Sweetwaters Coffee & Tea Franchise FDD, Profits & Costs (2025)
Sweetwaters Coffee & Tea is a café franchise that first opened its doors in 1993, created by founders Lisa and Wei Bee in downtown Ann Arbor, Michigan, just steps from the University of Michigan. Today, the company operates from its headquarters at 123 W. Washington Street in Ann Arbor and has grown steadily since it began franchising in 2004, now boasting nearly 40 shops across 12 states.
The brand specializes in a diverse menu of globally influenced drinks and light meals. Among its signature offerings are the Dragon Eye coffee, French Vietnamese Au Lait, Thai Iced Tea, and refreshing Ginger Lemon Iced Tea.
Sweetwaters places a strong emphasis on quality, crafting beverages with real ingredients such as authentic Japanese matcha, freshly brewed cold brew, and house-made whipped cream. Alongside drinks, customers can enjoy a selection of pastries, desserts, and made-to-order breakfast and lunch items.
What makes Sweetwaters unique is its community-driven approach and cultural authenticity. Each café highlights local artwork and often serves as a hub for neighborhood events, fostering a welcoming environment that reflects both global inspiration and local spirit.
Initial Investment
How much does it cost to start a Sweetwaters Coffee & Tea franchise? It costs on average between $473,000 – $765,000 to start a Sweetwaters Coffee & Tea franchised shop.
This investment covers expenses such as build-out, equipment, initial inventory, and early operating costs. The total required amount can vary depending on several factors, including the size and format of the café, the market location, and whether the franchisee decides to lease or buy the property.
| Type of Expenditure | Amount |
|---|---|
| Initial Franchise Fee | $39,500 – $39,500 |
| Grand Opening Advertising | $10,000 – $10,000 |
| Initial Training Fee | $7,000 – $7,000 |
| Initial Training Expenses | $0 – $3,639 |
| Pre-Construction | $6,750 – $7,150 |
| Permits | $1,200 – $6,000 |
| Leasehold Improvements | $185,214 – $298,647 |
| Exterior Signage | $6,259 – $18,288 |
| Utility Deposits | $0 – $300 |
| Fixtures and Equipment | $147,715 – $270,474 |
| POS System (including license fee) | $2,546 – $4,249 |
| Organizational Costs | $500 – $1,500 |
| Opening Inventory and Supplies | $24,305 – $24,305 |
| Construction Management | $0 – $10,000 |
| Insurance (3 months) | $1,383 – $2,607 |
| Real Estate Costs (3 months rent + deposit) | $10,920 – $21,320 |
| Additional Funds (3 months) | $30,000 – $40,000 |
| TOTAL | $473,292 – $764,979 |
Average Revenue (AUV)
How much revenue can you make with a Sweetwaters Coffee & Tea franchise? A Sweetwaters Coffee & Tea franchised restaurant makes on average $599,000 in revenue (AUV) per year.
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Frequently Asked Questions
How many Sweetwaters Coffee & Tea locations are there?
As of the latest data, Sweetwaters Coffee & Tea operates a total of 38 locations. Out of these, 34 are franchise-owned, while 4 are company-owned.
What is the total investment required to open a Sweetwaters Coffee & Tea franchise?
The total investment required to open a Sweetwaters Coffee & Tea franchise ranges from $473,000 to $765,000.
What are the ongoing fees for a Sweetwaters Coffee & Tea franchise?
Sweetwaters Coffee & Tea franchisees are required to pay a royalty fee of 6% of gross sales. In addition, there is a brand fund contribution of 3%, along with a requirement to spend 2% of sales on local advertising efforts.
What are the financial requirements to become a Sweetwaters Coffee & Tea franchisee?
Prospective franchisees of Sweetwaters Coffee & Tea are expected to demonstrate a minimum net worth of approximately $500,000, along with liquid capital in the range of $120,000 to $150,000, depending on the source.
How much can a Sweetwaters Coffee & Tea franchise owner expect to earn?
The average gross sales for a Sweetwaters Coffee & Tea franchise are approximately $0.6 million per location. Assuming a 15% operating profit margin, $0.6 million yearly revenue can result in $90,000 EBITDA annually.
Who owns Sweetwaters Coffee & Tea?
The Sweetwaters Coffee & Tea franchise is owned by Wei and Lisa Bee, the husband-and-wife team who founded the brand in 1993 in Ann Arbor, Michigan.
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