Franchise Business Lessons from the Shortcomings of Tea2Go

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Tea2Go has been recently put on the hot seat in CNBC’ The Profit. This company is owned and operated by tandem, Jeff Hunt and Taylor Logan. With borrowed money, they tried to expand using the franchise business model. However, instead of gain, their efforts gave them a $1 million debt. Why did the business fail? Expert Marcus Lemonis pointed out these valuable lessons.

You must have a proven concept prior to expansion.

The company has not yet established a proven system but the owners already borrowed $750,000 worth of money and tried to sell the idea for $30,000 upfront to new franchisees. A significant portion of the money was used to build stores instead of perfecting the business model, leaving them with no concrete concept to show to potential franchisees.

You need to give time to your franchisees.

The owners of Tea2Go failed to keep communication lines open with their franchisees, even requesting that they should not be bothered after business hours. Franchisees want assurance that they can count on the franchise for support since what they entrusted into the business is their hard-earned money. It requires dedication on your part as the franchise.

Bare minimum will not cut it.

Lemonis described the business as barren. It only sold teas and nothing else. There was no food that people could buy from the store. It was like people were expected to go right after buying their teas. Franchisees were not equipped to sell more than $3 per person which is not profitable for their business.

You should be passionate about the business.
The Tea2Go owners confessed that they were not tea drinkers, which could be the reason why they were not excited for their business to begin with. If you are going to sell a concept to someone else, people will easily notice if you truly believe in it or not and will be affected by your passion which could influence them to invest into your business.