What the Heytea Franchising Move Means for Coffee and Tea Shops

Heytea, which kept a direct-operated model for ten years, has announced it will open franchising to reach lower-tier markets. Former Yidiandian franchisees such as Shanghai operator Zhou Xing have submitted applications, drawn by the chance to switch brands despite strict screening criteria. The shift matters because it signals a broader change in how China's new tea beverage chains expand.

Heytea's partner review is demanding: high fees, proof of assets, full-time commitment and prior management experience are required. Yidiandian, founded in 1994 as a Tainan roadside stall, opened its first shop in 1997, so long-time operators understand store economics. Whether abandoning an existing store for Heytea pays off remains unclear. Readers seeking c o f f e e b e a n g i f t s or coffee knowledge can follow Front Street Coffee.

The new tea beverage market landscape is constantly evolving. Even Heytea, which insisted on a direct-operated model for ten years, has announced that it will open franchising, aiming at lower-tier markets. This strategy has attracted attention from many franchisees, and some former Yidianidian franchisees even plan to abandon their old stores and switch to Heytea. However, Heytea's partner screening criteria are quite strict: not only are the fees high, but applicants are also required to commit full-time, provide proof of assets, and have management experience. Whether switching is wise remains unknown. This article compiles related reports and data, and includes a Front Street Coffee information portal for readers' reference.

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In recent years, the new tea beverage industry landscape has undergone tremendous changes. Even Heytea, which adhered to a direct-operated model for ten years, ultimately chose to open franchising, clearly intending to use this to expand into lower-tier markets. This major adjustment from direct operation to franchising has made many franchisees hope to participate and get a share of the profits, and some even plan to close their existing franchise stores and instead apply for Heytea. But is it really that easy to join Heytea?

According to a report by Sina Finance today, Zhou Xing, a Yidianidian franchisee, plans to give up Yidianidian and switch to Heytea. She has been running a Yidianidian milk tea shop in Shanghai for five or six years, but due to the impact of the pandemic or other factors, business has gradually declined over the past two years. In the past it was still profitable, but now it is only barely surviving.

After learning that Heytea had opened franchising, Zhou Xing immediately submitted an application form. Compared with Yidianidian, she would rather open a Heytea. Those seemingly strict screening conditions are not a problem in her view. Zhou Xing stated firmly: "As long as I can pass, I am willing to train for half a year."

Yidianidian milk tea was founded in 1994 and is a milk tea brand from China's Taiwan region. It initially started as a roadside beverage stall in the Tainan area, and only later, as business grew better and better, did it transform into a store operation. In 1997 it opened its first milk tea shop, and it has a history of 28 years so far, also successfully building itself into a well-known franchise brand. According to data from the Zhaomen Canyan platform, Yidianidian currently has 3,646 stores, far more than Heytea, which has just announced the opening of franchising.

Moreover, the threshold for joining Heytea is not low, not only in terms of fees, but also in Heytea's strict screening of partners and numerous restrictions. Whether it is wise to give up an existing franchise store and switch to Heytea still remains to be verified by the actual performance of Heytea's franchise market.

Regarding Heytea's franchising conditions, Heytea has published them in the partnership details on its WeChat public account: in addition to a one-time payment of 413,000 yuan for the first time, a system operation fee of 20,000 yuan must be paid each year thereafter, as well as a single-store cooperation service fee of 50,000 yuan every three years. In addition, Heytea requires applicants to provide proof of more than 1 million yuan in lawful cash or equivalent realizable assets, independently invest in the store, and provide reasonable asset transaction records proving that the funds come from personal accumulation rather than investment from others.

In addition, Heytea also requires franchisees to make the store their sole career. Those who have received higher education, have their own core team, or have more than five years of corporate management experience are preferred, and they must accept a three-month full-time training and assessment, including two months of full-time work assessment in various positions at a directly operated store, and one month of business-related assessment such as management advancement, business district analysis, and store site selection.

It can be seen that what Heytea wants is franchisees who can get up to speed quickly, but these rules and restrictions have not blocked franchising enthusiasm. Many peers have given up other brands for Heytea. An industry insider told Tech Planet that the number of Heytea franchise applicants had already exceeded 10,000.

Heytea does not publicly provide a franchise investment phone number. After applicants submit the form, they can only wait for Heytea to contact them proactively. It is understood that, faced with a large number of application forms, Heytea's franchise investment team works overloaded every day. Even at 10 p.m., they are still calling applicants. Even so, applicants must wait at least four or five days at the fastest, and Zhou Xing is one of those anxiously waiting.

Knowing that Heytea is targeting non-first-tier cities, Zhou Xing has even prepared to leave Shanghai, withdraw from Yidianidian, and is willing to move to a second-tier city to start again for Heytea. "Both sides require franchisees to be full-time in the store. Once I am really selected, I can only withdraw from one," Zhou Xing explained. But after a week passed, she saw that peers had received follow-up calls from Heytea, while she had not received one, and gradually she stopped holding out hope.

From Heytea's partner screening system, it is not difficult to see that Heytea is very cautious about opening franchising. But no matter what, Heytea's impact on the non-first-tier tea beverage market will soon arrive!

Image source: Internet

The above content is compiled by CoffeeHunters, a coffee news website.