The Spice & Tea Exchange Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$195,000

-

$395,000

LOCATIONS

82

Emily

Updated

April 11, 2024

Is

The Spice & Tea Exchange

a franchise?

Yes,
The Spice & Tea Exchange
currently
accepts
franchise
applications

The Spice & Tea Exchange, founded in 2008, quickly embraced the franchising model the same year to spread its unique concept nationwide. With a mission centered around creating and sharing a more flavorful life, the company offers an extensive range of spices, teas, and culinary delights, inviting customers to explore global flavors.

Headquartered in the United States, The Spice & Tea Exchange has grown significantly, attributing its success to a combination of quality products and immersive customer experiences.

How many

The Spice & Tea Exchange

franchises

are there?

In 2022, there were
82
outlets in
the United
States, of which
81
are franchises, and
1
are corporate-owned.

What are the

The Spice & Tea Exchange

franchise

fees?

Advertising fee

1% to 3%

Initial Franchise Fee

The initial franchise fee is $38,750.00, fully earned when paid and due in a lump sum payment on the Agreement Date.

Royalty Fee

A royalty fee of 7% of the Store's monthly Gross Sales is required.

Site Relocation Fee

A relocation fee of $7,500 plus any expenses incurred is payable upon completion if a store relocation is approved.

Business Management Fee

Up to 10% of Gross Sales or $5,000 per month, whichever is greater, plus expenses, paid along with the Royalty on the Payment Date. This fee applies if the franchisor operates/manages the store due to breaches or the franchisee's inability to operate.

Transfer Fee

A fee of $10,000 is due at the time of store transfer approval.

Renewal/Successor Franchise Fee

A fee of $10,000 upon signing a successor Franchise Agreement, helping to defray certain costs incurred in reviewing and processing the renewal request.

Transferee Training Fee

A fee of $5,000 is payable upon the transfer of the Franchise Agreement, covering the costs of training the transferee.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

The Spice & Tea Exchange

franchise?

It costs between
$195,000
and
$395,000
to start a
The Spice & Tea Exchange
franchise.
Type of Expenditure Amount
Franchise Fee – Single Unit $38,750
Establishment Fee $95,000 - $125,000
Construction, Improvements and Other Dress-Out, Architect Fees $40,000 - $150,000
Grand Opening Advertising $5,000 - $5,000
Professional Fees $500 - $3,500
Utility Deposits $250 - $500
Office Equipment $350 - $2,500
Rent and Security Deposits $1,800 - $10,000
Insurance (Premium for First Year) $1,000 - $3,500
State and Local Business Licenses, Permits and Filing Fees $500 - $1,500
Training Expenses $1,500 - $5,000
Additional Funds - 6 Months $10,000 - $50,000
Total Estimated Initial Investment $194,650 - $395,250

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

The Spice & Tea Exchange

provide

training

to its

franchisees?

Yes,
The Spice & Tea Exchange
provides
training

The franchisor provides a structured initial training program for franchisees and their management personnel.

Initial Training Program

The Spice & Tea Exchange franchise provides an Initial Training Program that is conducted and/or supervised by experienced personnel in franchise retail training or in the spice and tea field. This program includes both classroom training and on-the-job training, with a comprehensive curriculum covering various aspects necessary for operating a franchise. The training is designed to prepare franchisees and their designated personnel for the opening and successful operation of their store.

Compliance with Local Laws

Some states and municipalities may require additional training before allowing a business to open. Franchisees are responsible for checking and complying with state and local laws applicable to their store, which may include separate training requirements.

On-Site Training

In addition to classroom training, The Spice & Tea Exchange provides on-site training from one or more members of the corporate team. This Opening Team assists with the store's opening, providing between 68 to 105 man-hours of support. The training covers practical, day-to-day operational aspects of running the store.

Periodic Training Courses

Franchisees and their managers are required to attend periodic training courses provided by The Spice & Tea Exchange. These courses are designed to keep franchisees updated on new procedures, products, and operational standards. There may be applicable fees for attending these courses.

Additional Training

If necessary, franchisees may be required to attend additional training courses or refresher training to ensure they remain compliant with The Spice & Tea Exchange's operational standards. This additional training may be at the franchisee's expense.

Does

The Spice & Tea Exchange

provides

territory

protection?

The Spice & Tea Exchange franchise grants franchisees a specific location, known as the "Site," which is located within a "Protected Area" inside a larger "Market Area." The minimum Protected Area generally encompasses a 1-mile radius from the center of the Site. However, in urban areas, the franchisor reserves the right to designate a smaller radius or a different method for measuring the Protected Area.

As long as the franchisee complies with the Franchise Agreement, the franchisor agrees not to grant another franchise for or operate a Store themselves from a fixed location within the franchisee's Protected Area. It's important to note that this type of territorial protection does not extend to the Market Area, and the franchisee's marketing activities are generally confined to within their Market Area.

However, the franchisor retains the right to use other distribution channels, such as the Internet, catalog sales, telemarketing, or other direct marketing, to make sales anywhere, even within the franchisee's Market Area or Protected Area, under trademarks different from those used under the Franchise Agreement.

Can a

The Spice & Tea Exchange

franchise

be run as

a passive

investment?

The Spice & Tea Exchange franchise requires active involvement from the franchisee in the franchise's operations. Specifically, the franchisee or one of the principal owners, if the franchisee is a corporation or partnership, must continuously exert their best efforts to promote and enhance the brand, system, and stores.

The store must be managed and staffed by employees who have been properly trained according to the franchise's operational standards. The franchise requires owners and employees to sign Confidentiality and Restrictive Agreements to protect its proprietary information and operational standards.

While the franchise agreement does not explicitly prohibit passive investments, it emphasizes the need for direct involvement in the management and operation of the store. This suggests that while there may be some room for passive investment, the franchise's success and adherence to brand standards rely significantly on the active participation of the franchisee or a principal owner in the day-to-day operations.

Related Posts