Initial Investment for a Bubble Tea Shop
The cost to open a bubble tea shop may be as little as $75,000 or as high as $500,000. Most entrepreneurs can expect to spend around $100,000 to $150,000 to start their own boba tea café. The single biggest cost for most bubble tea shops will likely be real estate. Of course, there are a number of other expenses associated with opening up a bubble tea shop.
Typical Expenses
- Real estate (buying, building, or leasing space)
- Construction costs for shop walls: $800 to $1,500 per linear foot
- Shop space rental deposit
- Space preparation
- Equipment
- Ingredients
- Franchise fees (if applicable)
- Furniture and décor
- Insurance
- Labor
- Marketing
Franchising vs. Independent Opening
It is a fact that most business people would prefer to buy into the franchise of a successful bubble tea shop than opening their own business outright. A franchise often requires a capital commitment of at least $200K for renovations, upfront lease deposits, franchise fees, and cost of goods.
Profitability and Market Insights
Profit margins for bubble tea shops range from 20-30%. In markets like Singapore, bubble tea ventures can be particularly lucrative with high consumer spending on bubble tea and premium brands thriving in the region. Urban areas tend to have higher traffic and sales, but regional customer draw can also make rural bubble tea cafes successful. Initial franchise costs in Singapore range from $30,000-$255,117, with ongoing costs for equipment, furniture, ingredients, space rental, and staff. Selling 200 $5 cups daily can generate $1,000 in daily revenue, leading to substantial monthly profits after accounting for expenses. A successful location such as college campuses can greatly contribute to profitability.