HTeaO sells Texas-sized cups of freshly brewed iced tea in 25 different flavors.
This article is part of “Where Are They Now?”—an ongoing series in which Franchise Times reporters Megan Glenn and Emilee Wentland catch up with emerging brands.
Iced tea concept HTeaO doubled its unit count in about 18 months, from 63 to 128 units.
“That work was done,” CEO Justin Howe said, referencing his 2022 Franchise Times interview. “We’re building stores right now, we have over 100 stores in construction at the moment. Most of them won’t open until ’25, some into ’26. All that work’s being done up front.”
Those in-development units span Arizona to Florida. The Texas-based franchise is focusing on the southern part of the United States for now. A lot of that expansion comes organically from fans of the brand, Howe said.
Howe is the son of co-founders Gary and Kim Hutchens, who flipped what started with six flavors of iced tea they served at their burger restaurant, Buns Over Texas, into an entirely new business.
The drinks—which start with a 24-ounce small size and go up to 44 ounces—attracted a cult following, with customers visiting just for the tea. There are more than two dozen flavors to choose from and guests can pick their sweetness levels.
Notable flavors range from a traditional Arnold Palmer tea-lemonade combo, which HTeaO calls its Ryan Palmer, a professional golfer from Texas, to a green tea with almond extract.
In 2022, the company did systemwide sales of $51 million.
HTeaO traditionally sought franchisees looking to open a few units, but as it’s grown the brand is open to larger partners, Howe said.
“We’ve been very reluctant to partner with those multi-brand developments in the past, because the HTeaO experience is a personal experience. … The product is amazing, but the foundation is in the guest experience,” he said.
Larger operators need to prove “that they can, at scale, love people,” Howe said. “It’s been tough finding those partners.”
HTeaO added coffee to its menu through a partnership with Free Rein Coffee Company, a Texas-based brand.
“We love coffee, but we thought it would be best to let someone that’s better at it than we are take the lead,” he said.
Stores are “killing it” right off the bat upon opening in new locations, he said. A recently opened shop in El Paso, Texas, was the top-performing store in the system for three weeks in a row, Howe said. The average unit volume was $1.35 million in 2022.
That’s of course due to HTeaO’s product, Howe said, but community marketing is a big sales driver as well.
Franchisees post grand opening events online and run geo-targeted, paid ads to promote the new store. Owners give away free iced tea on the first day open, Howe said, along with hosting games and events.
“We’re out meeting the community,” Howe said, “and giving away free gallons to introduce ourselves to the local churches, to the local schools, police departments, hospitals—anybody that’ll shake hands with us.”