Risk Score
Pending analysis
Investment Range
$298,000 - $586,500
Franchise Fee
$30,000
Total US Locations
115
Business Summary
Happy Lemon operates retail stores that specialize in selling a variety of tea beverages. Their menu includes teas with fresh fruits, milk, salted cheese, boba, and other unique specialty items, along with complementary food and drink options.
Corporate History
Yummy-town USA LLC, which franchises Happy Lemon stores, was formed in Delaware on August 30, 2017. Through its subsidiaries and affiliates, Happy Lemon has owned and operated Happy Lemon stores in the United States since 2017. Happy Lemon began offering franchises in the United States in 2018. The company is part of a larger global enterprise, with its ultimate parent company, Yummy Town (Cayman) Holdings Corporation, publicly traded on the Taipei Exchanges since 2014.
Financial Overview
Investment Range
$298,000 - $586,500
Franchise Fee (Low)
$30,000
Franchise Fee (High)
$30,000
Royalty %
7%
Equipment Costs (Low)
$140,000
Equipment Costs (High)
$315,000
Working Capital
$50,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Happy Lemon experienced a net loss of $102,879 in 2024, a notable decrease from its net income of $635,309 in 2023. Happy Lemon's operating income also changed from a profit of $788,083 in 2023 to an operating loss of $397,628 in 2024. Additionally, the company's current liabilities significantly increased from $1,248,882 in 2023 to $3,179,610 in 2024, leading to a decrease in working capital.
Financing Details
Happy Lemon does not currently offer any direct or indirect financing to its franchisees. Additionally, Happy Lemon does not guarantee any franchisee's notes, leases, or other financial obligations.
Performance Metrics
Total US Locations
115
Franchised Units
106
Corporate Units
9
Avg Square Footage
1,050
Franchising Since
2018
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
2
Litigation Summary
Happy Lemon had two governmental actions in April 2021, which is outside the three-year look-back period from the FDD issuance date of March 17, 2025. One case involved Yummy-town USA, LLC, where the Commissioner of the California Department of Financial Protection and Innovation alleged that Happy Lemon failed to disclose certain former California franchisees of its affiliate. Happy Lemon USA entered into a consent order, paid $7,500 in administrative penalties, and its personnel were required to attend remedial education. The other case involved Happy Lemon HK, Limited, an affiliate, with allegations of offering and selling franchises in California without proper registration. Happy Lemon HK also entered into a consent order, paid $13,000 in administrative penalties, and its personnel were required to attend remedial education. There is no other litigation to report.
Bankruptcy History
Happy Lemon has no bankruptcy history to report.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
To renew a Happy Lemon franchise, franchisees must be in full compliance with their agreements, including passing all inspections and audits. They must update their store, equipment, and operating assets to meet current Happy Lemon standards. Franchisees need to demonstrate their right to possess the store premises for the entire renewal term and meet current qualification and training requirements. They must provide written notice of their intent to renew between 180 and 365 days before the initial term expires, pay all outstanding amounts due, and sign a general release. A renewal fee of $30,000 is also required, and franchisees must sign Happy Lemon's then-current franchise agreement, which may have different terms and conditions.
Training & Support Program
Franchisor Assistance
Happy Lemon provides various services to its franchisees. Before opening, this includes assistance with identifying a suitable store location, providing written acceptance of the proposed site, and conducting an initial training program. Happy Lemon also provides a list of approved suppliers for required products, equipment, and signs, as well as a generic interior layout. The franchisor helps by reviewing the store's floor plan, suggesting adjustments, and providing 3D renderings for design concepts. During operation, Happy Lemon offers general guidance, a copy of its operations manual, and reviews proposed advertising. It also assists with marketing services, such as social media management, promotional posters, and menu updates. Happy Lemon performs routine performance audits to ensure quality standards, provides additional training on its proprietary management software, offers inventory integrity management and logistic services, and provides 3D renderings for store updates.
Initial Training Hours
143
Training Location
Franchisor training facility in the United States, online, or on-site at the franchisee's store.
Ongoing Support
After opening, Happy Lemon franchisees receive ongoing general guidance through various methods, such as electronically, in writing, or telephonically, as deemed appropriate by Happy Lemon. Franchisees are loaned a copy of Happy Lemon's operational manual and can receive consent or denial for proposed advertising materials and new products/services/suppliers. Happy Lemon assists with marketing services, including social media management, promotional poster provision, and updating store menus and TV media. They conduct routine performance audits to ensure quality standards and provide additional training on their proprietary management software, covering topics like daily reports, online inventory orders, POS management, and reward points. Happy Lemon also offers inventory integrity management and logistic services, and provides 3D renderings for store design concept deviations related to store updates and refreshes.
Franchise Requirements
Ideal Candidate Profile
Happy Lemon seeks a hands-on Designated Owner who will personally participate in and supervise the direct operation of their franchise business. This individual must maintain an equity interest in the Happy Lemon franchise and ensure that at least two Store Managers are in place to oversee operations. Each Designated Owner and Store Manager must successfully complete Happy Lemon's initial training program. While no specific prior industry, management, sales, or technical experience is explicitly required, candidates are expected to be committed to the Happy Lemon system and fulfill all operational obligations.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Hands-On
Territory Type
Non-Exclusive
Territory Size Requirements
Happy Lemon grants the right to operate a store at a specific, approved street address, which is identified on Schedule A of the Franchise Agreement. Happy Lemon does not provide franchisees with an exclusive, protected, or reserved territory, meaning franchisees may face competition from other Happy Lemon franchisees, company-owned outlets, or other distribution channels controlled by Happy Lemon or its affiliates.
Staffing Notes
Happy Lemon requires that the Designated Owner of the franchise, or the franchisee themselves, is responsible for supervising the business and personally participating in its direct operation. Franchisees must have at least two Store Managers to manage and supervise the Happy Lemon store, and the Designated Owner may also serve as one of these managers. The Designated Owner and all Store Managers must successfully complete the initial training program. Franchisees are responsible for training all other store staff and ensuring at least one employee with a food handler certification is present during all operating hours. Happy Lemon emphasizes that the franchisee is solely responsible for all employee-related matters, including wages, benefits, scheduling, duties, supervision, work rules, hiring, discharge, and working conditions, without any direct or indirect control or authority from Happy Lemon.