In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Sweetwaters Coffee & Tea franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Sweetwaters Coffee & Tea franchise, based on Item 7 of the company’s 2018 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Sweetwaters Coffee & Tea franchise, based on Items 5 and 6 of the company’s 2018 FDD
- Section IV – Number of franchised and company-owned Sweetwaters Coffee & Tea outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD
- Section V – Presentation and analysis of Sweetwaters Coffee & Tea’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:
- 2017 total net sales for the 2 affiliate-owned and 3 franchised Sweetwaters Coffee & Tea Cafes (separately stated) that were open for the entire 2017 calendar year
- 2017 total net sales, cost of sales, gross margin, total labor, other operating expenses, rent, and net operating income for the 1 Sweetwaters Coffee & Tea Cafe that: (i) has been operated by an affiliate for 5 years or more as of December 31, 2017; and (ii) reported its cost information to Sweetwaters using the chart of accounts Sweetwaters designated for use in connection with its System (the “Mature Affiliate Location”)
- 2017 total net sales, cost of sales, gross margin, total labor, other operating expenses, rent, and net operating income for the 1 Sweetwaters Coffee & Tea Cafe that: (i) has been operated by an affiliate; and (ii) is located within a non-traditional site, specifically, a library
Section I – Background Information
9 Things You Need to Know About the Sweetwaters Coffee & Tea Franchise
Opens First California Location
1. Over the summer of 2018, Sweetwaters Coffee & Tea opened its first location in California in downtown Walnut Creek. The new location quickly attracted local customers who are giving Sweetwaters good reviews on Yelp. According to Yelp reviewer Tehya B., “Great service and great coffee. I recommend the dreamy cold brew for work mornings and strawberry bliss if you’re craving something sweet. It’s a refreshing change. I’m here almost every morning.”
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Colin started as a team member at 21 and now owns 6 locations in Tampa Bay. Lisa came from marketing and built 21 in San Diego. The most successful multi-unit owners move early and secure markets with room to grow. Use our free tool to search multiple ZIP codes and find franchises where you can still stack locations, before someone else does. A franchise specialist will be in touch to present what's available.2. Like all Sweetwaters Coffee & Tea locations, the new Walnut Creek shop offers hot and cold beverages like caramel-coated vanilla lattes topped with whipped cream; dark roasted French chicory coffee with condensed milk; and ginger lemon and English breakfast teas. In addition to drinks, Sweetwaters offers muffins, scones, coffee cakes, sandwiches, salads, quiches, and an assortment of desserts.
Offering Menu Items That Reflect Founders’ Vietnamese Heritage
3. The founders of Sweetwaters Coffee & Tea, Wei and Lisa Bee, are both Vietnamese and the brand’s offerings reflect their cultural heritage. Sweetwaters uses ingredients and recipes typically found in Vietnam and other parts of Asia. Some of Sweetwaters’ signature coffee drinks include Dragon Eye, a blend of the House coffee and sweetened condensed milk, which is often used to sweeten Vietnamese drinks and desserts. Sweetwaters also offers a French Vietnamese Au Lait, which features dark roasted French chicory coffee and sweetened condensed milk.
4. Beyond Vietnamese flavors, Sweetwaters takes inspiration from other parts of Asia, including Thailand, India, China, and Japan. Sweetwaters offers a Thai Iced Tea, which is a blend of black tea, vanilla, and cinnamon poured over ice and topped with half and half. The tea menu also includes hot or iced Chai; Darjeeling grown in West Bengal, India; an Emerald Matcha Blend; Japanese Sencha; and Iron Goddess Oolong tea from China.
5. In addition to coffee and tea, Sweetwaters has a line of frozen drinks called Ice Dragons. Selections vary by store, but some of the brand’s signature Ice Dragon flavors include: Strawberry Bliss – made with real strawberries, yogurt, and vanilla cream; Caramel Dragon – featuring caramel, espresso, cream, and ice blended and topped with whipped cream; and the Lemonade and Strawberry Lemonade Freeze.
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When I owned a UPS Store, I learned firsthand how much your ZIP code shapes your outcome. I sold my store at a premium because my territory was in a high-value area. The best areas go first, and once they're gone, they're gone. Enter your ZIP code, and a territory specialist will walk you through the franchises still available near you, drawing on information that isn't publicly accessible, saving you months of wasted research.🔴Free Webinar: 6 Under-the-Radar Franchise Concepts That Serious Buyers Should Know
Every month we feature 6 standout franchises that could be the opportunity you've been looking for, each evaluated on disclosed financials and matched to the type of buyer most likely to succeed with it. Can't attend live on October 27 at 6PM EST? Register now and we'll send you the full recording the next day. Reserve your spot here.6. Sweetwaters also does shakes, such as the Napali Brew, which is inspired by Hawaii’s Napali Coast. This shake has vanilla ice cream blended with espresso, hazelnut syrup, and is topped with whipped cream.
Company History
7. Sweetwaters Coffee & Tea was founded in 1993 by Wei and Lisa Bee in Ann Arbor, Michigan. The couple were inspired by their love of food and drink and driven by their creativity to develop the Sweetwaters concept. The Bees created a coffeehouse that celebrates classic café fare alongside globally-influenced coffees and teas in an environment that is both classic and friendly, which reflects the Bees personalities.
8. The Bees started franchising Sweetwaters Coffee & Tea in 2004. Growth has been slow. Most of the brand’s locations are in its home state of Michigan, but there are now locations in California, Georgia, Ohio, and Tennessee. Sweetwaters Coffee & Tea continues to seek franchisees throughout the United States.
Entrepreneur’s Franchise 500
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When I owned a UPS Store, I learned firsthand how much your ZIP code shapes your outcome. I sold my store at a premium because my territory was in a high-value area. The best areas go first, and once they're gone, they're gone. Enter your ZIP code, and a territory specialist will walk you through the franchises still available near you, drawing on information that isn't publicly accessible, saving you months of wasted research.📈Dreaming of Multi‑Unit Success? Lock In Prime Territories Before They're Gone.
Colin started as a team member at 21 and now owns 6 locations in Tampa Bay. Lisa came from marketing and built 21 in San Diego. The most successful multi-unit owners move early and secure markets with room to grow. Use our free tool to search multiple ZIP codes and find franchises where you can still stack locations, before someone else does. A franchise specialist will be in touch to present what's available.9. Sweetwaters Coffee & Tea did not rank on Entrepreneur’s 2018 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Sweetwaters Coffee & Tea franchise costs, based on Item 7 of the company’s 2018 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Sweetwaters Coffee & Tea’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
Franchised
2015
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 3
- Net Change: 0
2016
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 4
- Net Change: +1
2017
- Outlets at the Start of the Year: 4
- Outlets at the End of the Year: 5
- Net Change: +1
Company-Owned
2015
- Outlets at the Start of the Year: 2
- Outlets at the End of the Year: 2
- Net Change: 0
2016
- Outlets at the Start of the Year: 2
- Outlets at the End of the Year: 3
- Net Change: +1
2017
- Outlets at the Start of the Year: 3
- Outlets at the End of the Year: 2
- Net Change: -1
Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis
- As of the end of Sweetwaters’ most recent fiscal year, it had 7 Cafes in operation. Of these 7 Cafes, 2 were affiliate-owned or operated and 5 were franchised as of December 31, 2017.
- This Item 19 presents data for the 5 Cafes (each, a “Representative Cafe”) that were open the entire 2017 calendar year (the “Measurement Period”).
- Sweetwaters excluded 2 Cafes from the definition of “Representative Cafes” because (i) 1 franchised Cafe was not in operation for the entire Measurement Period, and (ii) 1 affiliate-owned Cafe was sold to a franchisee during the Measurement Period.
- The Representative Cafes are operated in a substantially similar manner to the Franchised Business offered in the Disclosure Document.
- In the first chart below, Sweetwaters discloses the total Net Sales of the 5 Representative Cafes (over the Measurement Period).
- In the second chart, Sweetwaters discloses the total Net Sales, along with certain cost of sales and other operating cost information, for the 1 Representative Cafe that: (i) has been operated by an affiliate for 5 years or more as of December 31, 2017; and (ii) reported its cost information to Sweetwaters using the chart of accounts Sweetwaters designated for use in connection with its System (the “Mature Affiliate Location”).
- In the third chart, Sweetwaters discloses the total Net Sales, along with certain cost of sales and other operating cost information, for the 1 Representative Cafe that: (i) has been operated by an affiliate; and (ii) is located within a non-traditional site, specifically, a library.
- The financial performance representation presented in this Item 19 was prepared without an audit. No certified public accountant has audited these figures or expressed his/her opinion with regard to their contents or form for purposes of this Item.
- Some outlets have sold the amounts set forth in this Item. There is no assurance that you will do as well. Your individual results may differ.
Part 1 – Total Net Sales of the Representative Cafes
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