How does a drive-thru iced tea franchise promote greater than 400 franchises in 5 years, and earn the No. 9 spot on our High New & Rising Franchises listing? We spoke with HTeaO’s chief improvement officer Andrew Hawes to study why franchisees see the model as a candy alternative.
How did HTeaO get began?
Our founder, Gary Hutchins, has owned a hamburger restaurant in Amarillo, Texas, known as Buns Over Texas, for the reason that 80’s. He began promoting iced tea there within the mid-2000’s. And across the time of the final recession in 2008, he began noticing individuals had been coming in and as a substitute of spending 10 bucks on a hamburger, they had been simply spending two or three bucks on an iced tea. So in 2009 he added on 1,200 sq. toes to his hamburger restaurant and launched Texas Tea, providing eight flavors of iced tea from a drive-thru.
His son Justin, who’s now our CEO, joined him and his mother in 2012, and that is once they launched the primary prototype of a freestanding Texas Tea. And as soon as we opened that, we realized we would have one thing particular that we would have the ability to franchise. So we spent 5 – 6 years constructing the franchise mannequin and the assist system and the infrastructure, after which launched the franchise alternative in 2018, on the identical time that we rebranded Texas Tea to HTeaO.
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Do you suppose it is a idea that may go nationwide?
I feel in some unspecified time in the future it’ll, and we have even had some curiosity, crazily sufficient, from locations like North Dakota and Idaho. However proper now our focus is the southeastern United States, what I’d name “tea consuming nation.” The barrier to entry is far much less as a result of you do not have to elucidate what iced tea is somebody in Georgia. So our progress technique, nonetheless being an rising younger model, is to construct our model and our consciousness within the southern U.S., after which as soon as we’ve that publicity and have a thousand areas open, we are able to get into a number of the extra northern states that are not as acquainted with iced tea but. And one of many fundamental causes we introduced on what we name our brewhouse choices, which is our sizzling tea and low choices, together with growing our morning site visitors, was to finally go into these markets the place sizzling drinks are extra common.
What are your targets for the model for 2023 and past?
Now we have 68 areas open and operational right now, and 93 underneath building, so that ought to convey our whole to about 160 shops open within the subsequent 12 months. Past that, we have already awarded 430 franchises in whole, and we’re taking a look at awarding 175 extra this yr. The plan is to have 500 areas open by the top of 2026.
To what do you attribute that progress?
It is a mannequin constructed across the most worthwhile a part of a restaurant. Any eating places proprietor will inform you drinks are the place the cash is made. We eradicated the entire frustration and gear that goes with meals preparation. And it would not take a rocket scientist to appreciate that water, tea, and ice aren’t too terribly costly, so the margins will be very profitable. I feel individuals can visualize, Hey, that is one thing I can do. I do not want culinary expertise or a background in restaurant administration.
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What kinds of franchisees has HTeaO attracted?
To start with, it was numerous second profession kind individuals — individuals who mentioned, “I would like to construct a enterprise for myself, however I would like that assist mechanism of a franchise.” So for the primary few years, our progress was closely weighted towards single-unit operators, they usually’ve been incredible. Now that we have constructed some model consciousness, we’re beginning to entice multi-unit, multi-brand franchise companions, which is extraordinarily humbling. I nonetheless view us as a really younger, unknown model, so to have somebody with 20 or 30 years of expertise within the franchise house take a leap of religion means so much to our workforce. We’re nonetheless going to welcome single-unit franchisees, however bringing on multi-unit companions who can do 5 to twenty shops over a shorter interval as a result of they’ve the infrastructure already in place is actually going to be key to our progress going ahead.