---
title: "Is Wahaha's Nostalgia Worth 600,000 Yuan for a Milk Tea Franchise?"
description: "On July 27, Wahaha opened its first direct-operated milk tea store in Guangzhou, with Zong Qinghou attending to taste products and propose development concepts. However, despite the new direct store, several franchise stores had already appeared, and Wahaha's official Weibo stated that the milk tea project is not directly operated but authorized to partners. As the 33-year-old brand faces aging concerns, its foray into the competitive new tea market raises questions about whether nostalgia alone can sustain franchisees."
author: "锌刻度"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2020-08-03"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/S7GHDJ3AZLKCHcD39xbdlQ"
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---

# Is Wahaha's Nostalgia Worth 600,000 Yuan for a Milk Tea Franchise?

> On July 27, Wahaha opened its first direct-operated milk tea store in Guangzhou, with Zong Qinghou attending to taste products and propose development concepts. However, despite the new direct store, several franchise stores had already appeared, and Wahaha's official Weibo stated that the milk tea project is not directly operated but authorized to partners. As the 33-year-old brand faces aging concerns, its foray into the competitive new tea market raises questions about whether nostalgia alone can sustain franchisees.

**Click the image above for details**
On July 27, Wahaha milk tea opened its first direct-operated store nationwide in Guangzhou, with Zong Qinghou present to taste the flagship products and propose development concepts.
In fact, although the direct-operated store has just been launched, several Wahaha milk tea franchise stores had already appeared earlier. In response, Wahaha's official Weibo stated: "The milk tea project is not our direct operation; it is authorized to partners for operation."
**The 33-year-old Wahaha has faced constant criticism of being "aging" and "outdated" in the past two years. Under the leadership of the second-generation leader Zong Fuli, Wahaha has frequently crossed boundaries and launched four e-commerce projects, yet these criticisms persist.**
Now, Wahaha, known for its slow response, has set its sights on the red-hot new tea beverage market. But in this field that demands extreme innovation, can Wahaha use its nostalgia card to capture new demographics, scenarios, and experiences?
Perhaps from the moment it took this step, Wahaha's target was not Heytea or Naixue Tea.
**-01-
Spending 600,000 Yuan, Waiting in Line to Open a Store?**
After Wahaha milk tea's first direct-operated store landed, franchise business has become even more heated. Searching "Wahaha milk tea" on Weibo reveals multiple third-party agencies posting franchise information.
The copy is largely similar, often starting with Wahaha's nostalgia card—"Such an old brand entering milk tea, this is absolutely great! Full of childhood memories." Then, they attach @Wahaha Milk Tea Franchise Official Weibo to request franchise fees and conditions.
By filling out the form, Zinc Scale (a media outlet) communicated with the relevant franchise manager. During self-introduction, franchise manager Li Shuang told Zinc Scale: "Wahaha milk tea does not have a dedicated franchise department; it is entrusted to third parties like us."
Subsequently, the other party sent relevant materials and brochures for franchising Wahaha milk tea stores. They also mentioned some current issues with Wahaha milk tea franchise stores, such as high capital requirements, no loans allowed, and partners required to be fully committed. Due to team shortages, Wahaha milk tea company cannot serve all franchisees in a timely manner.
To verify Li Shuang's claims, Zinc Scale further contacted Wahaha milk tea project manager Zhang Wei. He denied all third-party promotional agencies: "These are scam companies; we are the real Wahaha company."
However, both parties sent the same promotional materials and franchise conditions to Zinc Scale. In communication with Zhang Wei, it was confirmed that Wahaha milk tea's current reception capacity is limited. Zhang Wei told Zinc Scale: "Even if you join now, you'll have to wait until at least October for someone to receive you."
Wahaha milk tea franchise conditions
According to materials from both, franchising a Wahaha milk tea store requires an investment of 500,000 to 600,000 yuan. Of this, 250,000 yuan is for operational services, technical training, and operational training; 100,000 yuan is for in-store equipment, cashier system, and supply chain; 20,000 yuan is a cooperation deposit, which is transferred to Hangzhou Wahaha Group, not to Guangzhou Wahaha Health Beverage Co., Ltd., which is responsible for milk tea business operations.
Additionally, franchisees must bear an annual management fee of 20,000 yuan, decoration costs of about 80,000 yuan, initial raw material procurement of 50,000 yuan, and store rent, transfer fees, and daily operating reserves of 100,000 yuan.
An investment of 500,000 to 600,000 yuan is already a relatively high franchise fee for milk tea. Li Shuang told Zinc Scale: "Opening a milk tea store is actually to make money; no matter how big the brand, it depends on taste. Even if franchisees fail, the company can later open direct stores and stop recruiting franchisees."
Despite 33 years of brand cultivation, is Wahaha milk tea's brand effect really worth 600,000 yuan? Zhang Wei repeatedly emphasized to Zinc Scale that the initial franchise recruitment is very hot, with contracts already signed up to number 385. But in reality, few stores have actually opened, and whether franchisees profit or lose remains to be seen.
**-02-
Heytea's Costs, Yidiandian's Pricing**
"Brand franchising is all about earning franchise fees; investing 500,000 or 600,000 yuan in a storefront is better than a milk tea franchise," said Blair, a former city manager for a milk tea supplier, to Zinc Scale.
She mentioned that opening an ordinary milk tea store costs about 100,000 yuan; franchising is essentially buying a brand, but 500,000-600,000 yuan is too expensive.
According to Zhang Wei, the Wahaha milk tea project manager, their market research shows that Wahaha milk tea's gross margin can reach 62%.
A 62% gross margin is not high in the milk tea industry. Blair revealed, "Milk tea itself is a very low-cost product, with gross margins typically above 70%, and some even reaching 90%." Moreover, Wahaha milk tea's gross margin may be hard to maintain at 62%.
From Wahaha milk tea's pricing, the lowest price per cup is 10 yuan, and the highest is 22 yuan. Zhang Wei stated that all materials used by franchisees must be purchased uniformly from Wahaha Group, including raw materials, cups, straws, and packaging bags, with a per-cup material cost of 4-5 yuan.
**The cost is similar to Heytea, but the pricing tier is consistent with Yidiandian and COCO. Additionally, franchisees must bear high labor, rent, utilities, and other expenses, leaving thin profit margins.**
"Milk tea is ultimately a fast-moving consumer good, basically unaffected by the internet, relying mainly on sales volume. Wahaha is a well-known Chinese brand with strong brand influence," Zhang Wei told Zinc Scale about Wahaha's brand influence, but in fact, milk tea is a product significantly affected by the internet.
Wahaha milk tea offline store
From the development strategies of new tea giants like Heytea and Naixue Tea, it's clear that offline store design is important, but marketing on new media platforms like Weibo, Xiaohongshu, and Douyin also plays a crucial role, expanding consumer groups and scenarios by creating fashionable and trendy labels.
**However, from opening stores to franchising, Wahaha has focused on one point: nostalgia. Undeniably, Wahaha is indeed part of Chinese childhood, but nostalgia is not a sustainable chip.**
Some consumers who have checked in at Wahaha milk tea stores complained on Weibo: "Sincerely suggest Wahaha give up entering the milk tea industry; spending 16 yuan on a cup of AD calcium milk is really not worth it."
It is understood that besides using Wahaha products like AD calcium milk and Wahaha mineral water as raw materials, other materials are no different from current milk tea shops. Especially the cheese nutrition express series, such as the combination of calcium milk feizixiao and calcium milk crispy grape, is similar to grape cheese fruit tea.
To find a survival path in the fierce competition of new tea, continuous innovation is key. Relying solely on Wahaha's brand influence and nostalgia makes it difficult to bring long-term traffic to franchisees. Especially, milk tea is a category with low average order value, requiring high consumption frequency to support store revenue.
What franchisees can see is the nostalgic advantage of the 33-year-old Wahaha, but it's hard to see that behind this lies a survival rule known only to insiders—the seemingly glamorous milk tea industry is fraught with risks, with entrepreneurs facing high failure rates.
**-03-
Can Playing the Nostalgia Card Alone Make Franchisees Money?**
Wahaha's entry into the milk tea industry has obvious advantages. As a time-honored brand that accompanied a generation's growth, attracting consumers for initial consumption is easy, and filtering out loyal users is natural.
**At the same time, Wahaha milk tea's raw materials are closely linked to its own product chain, which can both feed back and provide cost control advantages. But this is a good business for Wahaha; franchisees can gain more of just a signboard.**
"Take Yidiandian as an example; if the cost is about 1 yuan, then it becomes 3 or 4 yuan when it reaches the franchisee," Blair told Zinc Scale. Franchisees' costs are much higher than the manufacturer's, and these costs directly compress profit margins, increasing survival difficulty.
Netizens check in at Wahaha milk tea
Wahaha's nostalgia effect is hard to sustain their survival in the new tea track.
Brands like Heytea and Naixue target the high-end market with higher pricing, naturally affording more marketing and material costs; Yidiandian and COCO target the mid-end market with diverse product categories and moderate prices, and despite weaker marketing, they still generate high-frequency consumption; Mixue Bingcheng focuses on the lower-tier market with costs around 6-7 mao, but by the end of last year, its store count exceeded 7,000, dominating that market.
So which segment does Wahaha belong to? From the Wahaha milk tea project brand manual, its brand positioning is "national trend nutritional tea," targeting "16-35-year-old mainstream tea consumers, mainly female."
**Whether from its own positioning or the product innovation seen so far, Wahaha's late entry shows no highlights; consumer focus is almost entirely on the time-honored Wahaha signboard itself. But the milk tea project may not be a failure for Wahaha; franchisees attracted by the signboard alone are enough to make it profitable.**
However, whether franchisees are partners who can make money or leeks under the sickle remains to be seen...
Source: Zinc Scale (ID: znkedu), Author: Xing Wan


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