One doesn’t follow the other, and it feels like you might be conflating margin with interest rate? You can make a metric crapton of money on low margins if you’re efficient and have good volume; it’s basically Walmart’s business model.
franchise buy ins for tea shops here range 1~5million depending on the brand. makes good money in a good location. it is obviously a volume based business, plus the ingredients are nearly always dirt cheap.
Better money is in starting franchises and selling them out and supplying them.
thatshow you know most small restaurants are going to fail. they spend a million decorating a tiny space with 10 seats and sell low margin product with high rent. essentially the opposite way to make money
Depends what they’re selling. Booze is high margin for example.
Boba is probably decent margin - tea, tapioca balls, sugar. not exactly high cost items.
So many places, bubble tea shops included, plus others, are not profitable, they are just barely surviving and working themselves to death, maybe even taking a loss at times even to the point of throwing in their own money to keep them afloat. But that’s all they got.
Then eventually huge percentage of them just die and disappear.
Don’t be misled by the sparkly sweet bubbles.
I’m just realistic.
Ya for sure. Iwas talking about regular ol owner run type restaraunts. the profitable ones are on scale. and the old local ones that spend zero dollars on aesthetics.
ya. the money is supplying people that work themselves to death. all those brands make really good money off being the wholesale suppliers.
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Middleman is always the best thing to be.
But failing that, it’d be cool to have a simple, reliable business that can run on auto-pilot.
(Of course.)
If something like bubble tea were a safe investment with the only real hurdle being the startup capital, I’d be in on it. But I have no idea on the numbers. I suppose you can ask for a company’s books and see. Not knowing Chinese is a hurdle though.
tea shops do well. the make or break is probably rent. own the house, it’s all money. pay 50k rent in a high traffic area, it’s harder selling at franchise fixed prices. also depends highly on the franchise reputation. loads of them come out famous and well run, then they get greedy, cut quality and equally fast they lose their reputation and they slowly piss off into slow back streets. Good brands do well everywhere. like 50 Lang. but they cost much more to buy in as well.
personally I wouldnt open one unless I had a house to run it out of. I doubt I would risk the high rent for this type of shop. They are very easy to run though and can survive off unskilled drone worker bees, so it is easy to find staff, although usually the low pay makes it a constant revolving door.
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