FORT WORTH, Texas — HTeaO, a Fort Worth-based franchise of iced tea and beverage stores, is aggressively expanding, with much of its growth set to take place in its home state.
The company seeks to open 45 new stores in 2025 across Texas, Arizona, New Mexico, Louisiana, Georgia and Florida. About 80% of its new establishments will be in Texas.
HTeaO FC LLC is already one of the fastest-growing companies in the Metroplex, with nearly 88% revenue growth from 2021 to 2023. The company, which CEO Justin Howe and Gary Hutchens founded in 2009 in Amarillo, reached revenue of $33.6 million last year.
HTeaO has "incredibly strong" brand recognition in Texas, where it has 90 locations, President Heath Nielsen said. The company's second-largest market is Oklahoma, with 22 stores. In total, it currently has 128 open locations and leaders expect to end the year with 135.
HTeaO is known for serving 24 flavors of sweetened and unsweetened tea using natural ingredients. The franchise is backed by Crux Capital and Trive Capital, Dallas-based private equity firms that acquired a minority stake in HTeaO in 2023.
It's known for its efficient drive-thru service, which helped the company weather the pandemic. Looking forward, Nielsen said HTeaO will differentiate itself as a "fun, lighthearted experience where people can interact and enjoy themselves," something he said many other quick-service restaurants have lost.
Executives know they offer something slightly different than, say, a Starbucks. Unlike coffee chains that cater to morning commuters, HTeaO sees the bulk of its sales in the afternoon, with a daily "happy hour" from 2 to 4 p.m.
HTeaO leaders say its success is driven by its franchise model: the company has awarded more than 400 franchise licenses.
The total investment to open an HTeaO franchise ranges from $200,000 to $1.5 million, depending on location and real estate factors, Nielsen said. HTeaO’s average unit volume currently stands at $1.4 million. Each store typically employs about 30 workers.
When scouting for new sites, HTeaO considers several factors, including population density and proximity to complementary businesses like grocery stores and other quick-service restaurants. The company prefers to locate within a 5-mile radius of these establishments and find sites with a population base of about 30,000 to 40,000 people.
Prosper expansion
HTeaO's expansion plans include its first location in the rapidly growing town of Prosper, north of Dallas. The 2,000-square-foot location with a drive-thru will be located at Preston Road and First Street, Nielsen said.
The location is in the permitting phase with the city and it needs a general contractor, Nielsen said. If all goes to plan, construction could begin in about 60 to 90 days. Nielsen expects to open the new store in the second half of 2025.
Prosper saw its population grow an estimated 10.5% between July 2022 and July 2023 — the ninth-fastest rate in the country for places with at least 20,000 people. The city "checks all the boxes of the type of demographic and psychographics we look for," Nielsen said.
HTeaO also already has locations in Collin County in Plano and McKinney and Nielsen said there are plans to expand into Frisco in the near future.
