Tea Lounge to expand to Middle East

On a typical weekday morning at Tea Lounge, a café in the upscale neighborhood of Park Slope in Brooklyn, N.Y., people work on their laptops while using the air conditioning, tapping into free wifi, drinking specialty coffee and tea, and eating baked goods and breakfast wraps.

In the afternoon, parents and nannies with small children tend to make up the bulk of customers, eating prosciutto sandwiches or chicken wraps while the kids play.

At night, guests drink beer, wine and cocktails while watching a string of three-minute bits by stand-up comedians. On other nights they will listen to live music.

“I went through all the café franchises,” said Jonathan Spiel, Tea Lounge’s owner. “There’s nothing else like this, that has the café/entertainment/bar feature.”

Now he has decided to turn Tea Lounge into a franchise and recently signed a deal with his first franchisee, a Kuwaiti businessman named Mohammed al Arbash who plans to open his first Tea Lounge in a Kuwait City shopping mall in November.

Spiel collects an initial franchising fee of $25,000, plus a 5-percent royalty (discounted to 2.5 percent for the first four months), as well as a 1-percent brand development fee.

Potential franchisees must have a minimum net worth of $400,000, and $100,000 in liquid capital. In return they receive 10 days of training in Brooklyn and a 175-page operations manual that lists everything from the types of cups used to recipes for signature items like the "eggspresso" — a fluffy egg dish cooked in 30 seconds with a steam wand — and the Nutella breve, a beverage made with hazelnut coffee, chocolate syrup, and steamed half and half.

On Tea Lounge’s website, Spiel estimates the initial investment to open a unit at between $145,750 and $346,250.

At the 4,000-square-foot Brooklyn location, Spiel said he rings up just over 400 orders on the average weekday. The average check ranges from $5 to $6. Weekends are significantly busier, he said, except during the height of summer, when many customers leave town.

The concept can operate in smaller locations, he said, possibly in a space as small as 1,500 square feet.

Spiel said he expects Tea Lounge franchisees to be more entrepreneurial and creative than the average franchisee. He likes to say he’s trying to create an “unfranchise.”

“We’re a community place,” he said of Tea Lounge, whose tagline is “Come together.” To that end, organizations leave leaflets or post information on the restaurant’s bulletin board, which is near an ATM and grab-and-go fridge with cold drinks.

“Sure, we have 65 kinds of tea and great coffee, but this is a place for community, so what works in Park Slope might not work in Boston or Miami or Kuwait,” Spiel said. “A large percentage of our customers are regulars, and we want them to come in more than once a day."

That means the type of events planned to keep people coming in during all dayparts might need to be adjusted depending on the location. Menu tweaks will likely be necessary, too.

“Obviously in Kuwait we’re not serving a prosciutto sandwich, and we don’t have a bar, but we have to have cheesecake because Kuwaitis love it,” Spiel explained.

Al Arbash said he appreciated Spiel’s “tremendous passion” for the concept, as well as the “beautiful looking and great tasting drinks.”

“After looking at many concepts in the United States and Europe, we chose to work with Tea Lounge because of its unique concept, beautiful atmosphere, very nice menu, and the wide variety of wonderful teas and coffees and specialty drinks,” he said. He added that he hoped to open Tea Lounges throughout the Gulf region and the Middle East.

Contact Bret Thorn at bret.thorn@penton.com.
Follow him on Twitter: @foodwriterdiary