'We lost everything': family's hidden nightmare behind Australia's bubble tea boom

The couple, both in their 30s, saved for years in the hope of one day becoming their own boss.

Their dream of owning a business began as it has for many others: searching online for a franchise to buy.

"We wanted to have our own business, but rather than start from scratch, we wanted the security of having the support of an established head office," Ms Meghla said.

The couple was drawn to popular bubble tea chain Sharetea Australia, because its buy-in price was lower than that of many other franchises, and bubble tea was surging in popularity.

After putting up their $200,000 in life savings, the couple borrowed $100,000 from Sharetea and bought the chain's first store based in the Hunter region of New South Wales.

It opened in March 2023 in Wallsend Village shopping centre on the Newcastle suburbs, a location chosen by Sharetea's head office after it negotiated a lease within the local shopping centre.

The couple subleased the shop from Sharetea and set about building their future.

"We were so happy to be doing it," Mr Mollah said.

"We knew it would be a lot of work, but we thought if we worked hard, we could really build something for our family."

The reality was the complete opposite.

Turnover immediately fell short of projections provided by the company, the couple said.

"Right from the very beginning, the numbers just didn't add up," Ms Meghla said.

"We were working 72 hours a week in the shop, and couldn't make enough sales. I ended up taking a second job to help feed our family and pay the bills."

Having worked all day in the store, Ms Meghla would race to her second job and work all evening.

At 8am, she would return to open the Sharetea store. Then, after closing at 7pm, return to packing supermarket shelves. Mr Mollah also worked in the store and used the money from his day job to help keep it afloat.

The couple are among five current and former franchisees who told ACM masthead. The Newcastle Herald of their financial hardships after partnering with Sharetea.

They claim that behind the company's franchise model is a system where Sharetea Australia profits from unprofitable franchisees.

More stores in the Sharetea network mean more drink sales, and that results in more fees paid to head office, regardless of whether the stores are profitable.

Several franchisees said they had to work for free to keep their stores open, because there was no money left for wages after paying their bills and Sharetea's fees.

They said many Sharetea franchisees are migrants, and starting a business in a new country with language barriers and cultural differences makes them vulnerable.

Sharetea has rejected suggestions it does not adequately support franchisees, saying the interests of the company "and its franchisees are aligned".

For Jannat and Alam, poor sales meant the store was struggling to break even most months.

The couple said they had not drawn a wage for 18 months.

"We put everything we had into this," Mr Mollah said. "We have worked so hard for three years, and we have lost everything. What is lost is lost for us, but we are speaking out so others don't make the same mistake."

Ms Meghla, who is pregnant with the couple's second child, said she not only watched their life savings disappear, but also began struggling with poor mental health.

She said the constant stress of trying to make enough money to pay the shop's rent, buy stock, and keep up with Sharetea's fees was never-ending.

There were times the couple couldn't afford to buy milk for their baby or food.

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As a Sharetea franchisee, they were expected to pay royalties and marketing fees to head office, regardless of whether their store was making money.

About a year in, a new shopping centre opened nearby, and sales at the couple's Sharetea store plummeted by more than 30 per cent.

"Things were already really tough, and then it just got worse," Mr Mollah said.

"We were desperate for help and begging Sharetea to support us, but they kept sending bills for us to pay. It felt like we had a debt collection agency chasing us."

The couple blames poor site selection and lack of support from head office as the main reasons the franchise failed, a claim Sharetea rejects.

Mr Mollah said Wallsend Village does not attract the right demographic for a bubble tea outlet, due to the drinks' popularity with young people.

Best known for the variety invented in 1980s Taiwan that includes tapioca balls or "bubbles", flavoured milk tea beverages have proven a hit worldwide.

As Australians' appetite for bubble tea grows, so does the industry.

Last year, the global bubble tea market was valued at about $4 billion, with the Australian market estimated to be worth $108 million.

Teng "Anthony" Mu established Sharetea in Australia in early 2012, and the bubble tea chain says it has more than 150 outlets across the country.

In a statement, Sharetea said it was experiencing "strong growth" across its franchise network, despite economic challenges facing the retail and hospitality sectors.

Sharetea said the "vast majority" of its stores were trading profitably, and operating a franchise involved "commercial risk".

"The performance of individual stores is influenced by a wide range of factors, including local economic conditions, shopping centre performance, foot traffic, competition, labour availability, operator experience, management capability and changing consumer preferences," it said.

"Many of these factors are outside the franchisor's control."

Sharetea said "repeated breaches" of the franchise and other agreements meant it continued to lose money due to the Wallsend store. It said the franchisees had failed to pay fees, used unapproved ingredients, and that Sharetea was paying the rent for the store.

"As these matters are the subject of a continuing dispute, Sharetea does not consider it appropriate to comment further on the quantum of its losses," it said.

Sharetea said it conducts a detailed evaluation when assessing store locations, but could not guarantee the performance of a location or business, and it encouraged franchisees to do their own due diligence.

"Where franchisees experience difficulties, Sharetea works constructively with them to identify solutions and, where appropriate, assist with discussions regarding occupancy costs and other operational challenges," it said.

"Sharetea rejects any suggestion that it seeks to mislead prospective franchisees regarding business opportunities."

It said the company complies with its disclosure obligations under Australian franchising legislation and does not misrepresent the costs associated with operating a franchise.

Further, it said franchisees were provided with ongoing support, including training, operational assistance, marketing initiatives, product development, supply chain management and business guidance.

"The interests of Sharetea and its franchisees are aligned," it said. "The long-term success of the franchise system depends upon successful and profitable franchisees. Sharetea is committed to supporting franchisees to maximise the performance of their businesses."

Five current and former Sharetea franchisees have spoken with ACM masthead, The Newcastle Herald.

One franchisee said they were relying on family to survive because they could no longer afford to live in their home.

"I can't even really afford to hire people," they said.

"I work 80 hours a week, and I don't even pay myself. I can't pay myself otherwise, I can't pay GST, I can't pay royalty fees, and I can't pay the store rent.

"It is a miserable way to live. I have no life, and I can't wait to get out."

The franchisee said that if Sharetea introduces a new drink, stores must buy the ingredients, even if the drink doesn't sell.

"A certain quantity is assigned to you, and you can't say no," they said. "So, you have to pay for it, even if you are throwing it away.

"It's impossible. You also have to understand that the franchise ingredients can be 30 per cent more expensive than what I can get from an external supplier, but you have to use their ingredients."

Products must be purchased through Sharetea Australia suppliers, which gives head office another cut.

A former franchisee said some items were marked up nearly 10 times what independent distributors charged.

"The franchise agreement legally barred us from sourcing outside inventory," he said.

Sharetea declined to discuss its pricing arrangements, but said approved suppliers ensured food safety, consistency, and quality control.

Store location is crucial to success, and head office chooses locations and holds the master commercial lease for the premises.

A former franchisee said this leaves franchisees "trapped" and with "no bargaining power".

"The balance is always tilted in favour of head office when it comes to negotiating cost and renewals," he said. "It's not a level playing field."

After putting in seven-day work weeks for years for nothing, another former franchisee said he was "lucky" to be out.

He said people get "sucked in" because they want their own business, but Sharetea does not require franchisees to have any business experience or the funds to weather losses.

"I know a few people who are stuck in the business. They are losing money all the time, and they can't get out," he said.

"They are stuck in leases, and the franchise contract is 100 per cent watertight. I feel so sad for them. They have to go in every day and keep the store running, so they can lose more money and pay more fees to Sharetea."

Others have just packed up and walked away.

One man said he was offered a renewal of his franchise agreement if he took on another struggling store.

In response, Sharetea said it rejects any suggestion of an improper or standard practice requiring franchisees to acquire additional stores as a condition of renewal.

Several franchisees said they got little help from the area managers employed by Sharetea.

"There is a high turnover rate of staff, and I'm not sure exactly what business experience some of them have," he said. "We never found them much help."

Ms Meghla said she was initially enticed to investigate Sharetea by an advertisement that underestimated the fees due to head office.

She said the ad listed the marketing levy as 1 per cent of net and a royalty fee as 5 per cent of net. But when they met with Sharetea, they were told it was an error, and the marketing fee was 2.5 per cent of gross income, and royalties were 5.5 per cent of gross income.

This meant Sharetea's cut was significantly more than expected.

"I genuinely thought it was a marketing mistake, like a printing error," Ms Meghla said.

"But after three years, there is now an ad on Seek Business offering a new store for sale in the Newcastle area, and the marketing fee is listed as 1 per cent of net and royalties as 5 per cent of net."

Sharetea said prospective franchisees receive comprehensive disclosure documentation, including the applicable fees payable under the franchise agreement, before making any commitment.

Most franchisees declined to speak publicly due to fear of breaching contracts. Others had left the chain and signed agreements not to talk.

Several said that when franchisees spoke out against Sharetea, they were immediately shut down.

Ms Meghla said she was kicked out of a WhatsApp group of Sharetea franchisees once she started asking questions and posting negative comments.

"We might have lost everything, but they can't take my voice away," she said. "They can't stop me from speaking out about my experience."

According to documents seen by ACM, Sharetea had 124 stores in 2025, including 13 run by the franchisor.

Last financial year, 18 stores changed hands, three closed, one franchise agreement was not extended, and another store was taken over by head office.

More than 522,000 people are employed by Australia's franchising industry, which has more than 1100 chains and 70,000 franchisees. According to a 2023 review into the franchising code of conduct, the sector turns over an estimated $135 billion a year.

Following a series of high-profile scandals, the federal government announced last year a further $7.1 million in funding for the consumer and competition watchdog to increase compliance and enforcement in the sector.

The ACCC has since called on the government to adopt new franchise laws that would permit it to suspend badly-behaving chains and stop small business operators from suffering ongoing harm.

Australia's small business ombudsman, Bruce Billson - a former minister in the Abbott and Howard governments - encouraged franchisees with problems to contact his office.

Mr Billson said services were available to help resolve disputes.

He warned people looking to buy a franchise to not only understand the business they were buying into, but also how they could exit.

"They should understand different franchise models and the commitments that come with being a franchisee, and if they are a good 'fit' for what is expected," he said.

Mr Billson told the Herald people should ask the franchisor "lots of questions" and talk to franchisees, including people who have left the business.

"Make sure you understand all the financial obligations, including fit-out costs - initial and ongoing - fees, and supplier arrangements," he said.

"Invest in professional help. A lawyer who specialises in franchising agreements can explain the clauses to you. Business advisors and accountants can also provide advice and test the financials of the investment opportunity."