2024 KFT Prospectus

America’s bubble tea 2024 Prospectus

Table of Contents.............................................................................Page 1 About Us............................................................................................Page 2 What is Bubble Tea.........................................................................Page 3 Our Core Menu.................................................................................Page 4 Become a Part of Our Team........................................................Page 5 Why Choose Kung Fu Tea............................................................Page 6 Marketing Initiatives.......................................................................Page 7 Our Awards.......................................................................................Page 8 Explore the Kung Fu Tea App.....................................................Page 9 An Overview....................................................................................Page 10 Traditional.........................................................................................Page 11 Traditional Cost Estimate............................................................Page 12 Traditional FAQ...............................................................................Page 13 Non-Traditional..............................................................................Page 14 Non-Traditional Cost Estimate...................................................Page 15 Non-Traditional FAQ.....................................................................Page 16 Mobile Truck.....................................................................................Page 17 Mobile Truck Cost Estimate.......................................................Page 18 KFT2GO............................................................................................Page 19 Become a Franchisee in Five Steps.......................................Page 20 Voices From Our Franchisees....................................................Page 21 Explore Our Dual Concepts.......................................................Page 22 TKK Fried Chicken Express........................................................Page 23 Yasubee............................................................................................Page 24 TablE of Contents 1

bubble tea WHAT IS

About Us Founded in Queens, New York, in 2010, Kung Fu Tea has grown to become America’s #1 Bubble Tea brand with over 400 locations. With the title of America’s Bubble Tea - our mission is to continue to spread our love of boba to all around the globe. Driven by the spirit of Kung Fu - we always seek to innovate and improve our brand through the relentless pursuit of constant improve. This philosophy has led us to become boba pioneers, leading the industry in our high-quality ingredients, innovative products, nimble supply chain, and excellent customer service our Kung Fu Masters deliver every day. We are so passionate about Bubble Tea we made it into a Holiday. Every April 30th, on our company’s birthday, the world now celebrates ‘National Bubble Tea Day.’ As the originators of this holiday, we’ve humbled to see the day celebrated not just by the Kung Fu Tea faithful - but now celebrated by all Bubble Tea shops and chains across the world.

Bubble tea (also known as pearl milk tea, boba milk tea, or simply boba) is a Taiwanese drink that originated in Taichung in the 1980s. Typically made from a tea base mixed with milk or fruit, bubble tea is most recognized for its topping - sweet, chewy tapioca balls that give the drink an extra element not found in any other type of drink in the world. By the late 90s, Taiwanese immigrants introduced bubble tea to the United States, starting in Chinatowns and moving to more suburban environments soon afterward. As the US continues to see a strong influence and interest from Asian Entertainment (Anime, Gaming, K-Pop, and much more) - Bubble Tea has continued to land into more customers’ hands from a variety of age ranges and demographics.

Bubble tea is also known as pearl milk tea or boba milk tea. It is a Taiwanese tea-based drink invented in Taichung, Taiwan during the 1980s. Most bubble tea recipes contain a tea base mixed with fruit or milk and the boba ‘bubbles’ to add a chewy contrast to the sweetness and texture of the drink. With such a wide variety of ingredients and flavors, customers can discover a new flavor every time they visit or simply enjoy their favorites again and again.

THE FINEST TEA, FROM TAIWAN

Kung Fu Tea starts with handpicked tea leaves from high in the mountains of Taiwan, delivering a taste and experience unique to this oriental island. AMERIICA’’S BUBBLE TEA

KUNG FU TEA CORE MENU

BECOME PART OF our team

At Kung Fu Tea, customers can choose from our classic teas, fruit-forward punches, iconic milk teas, and more. All drinks are customizable, with customers able to select their sugar level, and ice level, and pick their topping of choice. Our toppings range from classic boba to jellies, and our creamy whipped milk cap. We aim to provide our customers with a variety of different types of drinks.

Kung Fu Tea, based in New York, has over 390 locations across the United States, Taiwan, Australia, Canada, and Cambodia. The key to our growth, beyond superior flavors and ingredients, has been our entrepreneurial spirit. We believe that our best days are ahead of us and are always looking for creative and driven partners to join our dynamic and energetic team. We at Kung Fu Tea place great value in our franchisee partners, listening to and learning from their new and fresh perspectives. Our franchisees know that they have the full support of our team’s years of experience and expertise in all aspects of the business. Their success is our priority.

WHY CHOOSE Kung Fu Tea

MARKETING INITIATIVES

FEARLESS BRAND

FRESH INGREDIENTS

GET INTO THE

THIS HALLOWEEN

Our company has led the industry for over a decade and has partnered with iconic brands across the Food, Entertainment, Gaming, and more to cement its position in all things Boba & Pop Culture.

We carefully seek out and use top- quality ingredients for all of our products. Imported directly from Taiwan, every KFT handcrafted drink is full of the authentic taste.

YOURS TO OWN

ON DIGITAL, DVD AND BLU-RAY TM

INNOVATIVE FLAVORS

EXTENSIVE TRAINING Every store-owner and employee undergoes rigorous training to gain the skills and knowledge to manage the business and provide top-notch customer service and drinks to our customers.

We’re now in

! visit us in-game

SCAN For more Minions!

to catch our exclusive deals

Comic Mischief Fantasy Violence

Play Today!

We’re constantly experimenting with fresh new flavors that resonate with the American palate. From traditional milk teas you’ll find in Taiwan to flavors that are more ‘American-foward’ - we’re constantly providing fresh flavors for our customers of all demographics to discover and love.

Ladybug’s Spots On Lemonade

FRANCHISEE SUPPORT

Nintendo trademarks are properties of Nintendo.

We provide complete 360 support for our Operators, with centralized Performance, Operations, Marketing, Accounting, and R&D departments to provide support so you can focus on your business.

Kung Fu Tea has partnered with iconics brands such as Nintendo, Universal Studios, Dreamworks Animation, PokémonGo, Spirit Halloween and more to bring limited time offerings and programs to life for our customers. Our partnerships offer a unique way to celebrate with our fans across both brands, and introduce entirely new groups of people into the world of boba. Our programs offer unique flavors, packaging, and more as we continue to bring these amazing partnerships to life.

KUNG FU TEA our awards

EXPLORE THE kung fu tea App

#3 Most Loved Brand of 2023

Newsweek 1000 Excellence Index, 2024

Top 500 Chains 2021, 2022 & 2023

REWARDS: More boba = more rewards. Earn App Bubbles on every purchase, and use them to redeem for a variety of prizes in our Rewards Store. EXCLUSIVE DEALS: Be the first to know about upcoming programs and enjoy exclusive app promos monthly!

Our Kung Fu Tea App has had over 2 million downloads since its inception, and is one of the cornerstones to our Kung Fu Tea Family. Through it, we offer a robust loyalty program, exclusive promotions, and foster our tight knit community of boba-fanatics. ORDER AHEAD: Need a quick boba fix? Skip the lines. Skip the wait. Order ahead for in-store pick-up or delivery.

Fastest Growing Food & Beverage Companies in America 2018-2023

Fastest Growing Franchises 2023 & 2024

Franchise 500 2023 2024

11 8

an overview

traditional

Traditional formats provide the most classic version of the Kung Fu Tea experience for your customers. Featuring space for customers to sit and enjoy their drinks, Kung Fu Tea becomes the destination for family and friends. Our traditional footprint also features large branding opportunities and larger footprint for better staff workflow.

TRADITIONAL

NON-TRADITIONAL

FOOD TRUCK

SELF ORDER KIOSK

DRIVE-THRU

TRADITIONAL

cost estimate

faq

1. What is the cost of opening a Kung Fu Tea store? • The initial investment for a new Kung Fu Tea will range depending primarily on the size, configuration, and rent of the desired location. We can provide more accurate estimates once we confirm those details. 2. How long does it take for an application to be approved? • Once the application is received, it may take up to 10 business days for our Sales Department to review the application. Application accompanied by a location and business plan may be expedited (the location must be approved for tea beverages or cafe business by the landlord or property management company.) 3. If we do not have a location, will you get one for us? • Although a location is not guaranteed, we may connect you with our R/E Development service. 4. How long will it take to open a store? • After a store location is secured and a building permit is issued, the construction normally takes 8-12 weeks. 5. Can I purchase or build multiple locations? • Yes. We encourage potential franchisees to own and operate multiple locations. In addition, we offer an Area Development Franchise Opportunity. 6. Do we have to buy all supplies from you? • Supplies are purchased from approved vendors. This ensures that all Kung Fu Tea stores have the best quality while allowing maximum savings and ensuring consistency across all locations. 7. How much income will the store generate? How long is the ROI? • In accordance with the franchise law, we are unable to provide this information or any kind of assumption on this matter. 8. After my location is up and running, what kind of support will I receive? • Our Training Team is in place to provide you with ongoing support, to include regular visits from Regional Operations Corporate Managers, as well ongoing training opportunities form continued development. 9. I have a perfect location in mind and there are no Kung Fu Tea shops nearby. Yet, the state and/or market do not seem to be available for development. Why not? • There are a number of reasons why an apparent “perfect site” remains undeveloped or is not available. It is not unusual for a given area to be reserved by an existing franchisee that is expanding to the area in the near future. Some areas may appear suitable for expansion and/or development, but our strategies or business conditions may limit our desire to expand into the area. 10. Does Kung Fu Tea offer financing? • We do not offer financial assistance, however, we are SBA loan approved.

TOTAL INITIAL CAPITAL

Traditional Store

$140,00 to $422,000

RECOMMENDED STORE SPACE

Size:

500 to 1,500 square feet

UP-FRONT FEES

Franchise Fee (Traditional store):

$37,000

Training Fee:

$12,500

CONTINUOUS FEES

Marketing Fee:

2% of gross per month

Royalty Fee:

4% of gross per month

ADDITIONAL FEES

Equipment Costs:

$25,000 to $35,000 depending on the size of your space. Varies depending on the size and Configuration of the space.

Renovation Costs:

NON-TRADITIONAL cost estimate

non-traditional

Non-Traditional formats provide the Kung Fu Tea experience is less common formats, including mall kiosks, food court booths, airport locations, and more. These opportunities serve a more ‘grab and go’ customer who may be running errands or going about their day.

TOTAL INITIAL CAPITAL

Non-traditional Store

$123,00 to $275,000

RECOMMENDED STORE SPACE

Size:

500 to 1,500 square feet

UP-FRONT FEES

Franchise Fee (Non-traditional store): Upon Request

Training Fee:

$12,500

CONTINUOUS FEES

Marketing Fee:

2% of gross per month

Royalty Fee:

4% of gross per month

ADDITIONAL FEES

Equipment Costs:

$25,000 to $35,000 depending on the size of your space. Varies depending on the size and Configuration of the space.

Renovation Costs:

NON-TRADITIONAL

MOBILE FOOD TRUCK Kung Fu Tea

faq

1. What is a non-traditional store? •Non-traditional stores are flexible concepts for unique venues: • Airports • Hospitals and Healthcare Facilities • Big Box Retail Stores • Supermarkets • College and Universities 2. How long does it take to open a non-traditional store? • It can take up to 12 weeks or more. The estimated timeframe can vary depending if the location is secured, building permit issued and finding a general contractor. 3. Does the investment level differ for non-traditional locations? • Non-traditional locations (or Alternative Points of Distribution) are typically located within another host establishment and come in many shapes and size depending on the host. Estimated cost ranges for initial investment vary with the venue and the host, and requests for non-traditional locations are reviewed on a case-by-case basis. 4. What is the initial franchisee fee? • Available Upon Request 5. What is the recommended store size? • 500 sq.ft. to 1500 sq. ft. 6. How much is the training fee? • $12,500 7. Can I purchase or build multiple locations? • Yes. We encourage potential franchisees to own and operate multiple locations. In addition, we offer an Area Development Franchise Opportunity. 8. Do we have to buy all supplies from you? • Supplies are purchased from approved vendors. This ensures that all Kung Fu Tea stores have the best quality while allowing maximum savings and ensuring consistency across all locations. 9. How much income will the store generate? How long is the ROI? • In accordance with the franchise law, we are unable to provide this information or any kind of assumption on this matter. 10. After my location is up and running, what kind of support will I receive? • Our Training Team is in place to provide you with ongoing support, to include regular visits from Regional Operations Corporate Managers, as well ongoing training opportunities form continued development. 11. Does Kung Fu Tea offer financing? • We do not offer financial assistance, however, we are SBA loan approved. • Stadiums and Arenas • Theme Parks • Train and Bus Stations • Turnpike Service Plazas • Casinos

Mobile Food Trucks are a growing format, and are a great way to meet the customer at new events, conferences, and more. With a more limited menu, our KFT Mobile Food Trucks focus on the Kung Fu Tea classics guaranteed to generate demand. With the mobility of a food truck, this format is great for locations around major cities/event locations.

MOBILE TRUCK COST ESTIMATE

Kung Fu Tea is building out an active food strategy to complement our delicious refreshing drinks. Between packaged grab and go popcorn, to fresh made croffles and more - our Operators will have the ability to add various items to their store offerings to increase average ticket value. kft2go

INITIAL INVESTMENT CAPITAL

Truck model and size variants:

CROFFLES

DRAGON POP!

$123,00 to $275,000

Franchise Fee:

$25,000

Training Fee:

$12,500

Royalty Fee:

4% of gross per month

Marketing Fee:

2% of gross per month

Equipment Cost:

$25,000 to $35,000 depending on the size of your truck

TEA CANS

SHIO RAMEN (COMING SOON)

ONIGIRI (COMING SOON)

VOICES FROM our franchisees

BECOME A FRANCHISEE IN five steps

I decided to sign the contract when another franchisee told me, “You won’t regret it.”

I was walking down the streets of Flushing, Queens when I saw everybody holding a cup of Kung Fu Tea. I never liked bubble tea before, so it intrigued me. I gave the store a visit, ordered a WOW Milk, and it definitely wowed me. Fast forward, I now own 5 Kung Fu Tea locations. The product speaks for everything!

Fill out the inquiry form.

— Janice L., VA Owner of 3 stores

Schedule an interview & receive Franchise Disclosure Document.

My fiancée and I grew up loving bubble tea. We tried many places/brands, especially on the West Coast. When we finally had the Kung Fu Milk Tea in New York, we were sold! We decided to open one in Southern California and make it look like a flagship store. We followed the design guideline and really devoted so much effort to decorating the store. I remember being so excited when customers first walked into our store and were left with amazed faces. They were definitely blown away not only by our tasty tea, but also by our taste in design. Our store image was also featured on the Kung Fu Tea website, which helped us get more exposure.

Sign franchise & lease agreements

— Dean C., TX Owner of 5 stores

Store buildout & KFT Academy Training Program begins.

The Kung Fu Tea team assisted us throughout the planning and opening of my first store, and it surprised me how much help and advice we were able to get from other franchisees as well.

5 Grand Opening! But this is just the

beginning of your Kung Fu Tea journey.

— Paul Z., Atlanta, GA Owner of 3 stores

WELCOME TO THE FAMILY!

— Kelvin H., CA Storeowner

EXPLORE OUR dual concepts

Founded in 1974 by Shih Kwei-ting, TKK is a Taiwanese chain of fried chicken restaurants that has been around for 50 years. Since first breaking soil in America in 2018, TKK has shared it‘s love of Taiwanese Fried Chicken far and wide. With over 25 locations in the US, click to read more how you join this thriving franchisee network.

For over 70 years Yasubee has been sharing the Secrets of Deliciousness by providing top notch Tsukemen and Ramen in over 80 locations in Japan. With handmade fresh noodles and a delicious savory broth, Yasubee has become a symbol for quality, deliciousness noodles with all who enjoy ramen. With our first two locations in NYC Yasubee already established, we‘re excited to embark on this new journey - bringing the Secrets of Deliciousness to the American Palate.

© 2018 KUNG FU TEA. ALL RIGHTS RESERVED. 589 8TH AVE 15TH FLOOR NEW YORK NY 10018 www.kungfutea.com/franchise Email: sales@kungfuteausa.com Tel: 855 (538) 9888 Ext. 1101 © 2024 KUNG FU TEA. ALL RIGHTS RESERVED. www.kungfutea.com 589 8TH AVE 17TH FL NEW YORK NY 10018 Tel: 855 KFT (538) 9888 Email: info@kfteausa.com

KUNG FU TEA @KUNGFUTEAUSA @KFTEAUSA @KUNGFUTEAUSA @KUNGFUTEA

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