From the filings
Software purchasing at Hechalou International, a quick-service restaurant concept, is controlled by Founder and CEO Ethan Yi-Shen Fang at its California headquarters. The most recent 2025 Franchise Disclosure Document does not list any mandated or recommended technology systems, presenting a greenfield opportunity for vendors. The addressable market is currently limited to 1 franchised location, with no company-owned units disclosed.
For software vendors selling into US franchise brands.
Live signals
Ongoing fee load
The recurring percentage of gross sales named in this filing, before rent, labour or any technology fee.
5%of gross sales (FY2025)
15% reference
Franchisor behaviours
25 requirements the franchisor states in this filing, each in its own words; 3 explicit no's; 6 questions the text does not settle, which is not a no.
Accounting
Does the franchisor have direct or independent electronic access to the franchisee's financial, sales or customer records?
YesItem 11
We have the right under the Franchise Agreement to have independent access all of the information generated and stored in your POS systems.
How the franchisor buys
Is the franchisor or an affiliate itself a supplier of required products, services or systems?
YesItem 8
Currently, our affiliate, Hechalou TW, is the sole Approved Supplier of the Designated Goods that we consider proprietary to us, such as Designated Goods that contain our trade secrets or the Marks.
Does the franchisor reserve the right to change designated suppliers or systems at any time?
YesFranchise agreement
Franchisor has the unrestricted right to change, eliminate or modify any elements of the System, any Manual or the Marks.
How much revenue did the franchisor and its affiliates earn from franchisee purchases in the last fiscal year?
0Item 8
In 2024, we did not derive any revenue from required purchases and leases by franchisees in the United States.
Does the franchisor or an affiliate receive rebates, commissions or other revenue from designated or approved suppliers?
YesItem 8
We and our affiliates retain the right to receive rebates, incentive amounts, discounts, and other economic benefits from any supplier to Hechalou Tea Shops, and to generate profit from the sale of Designated Goods to you and other Hechalou Tea Shops.
Item 8 gives this proportion in one of two shapes: separate percentages for establishing the business and for operating it, or one figure covering "establishing and operating" together. Where they are separate, answer with the operating percentage; where the passage gives only the combined figure, answer with that. What percentage of the franchisee's purchases must come from designated or approved suppliers?
80Item 8
We project that the purchases and leases mandated by us will constitute approximately 80% of all purchases and leases incurred during the establishment of your Hechalou Tea Shop.
Does the franchisor charge a fee to evaluate a proposed supplier?
YesItem 6
You reimburse us for any costs we incur testing or evaluating any product/service/ supplier you propose.
Can a franchisee propose a new supplier for the franchisor's approval?
YesFranchise agreement
If Franchisee proposes to offer for sale or use at the Tea Shop any product or service or to use any supplier or equipment that is not then approved by Franchisor, Franchisee shall first notify Franchisor in writing and request Franchisor’s consent to do so.
Communications
Does the franchisor own or control the business telephone numbers, or take them over when the agreement ends?
YesItem 17
Assign all phone and fax numbers, email addresses, and domain names to us.
Franchise management
Must the franchisee participate in a customer-satisfaction or net-promoter survey program?
YesFranchise agreement
System Standards may involve requirements relating to Product preparation, storage, handling, packaging and storage; catering and delivery services (if approved); signage; use and display of the Marks; logo wear requirements; hours of operation; required participation in research, surveys, campaigns, conventions and…
Does the franchisor conduct periodic inspections, audits or evaluations of the franchised business?
YesItem 11
Conduct routine performance inspections to verify that products and ingredients adhere to our prescribed quality standards (Section 12.D of the Franchise Agreement).
Can the franchisor change the operations manual and brand standards unilaterally?
YesFranchise agreement
Franchisor has the unrestricted right to change, eliminate or modify any elements of the System, any Manual or the Marks.
Must the franchisor approve the franchisee's site or location before opening?
YesItem 11
It is imperative to note that you are prohibited from initiating business operations at your Hechalou Tea Shop until our explicit written consent is obtained (Section 3.D of Franchise Agreement).
Marketing
Is the franchisee prohibited from operating its own website or social media accounts, or required to use pages the franchisor provides?
YesItem 16
Without our prior written consent, you may not establish any online presence, including websites, Internet directory listings, or social media accounts related to your Hechalou Tea Shop or the franchised business.
Is a minimum grand opening advertising spend required?
YesItem 11
You are required to initiate a grand opening campaign within 7 days of opening your Hechalou Tea Shop to the general public.
Must the franchisee participate in a customer loyalty or rewards program?
YesItem 11
You are required to purchase and update the POS system, in addition to subscribing to any loyalty rewards program, gift card service, mobile orders, and analogous modules as required by us and/or as stipulated by the software and hardware manufacturers to maintain or operate the system.
Operations
Must the franchisee buy products from a designated distributor?
YesFranchise agreement
Franchisee shall purchase such Proprietary Products exclusively from Franchisor, Franchisor Associate(s) or Franchisor’s designated supplier, as applicable.
Must equipment be purchased from designated or approved suppliers?
YesFranchise agreement
Franchisee shall offer and use Products and Services, install and use Equipment and purchase only from suppliers approved or specified by Franchisor, to the extent required by Franchisor.
Payments
Are royalties and other fees collected by automatic bank debit (ACH or electronic funds transfer) from the franchisee's account?
YesItem 6
Unless explicitly stated otherwise, all fees shall be remitted to us via the method designated by us, including electronic funds transfer.
Must the franchisee participate in a gift card program?
YesFranchise agreement
Franchisee agrees to accept credit cards, debit cards, and such other means of payment; to sell and accept Franchisor approved gift cards, gift certificates, and other comparable items, as provided or designated by Franchisor or which are prepared using any standard form Franchisor prescribes; and to abide by the…
People
Does the franchisor require minimum staffing levels or specific roles?
YesItem 15
You must appoint at least three tea shop managers to oversee and manage your Hechalou Tea Shop, one of whom may be the Designated Owner.
Must employees wear uniforms specified by the franchisor?
YesItem 8
These Designated Goods encompass, but are not limited to, packaging and serving materials (e.g., bags, cups, etc.), certain proprietary ingredients, mixes, seasonings, flavorings, and other raw materials, supplies, kitchen equipment, computer hardware and software, uniforms, and signage.
Point of sale
Must the franchisee use a specific point-of-sale system designated or approved by the franchisor?
YesItem 11
It is imperative that you procure a minimum of one POS system hardware adhering to our specifications from our designated supplier.
Does the franchisor have independent access to the data in the franchisee's POS or computer system?
YesItem 11
We have the right under the Franchise Agreement to have independent access all of the information generated and stored in your POS systems.
Training
Can the franchisor charge the franchisee for additional, refresher or remedial training?
YesItem 11
We reserve the right to propose or mandate remedial training and supplementary training programs, which may be administered online, at our training facilities, or other designated venues, to ensure your adherence to current Products, Services, and brand standards.
Who buys here
The decision-maker a vendor sells to at this scale, and the gaps they’re paid to close, derived from our data by segment and unit count, not a guess.
The franchisee/operator personally, or a small franchisor still owner-run. Wears every hat.
Hechalou International is a quick-service restaurant brand operating a single franchised unit, with its headquarters in California. For software vendors, the immediate addressable market is precisely 1 location. The 2025 Franchise Disclosure Document does not disclose any company-owned units, and year-over-year unit growth is not available. The average unit volume (AUV) is also not disclosed. This is a nascent or tightly held system where a vendor’s relationship with the founder is the entire sales cycle.
The franchise operates under a 5-year initial term with a 5.0% royalty fee. While the scale is small today, any vendor securing a place as the first mandated or recommended solution could establish a long-term footprint if the system expands. The renewal conditions, which include a $30,000 renewal fee and a requirement to sign the then-current Franchise Agreement, suggest that the franchisor maintains tight control over unit economics and standards, including technology.
All purchasing authority appears to rest with a single individual. The only executive listed in Item 1 of the 2025 FDD is Ethan Yi-Shen Fang, the Founder and Chief Executive Officer. In a system of this size, there is no separate CIO, VP of Technology, or procurement committee. A vendor’s pitch must resonate with a founder-CEO who is likely balancing operations, finance, and strategy directly. The decision-making level is firmly at HQ, with no multi-unit operators mapped in our corpus to influence or complicate the sale.
The 2025 FDD contains no mandated or recommended technology systems. This is a critical data point: the brand has not publicly locked itself into any POS, payroll, inventory, or scheduling vendor. For a software sales professional, this represents a blank slate. There is no incumbent to displace, but also no established budget line or technical integration path to leverage. Your discovery call with the founder will need to establish both the current manual or ad-hoc processes and the ROI of formalizing them with your solution.
Item 8 of the FDD, which typically outlines purchasing requirements and designated suppliers, did not yield an extract in our corpus. The procurement model is therefore unknown. Vendors should be prepared for an informal, relationship-driven purchasing process rather than a formal RFP.
The most concrete timing signal comes from Item 17, which governs renewal. The single franchisee must provide written notice of intent to renew between 180 and 365 days before the 5-year term expires. They must also be in compliance with all agreements, including adherence to standards applicable to new or renewing shops, and pay a $30,000 renewal fee. This renewal event is a natural trigger for the franchisor to update system standards, including technology requirements. Aligning your outreach with this cycle, once the initial agreement’s expiration date is known, could be effective.
The full 2025 Franchise Disclosure Document is available below. For a vendor, the most important items to scrutinize are Item 11 (Franchisor’s Obligations) for any buried technology assistance requirements, and Item 8 (Restrictions on Sources of Products and Services) if a future extract becomes available. Given the lack of mandated tech, pay close attention to any operational pain points implied in the training or site requirements. This FDD is your primary source of truth before engaging the founder. For a ranked target list that benchmarks Hechalou International against higher-velocity franchise systems, FranCloud can help.
Questions vendors ask
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FDD alert
We’ll email you the moment Hechalou International files a new annual FDD, usually the freshest signal of a vendor change.
Operator footprint
1 operators run 1 mapped locations. 0 of them are multi-unit. Aggregate counts from the filing; no names.
Operators by units owned
Top states by locations
| CA | 1 |
|---|
Ownership
unknown of hechaloutea.
Related Quick service restaurant brands
Primary franchise filings · updated June 2026. Every figure is source-traceable and QA-checked.