Risk Score
Pending analysis
Investment Range
$532,300 - $951,200
Franchise Fee
$30,000
Business Summary
Milksha is a food service establishment that offers tea, milk, and coffee beverages, along with iced desserts, bakery desserts, and other types of desserts, beverages, products, and accessories under the Milksha brand name and marks.
Corporate History
Milkshop Japan Inc., the franchisor for Milksha, was formed as a company limited by shares in Japan in June 2024 and began offering franchises in the United States at that time. Its direct parent, Milkshop International Co., Ltd (Milkshop Taiwan), has been offering Milksha tea shop franchises in Taiwan since 2012 and using the 'Milksha' name for franchising tea shops since 2018. As of December 31, 2023, there were 436 franchised Milksha Tea Shops operating outside of the U.S. Milkshop Taiwan is majority-owned by Jollibee Worldwide Pte. Ltd., which is in turn wholly-owned by Jollibee Foods Corporation. Other affiliated entities under Jollibee Corporation offer franchises for brands like Jollibee, The Coffee Bean & Tea Leaf, and Smashburger internationally and in the U.S.
Financial Overview
Investment Range
$532,300 - $951,200
Franchise Fee (Low)
$30,000
Franchise Fee (High)
$30,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$317,800
Equipment Costs (High)
$615,200
Working Capital
$35,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Qualified opinion
Financial Health Notes
The financial statements for Milkshop International Co., Ltd. and its subsidiaries (the Group) have received a qualified opinion from their independent auditors. This qualification is specifically due to the financial statements of the subsidiary, Milkshop Japan Co., Ltd. (the franchisor), not being audited by independent auditors. Otherwise, the consolidated financial statements present fairly the financial position of the Group.
Financing Details
Milksha does not offer any direct or indirect financing to its franchisees. Additionally, Milksha does not guarantee any promissory notes, mortgages, leases, or other financial obligations for its franchisees.
Performance Metrics
Total US Locations
0
Franchised Units
0
Corporate Units
0
Avg Square Footage
1,125
Franchising Since
2024
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Milksha has no litigation history to report. The FDD states that no litigation is required to be disclosed in Item 3.
Bankruptcy History
Milksha has no bankruptcy history to report. The FDD states that no bankruptcy information is required to be disclosed in Item 4.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
To renew their Milksha franchise, franchisees must notify Milksha in writing between 180 and 270 days before their current agreement expires. They must have substantially complied with the franchise agreement during its term and be in full compliance with all System Standards at the time of notice and renewal. Franchisees are required to maintain possession of their location and agree to remodel or expand it, add or replace improvements and operating assets, and modify their Tea Shop to meet Milksha's then-current System Standards for new locations. Alternatively, they can secure an approved substitute location and develop it according to current System Standards. Franchisees must also pay a renewal fee equal to 50% of the then-current initial franchise fee and sign Milksha's then-current franchise agreement and related documents, which may have different terms, including changes to royalties and marketing contributions. Finally, franchisees and their owners must sign a general release of claims against Milksha and its affiliates.
Training & Support Program
Franchisor Assistance
Before a Milksha Tea Shop opens, Milksha or its designees provide initial training to mandatory trainees and make the operations manual available. Milksha reviews and approves the proposed site, the lease agreement, and the architectural plans and design schematics. For a franchisee's first Milksha Tea Shop, Milksha provides two consultants for up to 15 days for brand specifications and menu development, and two consultants for up to 22 days for general business and operations assistance. Milksha also provides written approval for the Tea Shop to open. During operation, Milksha offers periodic advice, continuous access to the manual, licenses the use of its trademarks, and administers the marketing fund. Milksha may also set maximum or minimum prices for products and services and require compliance with advertising policies.
Initial Training Hours
176
Training Location
Virtual & Training Facility in China
Ongoing Support
After opening, Milksha provides periodic advice on Tea Shop operations, subject to scheduling and availability. Franchisees continue to have access to the Milksha operations manual. Milksha may also require franchisees and their principal operators to attend various training courses, which may be provided by third parties, and attend an annual meeting for franchise owners, which may be virtual. If additional or special guidance, assistance, or training is requested, Milksha may charge a fee plus expenses. Milksha reserves the right to conduct support, inspections, and training virtually if deemed unsafe to do in-person or for any other reason.
Franchise Requirements
Ideal Candidate Profile
Milksha Japan Inc. is looking for individuals or entities who are willing to commit the necessary investment and effort to operate a Milksha Tea Shop. If the franchisee is an entity, a Managing Owner, who is a natural person with at least 25% ownership and voting power, must be appointed. This Managing Owner should have the authority of a chief executive officer, be authorized to make binding decisions, and commit to supervising the Milksha Tea Shop's management and operations with continuous best efforts. If the Managing Owner is not full-time, they must appoint full-time Principal Operators who have completed the franchisor's training. For those interested in area development, relevant experience is considered. All franchisees and their owners must also refrain from having any interest in or performing services for a competitive business during the franchise term.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
protected
Staffing Notes
Milksha states that franchisees are solely responsible for the management, direction, and control of their Tea Shop, including decisions related to hiring, firing, training, compensation, work hours, and assignments for employees, agents, and independent contractors. The Managing Owner must supervise the management and operation of the Tea Shop. However, the Managing Owner may choose not to supervise full-time if one or more Principal Operators, who have completed Milksha's initial training program, are appointed to work full-time supervising daily operations. Milksha may require certain personnel with access to confidential information to sign non-disclosure agreements.