Chi Tea Franchise
Cost, fees, owner earnings, closure rate and litigation for a Chi Tea franchise — pulled from the franchisor's own public FDD (2026), not its sales material.
Disclosure honesty
Chi Tea discloses earnings (Item 19) — but the grade is how honestly. We graded it C.
What their own earnings claim actually says
Based on 3 affiliate-operated restaurants (Jan-Dec 2025). Average annual gross sales $1,351,860. Range $950,200-$1,988,989. Unaudited. Affiliate locations exempt from franchise fees.
What a Chi Tea franchise actually costs to run
| Fee | Disclosed | Where it comes from |
|---|---|---|
| Initial franchise fee | $40,000 | Item 5 — paid up front, before you open |
| Royalty | 5% of gross sales | Item 6 — charged on revenue, not profit |
| Advertising fund | 1% of gross sales | Item 6 — brand marketing, spent at the franchisor's discretion |
| Total recurring fees | 6% of gross sales | Before rent, labor, food or debt service |
| Total initial investment | $230,542 – $478,667 | Item 7 — franchisor's own low/high estimate |
Royalty 5% gross sales, ad fund 1% gross sales, 4% local marketing required, $500/mo software, $6,000 grand opening.
Royalty and ad-fund percentages are charged on gross sales — an owner pays them whether or not the location is profitable.
Chi Tea system size and owner turnover
| Total outlets | 6 |
| Ceased operations | 0 |
| Terminated by franchisor | 0 |
| Transferred to new owners | 0 |
| Closure rate | 0.0% of outlets |
No franchised outlets exist; zero franchise agreements signed; company-owned only.
From Item 20 of the FDD 2026. Terminations and ceased operations are the franchisor's own count of owners who stopped — the number the sales pitch leaves out.
Is Chi Tea worth it? — how it compares to 164 similar franchises
| Ongoing fees | 6% of sales | lower than most (median 8%) |
| Startup cost | from $230,542 | cheaper than most (median $481,500) |
| Disclosure honesty | Grade C | typical for the category |
| Closure rate | 0.0% of outlets | better than most (median 1.3%) |
| Disclosed lawsuits | 0 | fewer than most |
Benchmarked against every quick service restaurants franchise we've graded from public FDDs — the context the franchisor's pitch never gives you.
Owner take-home for a Chi Tea
The franchisor's framing: Based on 3 affiliate-operated restaurants (Jan-Dec 2025). Average annual gross sales $1,35… We reconstruct what an owner actually keeps, from their own FDD.
- Reconstructed owner P&L — net take-home after royalty, ad fund, rent, labor & debt
- Break-even timeline + cash-on-cash ROI
- Full fee stack + required-purchase markups
- Decoded real failure / closure rate
- How it ranks vs comparable franchises
- Validation-call playbook — the exact questions to ask
See a full sample report → · 30-day guarantee
Chi Tea franchise — frequently asked
- How much does a Chi Tea franchise cost?
- The FDD lists a total initial investment of about $230,542–$478,667, including a $40,000 initial franchise fee.
- How much do Chi Tea franchise owners make?
- Based on 3 affiliate-operated restaurants (Jan-Dec 2025). Average annual gross sales $1,351,860. Range $950,200-$1,988,989. Unaudited. Affiliate locations exempt from franchise fees. We grade this disclosure C for honesty.
- What are the Chi Tea franchise fees?
- Chi Tea's FDD discloses a $40,000 initial franchise fee, a 5% royalty on gross sales, a 1% advertising-fund contribution, for roughly 6% of gross sales in recurring fees before rent, labor, or debt service. Royalty 5% gross sales, ad fund 1% gross sales, 4% local marketing required, $500/mo software, $6,000 grand opening.
- What is the Chi Tea franchise profit margin?
- Chi Tea does not publish a franchisee net-profit margin — almost no franchisor does. What Item 19 actually shows: Based on 3 affiliate-operated restaurants (Jan-Dec 2025). Average annual gross sales $1,351,860. Range $950,200-$1,988,989. Unaudited. Affiliate locations exempt from franchise fees. Recurring fees alone take about 6% of gross sales, before rent, labor, food or debt service. Margin has to be reconstructed from the disclosure, not read off it.
- What is the Chi Tea franchise failure rate?
- No franchised outlets exist; zero franchise agreements signed; company-owned only.
- How many Chi Tea locations are there?
- Chi Tea's FDD reports 6 total outlets, with 0 that ceased operations in the most recent reporting year and 0 transferred to new owners. Item 20 is where system health shows up before the marketing does.
- Does Chi Tea have complaints or lawsuits?
- Chi Tea discloses no material litigation in Item 3 of the filing we reviewed. That's a positive signal, though it covers only what the franchisor is required to report.
- Is a Chi Tea franchise worth it?
- It depends on the numbers, not the pitch. Chi Tea scores C on disclosure honesty, carries about 6% of sales in ongoing fees. Get the real owner take-home before you sign.
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Compare Chi Tea to similar franchises
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Source: WI DFI Franchise Registration (2026). FranchiseValidate is independent and not affiliated with Chi Tea or its franchisor. Figures are extracted from the franchisor's own public disclosure document; verify against the current FDD before any decision.