About The Alley Franchise
The Alley is a quick service tea franchise offering uniquely flavored tea products, slush drinks, and other menu items for dine in, carryout, and delivery.
Franchising since 2021, the brand has built a following around its distinctive tea creations and recognizable branding, attracting customers who seek premium specialty tea beverages in a stylish setting.
The initial franchise fee is $50,000.
The Alley Franchise Cost & Fees
Minimum Investment
$359K
Average Investment
$557K
Maximum Investment
$755K
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $50,000 | One-time payment upon signing |
| Royalty Fee | 7% of Gross Sales of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 1% of Gross Sales | National brand fund |
| Total Investment Range | $359,000 – $755,000 | Includes build-out, inventory, working capital |
The investment range of $359K–$755K reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (7% of Gross Sales) and marketing fee (1% of Gross Sales) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Initial Franchise Fee | $50,000 | $50,000 |
| Rent – 1st Month | $6,000 | $18,000 |
| Lease & Utility Security Deposit | $6,500 | $25,000 |
| Design & Architect Fees | $6,000 | $12,000 |
| Leasehold Improvements | $150,000 | $400,000 |
| Signage | $4,000 | $8,000 |
| Equipment, Furniture and Fixtures Office Set Up | $40,000 | $100,000 |
| Point of Sale & Computer Equipment Internet, Phone, Security | $6,500 | $12,000 |
| Business Licenses & Permits | $3,500 | $5,000 |
| Professional Fees | $3,000 | $5,000 |
| Insurance – 3 Months | $3,000 | $5,000 |
| Initial Inventory | $40,000 | $50,000 |
| Initial Training (Excluding Travel and Living expenses) | $15,000 | $15,000 |
| Grand Opening Marketing | $8,000 | $20,000 |
| Additional Funds – 3-months | $17,500 | $30,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $25,000 |
| Renewal Fee | $10,000 |
| Technology Fee | Up to $350 per month |
| Audit Fee | Actual costs |
| Local Marketing | Minimum of 1% of monthly Gross Sales |
| Grand Opening Marketing | $10,000 |
| Local and Regional Advertising Cooperatives | As determined by cooperative members |
| Initial Training for Operating Team (additional managers) | $15,000 plus expenses |
| Supplemental On-Site Training | $400 per day plus expenses |
| Annual Conference | Varies, but not exceeding $1,000 annually |
| Royalty Payment Late Charge | Lesser of 5% per month of late royalty payment or $50 |
| Royalty Reporting Charge | $50 per occurrence |
| Financial Reporting Late Charge | $100 per occurrence |
| Interest Charges | Lesser of 12% per annum or maximum legal rate; 18% per annum or maximum legal rate if unpaid for >30 days |
| Collection Costs and Attorney Fees | Amount incurred by us |
| NSF Check Fee of Failed Electronic Fund Transfer | 5% of amount or $50 whichever is greater or maximum fee allowed by law |
| General non-compliance | Amount of actual fees, costs and/or expenses |
| Product or Supplier Non-Compliance | $1,000 per day and in addition plus amount of fees, costs and/or expenses |
| Architectural Plan Review | $1,000 to $3,000 |
| Insurance Review | $1,000 |
| Supplier Review | Our actual costs |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | approximately 14-day period |
| Classroom Training | 16 |
| On-the-Job Training | 153 |
| Training Location | Berkeley, CA (for significant on-the-job training), Off-Site at Franchisee’s premises (for classroom training), At your location (for some crew training) |
| Additional Training | We may require supplemental on-site training at your Restaurant Location for a fee of $400 per day plus expenses. Newly hired managers must complete initial training at franchisee's expense. We may establish a system-wide training program, which you or your Managing Owner must attend, with travel, lodging, food, automobile rental expenses, and employee wages paid by you. Attendance at system-wide training programs will not exceed five (5) days in any calendar year. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Non-exclusive, Designated Territory |
| Exclusive Territory | No |
| Territory Size | Generally, a distance of one (1) mile from the Restaurant Location in all directions travelable by road, but may be smaller based on population density, demographics, and geographical boundaries. OR the smaller of a distance of one (1) mile from the Restaurant Location in all directions travelable by road or, a territory encompassing a population of 250,000 people as of the date of the Franchise Agreement. |
| Description | Once an approved Restaurant Location is secured, an area around it will be designated as your Designated Territory, determined by us based on population density, demographics, and geographical boundaries. We will not establish or grant another franchisee the right to open a The Alley Restaurant within your Designated Territory, except for Reserved Rights. You may face competition from other The Alley Restaurants, company-owned outlets, or other channels of distribution. You may only offer products/services from your Restaurant Location within your Designated Territory to retail, personal carryout, and delivery customers, and for catering. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | five (5) years |
| Renewal Term | three additional five (5) year terms |
| Renewal Fee | $10,000 |
| Renewal Conditions | You must not be in default, comply with all material terms, owners and spouses must be in compliance, give 180 days written notice, sign our then current franchise agreement and related agreements, sign a general release, pay all monetary obligations, remodel and upgrade the facility, and maintain the right to occupy the location. The new agreement may have materially different terms. |
| Transfer Fee | $25,000 |
| Transfer Conditions | Provide 30 days written notice, satisfy all accrued monetary and other outstanding obligations, not be in default, transferee must agree to be bound by all terms, transferee's owners and spouses must personally guarantee, you and your owners and spouses must sign a general release, transfer must provide for assignment/ownership of approved location and continued use, assets must be transferred, transferee and managers must complete training, franchisor's approval of price and terms of payment, transferee's employees with access to confidential information must sign confidentiality agreement, franchisee must subordinate installment payments to franchisor, transfer must comply with all applicable laws. Franchisor has right of first refusal. |
| Termination for Cause | Franchisor can terminate for various reasons, including insolvency, bankruptcy, failure to operate, failure to pay fees, material misrepresentation, unauthorized transfer, disclosure of confidential information, felony conviction, unethical conduct, underreporting sales, using unapproved supplies, failure to complete training, immediate threat to public health/safety, loss of right to occupy premises, failure to comply with Anti-Terrorism laws, misappropriation of Licensed Marks, or failure to pay fees within 10 days of notice. Curable defaults (e.g., failure to timely lease/develop/open, violation of laws, failure to maintain insurance, non-compliance with standards, failure to pay suppliers) have a 30-day cure period (10 days for fees). |
| Non-Compete Period | during the term of the franchise and twenty-four (24) months after the franchise ends |
| Non-Compete Details | During the term, you cannot own, operate, manage, fund, or perform services for a Competitive Business (except <3% interest in publicly traded company) or divert customers. Post-termination, for 24 months, you cannot engage in a Competitive Business within your Designated Territory, a 25-mile radius of your Designated Territory, or a 25-mile radius of any other Restaurant. This includes non-solicitation and confidentiality covenants. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | Yes |
| Participation Details | The Managing Owner (if a Corporate Entity) or you (if an individual) must be personally responsible for the management and overall supervision of your Restaurant. We recommend personal participation in day-to-day management, but an Operating Manager can be hired if they meet our standards, complete training, and sign a confidentiality agreement. The Restaurant must always be managed and supervised on-site by either a Managing Owner or an Operating Manager. If multiple Restaurants are operated, each must have an Operating Manager on-site. |
| Required Suppliers | You are required to purchase initial inventory through our affiliate, Nova Concept, Inc. and through our required supplier, Sysco Corporation. Nova Concept Inc. sells creamers, syrup flavors, milk tea products, straws, lids, cups, holders, and other assorted materials for your The Alley location. We may designate ourselves and our affiliates as exclusive suppliers for source restricted goods and services. |
| Supply Restrictions | You may only offer and sell designated products and services and use, lease, and/or install authorized products, services, furniture, fixtures, equipment, ingredients, beverages, packaging, paper goods, small wares, and other materials and supplies. All operations must conform to franchisor's specifications and procedures. Approval is required for non-designated suppliers, which may incur a fee for review and evaluation. |
| Franchisor Revenue from Suppliers | Our affiliate, Nova Concept Inc., is owned 100% by our Chairman/CEO, Mao-Ting Chiu, who will derive revenue from required franchisee purchases. During our most recent fiscal year ending December 31, 2021, neither we nor our affiliates derived any revenue from required franchisee purchases. We and/or our affiliates may receive rebates, payments, and other material benefits from suppliers based on franchisee purchases. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | No |
| Description | We do not offer direct or indirect financing. We do not guarantee your note, lease or obligation. |
The Alley Franchise Earnings — Item 19
The Alley does not make an Item 19 financial performance representation in their FDD. This means they do not disclose revenue, profit, or earnings data for franchised locations. Before investing, ask the franchisor directly for franchisee contact information so you can speak with existing owners about their actual financial performance.
The Alley does not include an Item 19 financial performance representation in their FDD. Contact information for current and former franchisees is listed in Item 20 of the FDD.
The Alley Litigation & Risk Flags
Clean Litigation RecordThe Alley has no pending litigation actions listed in their FDD. There is also no bankruptcy history disclosed.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
The Alley System Growth
Total Units
5
Franchised
3
Company-Owned
2
The Alley currently operates 3 franchised locations and 2 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2019 | 0 | 0 | 2 |
| 2020 | 0 | 0 | 2 |
| 2021 | 3 | 0 | 5 |
Transfers: 3 | Closures: 0
State Registrations
Registered in 22 states: CA, ME, CT, MD, MI, MN, FL, NE, HI, NY, IL, NC, IN, ND, KY, RI, SD, TX, VA, UT, WA, WI
Franchisor Financials (Item 21)
0
Net Income
$-114,201
Total Assets
$91K
Audited by Chen & Fan Accountancy Corporation for year ending December 31.
The Alley Franchise — FAQ
The total investment to open a The Alley franchise ranges from $359,000 to $755,000, per their Franchise Disclosure Document. This includes the initial franchise fee of $50,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
The Alley charges a royalty fee of 7% of Gross Sales of gross sales, plus a 1% of Gross Sales contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the The Alley Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from The Alley to ensure you have the most up-to-date version.
The Alley does not provide an Item 19 financial performance representation in their FDD, which means they do not disclose franchisee revenue or earnings data. Prospective investors should contact existing franchisees directly (listed in Item 20 of the FDD) to gather real-world financial performance information.
The Alley has been franchising since 2021. The FDD shows an investment range of $359,000-$755,000, a 7% of Gross Sales royalty, and includes an Item 19 earnings disclosure. There is no pending litigation. Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $50,000 and the total investment ranges from $359,000 to $755,000 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from The Alley and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with The Alley or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com