits will be there to see from a very early stage.
Zooming out to a broader view of franchising in general, the benefits of becoming a franchisee over setting up a business from scratch weigh greatly on the franchising side. If you’re familiar with the franchising concept and how it works, you’ll know that franchisees are built upon the success of the founding business, and a proven system of operation. Franchisees are able to benefit from continuous support from the franchisor. Initial findings from exploring a number of bubble tea franchises will show that ongoing there are advertising and marketing levvys, and these are used by the franchisor and partners to help grow the brand and awareness of bubble tea. Ultimately, this will have a positive effect on the market and franchisees.
Potential Considerations With Bubble Tea Businesses
Bubble tea is still a growing market, and despite the current projected growth, it is difficult to say which direction the market will take one decade on from 2032. Presently, there is a lot of competition within the bubble tea market. As mentioned earlier, some shopping centres will have multiple bubble tea stores, but because the market is so new, only reaching UK shores in the last two decades, the high number of outlets and still-small but growing market could lead to struggles for some outlets, to get enough footfall to cover their costs. If these units fail, it can have a negative impact on the rest of the network. Expansion of the franchise will stall due to the number of failing franchisees, and this can ultimately collapse the entire brand. Bubble tea is a growing concept. Should you invest? For the foreseeable future, bubble tea franchises are going from strength to strength, offering diverse entry points such as shops and kiosks, opportunities which suit a range of entrepreneurs and budgets. The market is projected to continue growing for the next 10 years, but after then, only time will tell.
If you wish to pursue joining a rapidly growing market, bubble tea is a fantastic choice. Becoming a franchisee now would be a good choice, whilst the market is still on the up, and if the outlook starts to take a turn for the worst, you can sell the franchise or pursue other avenues whilst leveraging the experience you have gained.