HTeaO

When we think of the beverage industry, coffee is typically what comes to mind first. As a core component of most Americans’ diet, coffee has become an almost impenetrable business concept.

Armed with entrepreneurial intuition, Justin Howe, CEO and founder of HTeaO, changed that when he reverse-engineered profitability to validate the untapped iced tea category within the QSR-space.

The incubator process began during the 2008 recession. Justin’s parents, Gary and Kim Hutchens, were operating a burger concept called “Buns Over Texas,” and were looking for creative ways to increase their sales. Deciding to introduce six unique iced tea flavors to the menu, they were surprised to see so many customers coming in specifically for the iced tea. In order to test the viability and profitability of the business model, they created their first stand-alone iced tea shop known as “Texas Tea.” Seeing the success after two years, Justin knew it was time to reimagine what could be made possible for this niche beverage option.

As a serial entrepreneur, Justin has founded over 20 companies, and spared no expense on the initial prototype locations. Taking more of an analytical approach, every aspect of the business was tested, monitored, and perfected. From the back-end support, prime real estate, operations, marketing, finance, supply chain to product quality. He wanted to prove that the concept could be successful locally before franchising the concept to scale nationally. At one point he even turned down 25 franchise candidates that were ready to sign, because he was not convinced the model was as efficient as possible. In 2018 the HTeaO brand was officially launched, after almost a decade of preparation and refinement.

“We’re a data-driven company. It was crucial to start with research and development and delay expectations for profitability to create the right business model,” said Howe. “If you start a business with the goal for profits you’re starting a job, not a scalable business. As I was building the brand, I was learning how to be a franchisor, and knew I wanted to be the one to go before them with thinking of everything.”

Being first-to-market, Howe and his team knew they had to problem-solve in order to make a mark within this niche category in the beverage market. Overcoming obscurity will always be an area of focus to ensure HTeaO remains ahead of the QSR trends.

Each HTeaO location offers 26 proprietary flavors, all made using broad leaf tea and completely natural ingredients. Recognizing the importance of consistency in products, each location is equipped with their own proprietary water plant, filtering out all impurities. With iced tea rarely having been a primary menu item for most restaurants, not many distributors place a large focus on the ingredients needed to produce it. In order to ensure each location gets the quality ingredients needed for their iced teas, HTeaO created their own supply chain, which has proven to be much more cost efficient and sustainable as they launch across the U.S.

Currently operating in 13 states, HTeaO recently opened their 63rd location this year, and has over 400 franchise agreements signed. The following states have signed franchise agreements with sites secured and/or under development: Alabama, Arkansas, Arizona, Colorado, Florida, Georgia, Kansas, Louisiana, Missouri, New Mexico, Oklahoma, Tennessee and Texas.

more health conscious as they think about what is going into their bodies, making iced tea a growing option over things like soda and coffee. As the demand strengthens, HTeaO will continue to innovate through new drink offerings, flavors and seasonal offerings. They currently offer a variety of healthy grab-n-go snacks in addition to their teas.

The community-driven organization also believes in “brewing purpose”. Locations are constantly offering promotions and ways to give back to their communities and local charities. Almost every October, HTeaO has partnered with the Ryan Palmer Foundation and allows guests to ‘Round-up with Ryan’ to support the Ryan Palmer Breast Cancer Initiative. With only 63 locations currently operating, the goal was to raise around $50,00. By the end of the campaign over $70,000 was raised. In addition to charitable initiatives, many locations will recognize local officials and prominent members in the community by giving back on appreciation days, and offering free teas to those being honored.

“Supporting our communities and franchise partners is a core tenant of this brand, and a large contributor to its success,” said Howe. “We are open and honest, and welcome all ideas. We are not married to one philosophy, but value input so we best know how to meet our guest’s needs.”

The beverage industry is noticing that many consumers are searching for more plant-based and dairy-free options, and they want to lower their sugar intake. “Better-for-You” beverages that focus on fresh ingredients, clean labels, lower amounts of sugar, minimal calories, and caffeine alternatives are currently in high demand, a trend that HTeaO has been capitalizing on. Focusing on all-natural ingredients and fresh brewing their tea, HTeaO is passionate about offering a beneficial product that consumers enjoy.

HTeaO is focusing on developing locations across the U.S., with their current focus on Florida and the East Coast. Having recently hired a Franchise Candidate Advocate located in Florida to spearhead development in the area, the brand currently has two locations open in Florida. This is one of the first major steps the brand has taken towards their East Coast expansion. With over 400 franchise agreements currently signed, the brand hopes to have 500 locations open by 2027.

Sometimes franchises reach new heights of success when they plan and execute major changes. They change their product offering, expand into new countries, add new lines of business, or implement major new marketing programs.

But I would like to offer my opinion that significant improvements often result from smaller changes, like these:

• Franchise A creates a buying service which enables franchisees to get lower prices and better service, resulting in an across-the board profit increase of 5%.

Although not sexy, impactful. • Franchise B implements a learning management system which reduces training costs and results in improving

Net Promoter Score by 10 points and increasing sales by 20%. Although not sexy, impactful. • Franchise C implements a new compensation package and bonus system that reduces turnover by 50%, saving the company money in hiring and training and resulting in improving net profit by 3% due to having a more effective, seasoned team.

As you can see, several small changes made in concert can result in profit increases that are on a par with those that result from major changes. But how can you plan those changes? Aren’t they difficult to conceptualize or incorporate into your company strategy for the coming year? Well, yes and no, because you can make plans to connect openly and effectively with individual franchisees and uncover a number of seemingly small initiatives which, in sum, can add up to major improvements in operations and profits. In short, as a franchise company you can . . .

When you do that, you open floodgates that release a flow of new ideas and plans from the front ranks of your franchise company. And you can do that in 2023 by making plans like these.

A franchise council is an organization within your organization where individual franchise owners come together – either in-person or virtually – to connect and share their best ideas, discoveries, and suggestions.

Depending on the size of your franchise and the number of your locations, membership could include only four or five individual owners, or as many as 20 if your franchise includes 40, 50 locations or more. You can invite individual franchise owners to become members or ask current owners to nominate other franchise owners who should join. Hold meetings at regular intervals and encourage members to share ideas and make suggestions to the central franchise company. Use your council to generate those smaller ideas that have big impact. Establish Sub-Councils and Task Forces

If you have a franchise council, you can set up sub-councils that focus on issues like customer service, marketing, technology, and other critical topics. If you do not yet have a council, you can still invite franchisees to join task forces that address those topics. Again, the result will be that individual owners no longer feel like they are “working in a vacuum.” A new flow of suggestions and ideas will result.

evan Hackel is a 35-year franchising veteran as both a franchisor and a franchisee. Evan is Entrepreneur, Author, Speaker, Podcaster. Evan is the CEO of Ingage Consulting and a advisor to Tortal Training. Evan is also host of the highly successful Training Unleashed podcasts and author of the book Ingaging Leadership Meets the Younger Generation. For more information, visit https://www.evanspeaksfranchising.com and follow him on LinkedIn https://www.linkedin.com/in/evanhackel/

This is a low-cost way to improve communication within the system. This can speed up your implementation of programs and give you a second opportunity to launch new initiatives.

In most cases, franchise systems communicate too often, creating a lack of urgency by the franchisees to read or listen to the communication. Having less communication, but done at a higher quality will greatly improve the effectiveness of communication within your system.

the Younger Generation, I explain a way of listening that I call Ingaged Listening. To practice it, you simply cultivate the habit of listening for ideas that are right and promising, not wrong. (How many executives are always seeking to find fault? I am afraid that too many of us are.) And when you hear one of those positive “nuggets of wisdom,” be sure to ask about it and ask the speaker to explore and develop it further.

The result will be a flow of good new ideas from the ranks of your franchise owners. Many of them will be actionable new practices like those I listed at the start of this article. One franchisee could take the lead in renegotiating vendor and supplier relationships. Another could develop new training approaches for training your product installers.

There are major plans and then there are minor plans which, in combination with others, can result in significant improvements in your profitability and success.