July 10, 2024 • 24 mins
Dive into the latest episode of Retail Intel! Brian Sheehan sits down with Jasmine Chin, managing member of Happy Lemon USA, to discuss the art of serving refreshing, delectable beverages including their famous Cheese Foam Tea. Get ready to uncover industry secrets, brand stories, and inspiring tips.
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Episode Transcript
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Brian Sheehan (00:04):
Welcome to Retail Intel, the podcast where we
dive deep into the dynamic worldof commercial real estate.
I'm your host, brian Sheehan,and I'm thrilled to be your
guide on this journey throughthe bustling streets of retail,
the aisles of shopping centersand the world of commercial
property investment.
With me today is Jasmine Chin,a managing member of Happy Lemon
(00:25):
USA.
Happy Lemon is a global teabrand with locations in 20
countries that offers refreshingand delectable beverages to tea
lovers worldwide and is growingquickly.
If you haven't heard of cheesetea yet, you're going to be
hearing a lot more about it soon.
Cheese tea has been explodingin popularity in Asia for the
past decade and is starting togain popularity here in the US.
(00:48):
Jasmine, welcome.
Jasmine Chin (00:50):
Thank you, Hi.
Thanks for having me, Brian.
Brian Sheehan (00:52):
Well, I'd love to start with your background.
How did you get into commercialreal estate?
Jasmine Chin (00:56):
Yeah, so I mean, I've always been fascinated by
analyzing each community'suniques needs and wants, so so
the diversity and marketdynamics across different
communities is incrediblyintriguing to me.
This interest in understandingand catering to these distinct
demands naturally led me tocommercial real estate and out
of college I worked for morelike a family commercial real
(01:20):
estate company where I was ableto engage with and impact
various markets directly.
So that was very interestingand additionally, you know,
commercial real estate offersopportunities to create and
transform spaces, very differentspaces that significantly
influence, you know, localcommunities and also economies
and the quality of life for alot of people.
So I'm also, you know, as I was, more engaged in commercial
(01:46):
real estate.
It was very interesting and I'mdrawn to the challenge of
identifying, like primelocations, for example, for
Happy Lemon, understandingmarket trends, market strategic
investments, even for bothbusinesses and communities and
landlords.
So the complexity of everythingis very interesting and all
(02:07):
these real estate projectsreally excite me.
Brian Sheehan (02:10):
And how did you come to find out about and join
Happy Lemon?
Jasmine Chin (02:14):
Joining Happy Lemon, so a lot of it was family
focused.
So I was lucky enough to beable to work with my family, so
it was a great journey.
I mean, my dad was heavilyinvolved.
At some point he was the CEO ofthe company and he kind of blew
up the expansion on his ownreally.
So that was incredible andhaving that support and guidance
(02:37):
from him was a really big thing.
So first he started off, youknow, in Cupertino, one little
tiny store probably the worstlocation ever because nobody
knew who we are, who we wereback then, you know.
So absolutely no parking.
It was probably five stepsbelow ground level, so like
(02:59):
visibility was at like,basically, zero.
And somehow he was able to kindof blow that one store up and as
the years gone by it was likeso much easier to find.
You know locations once youestablish a brand that's amazing
.
Brian Sheehan (03:14):
Well, so, happy lemon.
What is it?
What was the inspiration behindits creation?
Jasmine Chin (03:19):
yeah, so a lot of it.
We want to focus on freshingredients, right, right.
So the boba industry, the bobamarket, has been around for many
, many generations in Asia andit's slowly trending and coming
to the United States and, with alot of competition with a lot
of beverage chains, we want tofocus more on accessibility and
(03:41):
also how healthy the productsare right.
Accessibility and also howhealthy the products are right.
So if you're feeling somethingfresh like a fresh lemon, you
know green tea, fresh lemon,honey, green tea right, we have
our own farm right.
So we have our own fruits andwe import our fruits from Taiwan
, from our farms.
So we want to make sure ourcustomers are able to drink this
multiple times a week, it's notjust a once a month treat thing
(04:03):
where they feel guilty drinkingit so me I.
I love boba.
I drink this, maybe you know.
I want to say like four or fivetimes a week.
I've been doing it for years.
Brian Sheehan (04:11):
So focus on fresh ingredients.
You have your own farms.
I mean, like you said, it's avery competitive space.
What are some other things thathelp make Happy Lemon?
Jasmine Chin (04:22):
unique.
So our vision was to saturatemarkets right, so we are one of
the biggest international bobachain and we want to saturate
each market.
So our vision and goal in theBay Area was to have one
everywhere.
So we popped up about 60locations in just a few years
and that's what we're doingright now in all major cities
and states right, and we wantthis to be a convenience for
(04:45):
everyone.
We want brand awareness.
If you are traveling from Japan, if you're traveling from
Taiwan, you're in Hawaii, you'rein Texas, you're in California,
you recognize this brand andyou're able to just kind of
trust the brand, trust theproducts and have it be like a
convenience thing for you trustthe products and have it be like
a convenience thing for you.
Brian Sheehan (05:06):
So not every landlord might be familiar with
Boba Tea or Happy Lemonnecessarily, depending on what
part of the country I'm in.
Why is that a great use for aretail shopping center.
Jasmine Chin (05:21):
You know that was one of the struggles throughout
the years.
You know, getting into primereal estate, prime shopping
centers with prime anchor stores.
So a lot of it kind of speaksfor itself.
In terms of our flagshiplocations.
You know where we're able to gointo big developers.
You know, like you guys right,phillips Edison, you guys, if
we're in Alamana Mall, if we'reat the Salesforce Transbay
(05:42):
Center, you guys have that sortof trust.
Right, your portfolio, you knowwhere are your other stores,
what are your numbers, how fastare you guys expanding?
Right, and I'm sure if we'retrying to get into a local
market that you guys are in aswell, you guys will check out
the store.
Right, how's grand opening?
What are the lines like?
What are the reviews like?
Even if the landlords areknowledgeable or they don't know
(06:05):
about boba or anything likethat, they do their due
diligence and having a goodportfolio matters along with
also like word of mouth, right?
you know, ask around.
Hey, are you aware of this?
Usually it's the youngergeneration that knows as well.
So a lot of landlords, will youknow, ask their kids, ask
whoever it is, and that kind ofhelps as well.
Definitely, I a lot oflandlords.
Brian Sheehan (06:26):
Will you know, ask their kids, ask whoever it
is, and that kind of helps aswell.
Definitely, I ask my daughterall the time about kind of
what's hip and happening, what'sinnovative, fast growing, and
this is a use category thatseems to kind of constantly
reappear.
Jasmine Chin (06:38):
Right yeah, a lot of malls and trending malls.
Now they want to target Gen Z.
They want to target what's hip,what's new, not like the old
school brands or anything likethat.
They want to gear towardswhat's trending right now.
Either it's on TikTok or likeInstagram.
Brian Sheehan (06:54):
Whatever it is, there's a big influence on that
as well but this has been aroundto your point for what decades
in Asia, and it's it's not justa fad right, right, yeah, no.
Jasmine Chin (07:06):
Boba tea drinking culture, beverage drinking
culture has been around for manygenerations.
I was just in Asia a few daysago and I kid you not like boba
chains.
They're literally back to backto back in a row.
Maybe there's like five on oneblock and the next block you go,
there's probably three, andit's just a culture.
It's people drinking one to twotimes a day.
(07:27):
They're thirsty, and it's beena culture and it's becoming a
culture.
Right now I can see it in theUnited States.
Brian Sheehan (07:34):
Of course, use restrictions, exclusives kind of
help protect or prevent thatfrom happening in a single
shopping center.
But do you see a similar thinghappening in the US?
Are you seeing a lot moregrowth and development beyond
where you're growing with HappyLemon?
Jasmine Chin (07:52):
Yeah, I mean exclusives.
Yes, we have a lot of tea andcoffee exclusives that kind of
do block us from going intocertain malls and plazas, but
I've that wasn't really in thebeginning I've noticed there's a
trend where landlords kind ofhold off on exclusives now
because they don't want to kindof tie themselves into a kind of
(08:15):
like a hole.
You know but you can correct meif I'm wrong but that's kind of
like the trend that I'mnoticing, like before there were
lots of tea exclusives, lots ofjuice, juice exclusives.
And I mean, with our varietyand our mass variety and menu
there's also some ways to getaround it, because if you say
we're a coffee shop, no, we'renot.
Maybe we have one item right.
(08:36):
So if you say we're a tea shop,not more than 50% of our menu
is fully tea.
We have smoothies, we haveslushies, and you really can't
also say we're a juice shopbecause we also have tea.
So I mean, the variety of ourmenu kind of helps also and it's
kind of also like, okay, are wea juice shop or a tea shop, so
(08:57):
we have something for everyone,kind of.
So it's kind of nice.
Brian Sheehan (09:01):
For our listeners who aren't maybe familiar with
Boba Tea or Happy Lemon.
I kind of want to talk realquickly about site criteria and
where you're growing and thosethings.
But I guess, first of all,what's your square foot size
range?
What's your sweet spot sizewise?
Jasmine Chin (09:17):
Yeah, so our sweet spot is about 1,200 to 1,400
square feet.
Anything bigger, fine, we'lljust have more storage room.
But we want to keep ourcustomer area cozy and welcoming
, right.
So if we have, for example,some states like Texas, right,
Much bigger land, we get 2,000,2,500.
(09:40):
Sometimes we're locked intobigger spaces because it's in
prime locations, totally fine.
But we want to make sure thefront of the house is just a few
tables.
We don't want maybe it's justopening, right and it's slow the
first two hours.
We want to make sure thatwhoever our first customer is
coming in or whoever's walkingby, they don't feel intimidated,
(10:02):
like why is it so empty?
It feels too airy.
So we want to make sure, nomatter how big the size is, the
front is going to.
We're just going to keep it atjust a few tables, make it nice
and cozy.
But ideally we want about like1,200 square feet to 1,400
square feet.
Brian Sheehan (10:16):
Okay, and that's great that you can flex where
you need to be, in the rightreal estate.
Jasmine Chin (10:24):
What's the current number of open locations?
In the US, we have about 120stores right now, wow.
Brian Sheehan (10:27):
And how many are you opening this year or will be
open by the end of 2024?
Jasmine Chin (10:33):
So we're planning on 20 more and with the speed of
growth, we're trying toobviously double and triple in
the next few years.
Brian Sheehan (10:42):
Wow, so next year , end of 2025, you'll have how
many open.
Jasmine Chin (10:46):
We want to try to aim for close to 300.
We want to double in size.
We're heavily pushing forexpansion, franchisees and
corporate stores.
We want to get into prime realestate, prime plazas, prime
shopping malls.
So that's kind of our goal forthe next few years.
Brian Sheehan (11:03):
What's the mix of those that you're going to be
opening?
What's the mix of franchiseversus corporate?
Jasmine Chin (11:09):
So we're a one-to-five model, so every five
franchises out store, onecorporate store will open.
If we're going into a newterritory, we try to have at
least one corporate store tostart off with, so that training
could be a lot easier for them.
Brian Sheehan (11:22):
That makes sense.
That's a great approach.
What are the growth goals forHappy Lemon over the next five
years?
Where do you see this heading?
Jasmine Chin (11:30):
Yeah.
So we want to be mainstream, wewant to target all audiences,
as this is hitting mainstreammarket.
We want to focus on all agegroups, all ethnicities, and I
believe that our products andour brand name and our cute
little logo is welcoming foreverybody.
Our cute little logo iswelcoming for everybody.
(11:51):
So you know, getting moremarket share going into more
prime real estate, being the topof the Boba chain brands and
really just blowing up thiswhole Boba industry and even not
focusing on Boba like justfresh ingredients, right.
So I know a lot of stores theyhave items that can last for
years, right.
What does that mean to you?
Like, high preservatives?
right, I'm not gonna be drinkingthat every day you know so we
(12:14):
make about 95% of our items inour own kitchen, not even
central kitchen, right.
So we believe in the products.
We want to see growth, we wantto saturate all markets, all
major cities and states, andthat's what we've been doing and
we're on the path to do so.
Brian Sheehan (12:30):
Where's your growth focused now, this year,
next year, 2025, 2026?
What markets are you guystargeting?
Jasmine Chin (12:39):
Yeah, so we want to target Southern California
because Northern California hasbeen what's popped off already.
East Coast we want to aim forEast Coast because it's pretty
West Coast heavy right now, sobringing it all to the East
Coast.
There's a few stores in theEast Coast, you know Chicago,
new York, but we want tosaturate the market and not just
have a few.
Brian Sheehan (12:59):
What's saturation look like?
How do you feel like whenyou've got enough?
And I know it depends onpopulation, but in a market like
Chicago, for example, how manystores would you picture?
Jasmine Chin (13:10):
So a very, very good example I would always like
to give is Northern Californiaright.
So Bay Area itself, 60 storesright.
No one really is going to drivemore than 10 minutes away for a
Happy Lemon, right.
It's more of a conveniencething.
So we want to saturate themarket, basically mirror how
NorCal did it.
Certain cities will need moreright.
(13:32):
For example, san Franciscoitself has three locations
within a mile and a half right,and that's just the nature of
San Francisco Nobody drives,there's no parking anywhere.
So you really have to targetwho's in within two to three
blocks from you, right.
But there's certain cities forexample I'm going to like,
burlingame or Foster City.
It's a small little town.
They don't need more than oneHappy Lemon there.
(13:53):
So it really depends on eachcity.
So when people are like what'sthe radius right, I can't really
give you a radius.
It just really depends.
Every city is so special, everycity is so different, the
culture is different.
Do they drive, do they walk?
I mean analyzing that's the funpart, right, of commercial real
estate.
Analyzing the communities, theneeds and wants is fascinating
(14:15):
and you just have to see like,oh, how many happy lemons does
this city need?
Brian Sheehan (14:19):
Well, so what are some of the key factors that
you consider when you'reevaluating a market and a
specific property?
Jasmine Chin (14:28):
So, first thing, I look at our neighbors right, so
we do well around food and goodanchor stores.
So either it's national foodchains or food halls, food
courts.
When people eat they want todrink something, right, so those
are really good.
We want to have an equal sharein local residential businesses
(14:51):
and also schools right, we don'twant to rely too heavily on one
thing versus the others, and wekind of learned that during the
pandemic.
So, during the pandemic, whathappened to all the locations in
financial district, for example?
Right, they were hurting.
But the locations inresidential areas, they rocketed
, they did double the sales.
(15:12):
And what about schools?
Right, they were hurting too.
College towns.
So it's nice to have thelocations where it's kind of
like equal split between thedifferent schools, hospitals,
residential and those stores.
They're fine.
No matter what, they alwayshave a very steady income.
They're a very steady store.
(15:33):
There's no up and downs really.
So those are really good.
But focusing on good anchorstores, right.
So either it's a good shoppingmall or a good grocery store.
People, after they shop forgroceries, they're thirsty, they
want to grab a drink, or theywant to grab a drink before they
go shopping.
So those are really good.
But mainly, you know, aroundfood, we do well around food.
Brian Sheehan (15:58):
How about fitness ?
I don't know why I'm thinkingthis goes well with fitness, but
is that a key tenet that you'dbe looking to be around?
Jasmine Chin (16:01):
Yeah, totally, fitness is good.
It goes well with fitness.
We're next to a few cycle barsfor a few locations.
We're next to 24-hour fitness.
Those are really great.
We actually do collabs with alot of them.
Like the Happy Lemon Hawaii, wedid a boba bootcamp collab with
the gym next to us, which wassuper fun.
How'd that work?
It was really fun.
(16:22):
We all worked.
We did a bootcamp camp class.
Everyone got boba after and,like, the owner of the gym loves
happy lemons, so they reachedout.
They're like hey, you know,wouldn't it be fun?
We did a collab.
Yeah, totally.
Like that's cool, like I loveworking out and to see both
worlds like kind of collide,it's like super, super cool oh,
I love it yeah so for anyonethat's not been inside one of
(16:44):
your stores.
Brian Sheehan (16:45):
What's unique about it?
What's going to jump out tosomeone as first timer?
Jasmine Chin (16:49):
Yeah, so we use a lot of technology behind our
operations and this is somethingthat my dad, maurice, he kind
of implemented a lot of thesethings to make the experience
for our customers more elevated,so he's also in IT himself, so
he wrote a lot of the programsfor Happy Lemon, catered to
(17:09):
Happy Lemon.
So, for example, we have aqueue chart right, so like if
your drink is being made rightnow, it'll show you your drink
the time, your ticket number onthe TV, right.
So he goes by silent operation,right.
You don't have to ask, hey, ismy drink ready?
You can just look on the boardand you'll be able to see.
There's also an app right thatwe have for the entire nation
(17:32):
actually, which is very hard ona level of a franchise level,
right.
So there's different ownersinvolved, but we have an app all
of our customers can use andredeem reward points on the app,
no matter which location you goto Hawaii, california, texas,
it doesn't matter.
You're able to send gift cardsalso to your friends through the
app and when you just go intothe store.
(17:52):
I mean we've been kind ofchanging the looks of the store
now.
So the new generation of thestore, it's a very fresh, clean
feel to it.
So we have our lemon dollsright when we have created and
catered to each state.
So, for example, the Hawaii onehas, like the lemon boy with a
surfboard right behind him.
(18:14):
You know, other states, likeTexas, has like a cowboy hat and
cowboy boots on the on thedolls.
So it's kind of cute.
You know, when people go todifferent states they kind of
take pictures with it.
It's kind of like a collectibleitem-ish feel to it.
And now I mean the newlocations look super nice Lots
of LED lights, fresh, clean.
It's just a yellow, white, veryclean feel to it, A very crisp,
(18:37):
minimalistic decor.
But that's kind of like thevibe that we're going for.
Brian Sheehan (18:41):
That Happy Lemon app is really impressive, I
guess I want to ask you a couplemore questions about where
you're going and what you'relooking for.
Are you taking any inlinespaces in shopping centers?
Jasmine Chin (18:52):
Definitely yeah.
So we have three models.
We have the kiosk model andthen we have the inline food
court kind of model with noseating, right, it's just shared
seating with other businesses.
And then we also have ourstores Right.
So it's just with your ownentrance and your own seating.
But inlines are great.
I always say inlines are great.
Or your own store is great aswell.
(19:13):
Kiosk unless it's in a very,very prime location and if the
owner has like a second store tosupport, it, is very hard to
have a kiosk as your first store.
You know, kiosks are like 100to 300 square feet and we make
all of our products in house.
We make our own sugar.
Even so, to have such a tightspace is nearly impossible.
(19:37):
So if you don't have, you know,the first store, it's really
hard to open up kiosk as yourfirst store without support.
Brian Sheehan (19:43):
Sure, that makes sense.
And then, for anyone that wantsto present a site to you and
your team, what's the best wayto do that?
Jasmine Chin (19:49):
Yeah, contact me, contact.
You can go on Happy Lemon USA'swebsite.
Yeah, and we're always lookingfor new opportunities, always
looking for new real estate, newlocations and also new
franchisees as well.
Brian Sheehan (20:04):
I'm curious, like what's your biggest challenge,
what's the biggest hurdle thatyou guys are facing?
And maybe it's specific to realestate.
Jasmine Chin (20:11):
but I mean real estate.
So far it's hard.
After COVID it's been hardbecause people are more cautious
, people are holding onto theirmonies, right.
So when people want to invest,when franchisees want to invest,
they're extra careful.
And when they have noexperience, or even if they do
(20:31):
have experience, for them tokind of say, okay, let me do
this, the process takes a lotlonger.
Maybe it'll take them a year tobe like, okay, I'm gonna do
this.
You know, before it was likeI'm gonna do it.
They kept rushing us, I'm gonnasign this in a few weeks,
versus now they're like I'm notgonna sign anything until I find
the perfect spot.
And as you know, brian, somepeople are so lucky where
(20:53):
they're like, oh, okay, a fewweeks, I found my perfect spot.
But most people take months,even sometimes years, to find
that perfect spot.
And with the whole economysituation and after COVID
situation, it made it even worse, right.
So it kind of drags on a lotlonger now, longer than we would
(21:13):
like it to drag on for.
Brian Sheehan (21:15):
For sure.
Have you changed anything thento help either speed up the
process or help your franchiseesaccess capital?
Help your franchisees accesscapital, or I mean, I've heard
some.
I was in Vegas, you know, forICSC and I just across the board
.
There was a lot of different.
What I thought were creativesolutions to try to help people
get through the process.
Jasmine Chin (21:35):
Yeah, so we are a part of the small business loans
, so we got a lot of peopleloans and they're familiar with
Happy Lemon as well now, so thatwas kind of helpful.
Brian Sheehan (21:46):
I've heard those loans, though nowadays are, you
know, it's 11, 12% right.
Jasmine Chin (21:51):
Yeah, it is higher .
But I mean people now are justless risky with everything and
even spending wise right,they're just more conservative.
I have friends in like the POSindustry and they're just like
oh my God, sales just everywhere, like all restaurants, like
bars, clubs, whatever it is.
It's just it just drops so muchand people aren't spending like
they used to spend anymore.
(22:11):
So that kind of makes it alittle hard, but luckily, like
Boba's, just a few dollars, soit's not like fine dining or
anything like that.
Brian Sheehan (22:18):
Yeah, I don't know if I've asked you before.
What's the average ticket priceat Happy Lemon?
Jasmine Chin (22:28):
It's about $10.
Okay, yeah, but that's justlike with a waffle and a drink
kind of thing, or like one drinksix, seven bucks.
Brian Sheehan (22:31):
You know I hear talk about McDonald's and
bringing back their value mealand stuff.
Are you guys really thatfocused on price?
Or, because you're so focusedon fresh and having quality
ingredients, you're justmaintaining your pricing as it
is?
Jasmine Chin (22:45):
so we've never, we were never above market value
ever okay we wanted to keep thisway because we wanted returning
customers and we wanted peopleto build this into their
lifestyle.
So we have the freshestingredients I can say that
amongst all the chains and I I'mpretty much a healthy person
too and I literally drink thislike all the time but we were
(23:08):
never above market value, but wehad the freshest ingredients.
But now, with inflation andeverything, we're still not
above market value.
So what we did was headquartersate some of the cost to help
out our franchisees, to help outour customers, but also we
can't keep doing that right.
So, like, for example,california, we're considered
(23:29):
fast food.
So our minimum wage got put to$20.
So I mean, even with the $20,we raised our prices, but even
compared to Jamba Juice JambaJuice is the same right, like a
smoothie, is like 12 bucks butcompared to like other boba
chains, smoothie shops, and sowe're still under market value
(23:50):
that's amazing, and a lot ofthat has to do with your supply
chain, right?
supply chain.
Yeah, we're verticallyintegrated as well.
Yeah, so we are our ownsuppliers, so that kind of helps
a lot also gotcha well, jasmine, it was great speaking with you
today.
Brian Sheehan (24:04):
Thank you for joining me on Retail Intel.
Jasmine Chin (24:07):
Thanks so much, Brian.
Brian Sheehan (24:10):
Be on the lookout for new Happy Lemon locations
opening near you and be sure tocheck them out on Instagram at
happylemonusa.
Whether you're an aspiring realestate mogul, a seasoned pro or
simply curious about the placeswhere we shop, dine, play and
work, this podcast is yourall-access pass to the world of
commercial real estate.
If you're interested in being apart of the Retail Intel
(24:32):
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Talk to you next time.
Welcome to Retail Intel, the podcast where we
dive deep into the dynamic worldof commercial real estate.
I'm your host, brian Sheehan,and I'm thrilled to be your
guide on this journey throughthe bustling streets of retail,
the aisles of shopping centersand the world of commercial
property investment.
With me today is Jasmine Chin,a managing member of Happy Lemon
(00:25):
USA.
Happy Lemon is a global teabrand with locations in 20
countries that offers refreshingand delectable beverages to tea
lovers worldwide and is growingquickly.
If you haven't heard of cheesetea yet, you're going to be
hearing a lot more about it soon.
Cheese tea has been explodingin popularity in Asia for the
past decade and is starting togain popularity here in the US.
(00:48):
Jasmine, welcome.
Jasmine Chin (00:50):
Thank you, Hi.
Thanks for having me, Brian.
Brian Sheehan (00:52):
Well, I'd love to start with your background.
How did you get into commercialreal estate?
Jasmine Chin (00:56):
Yeah, so I mean, I've always been fascinated by
analyzing each community'suniques needs and wants, so so
the diversity and marketdynamics across different
communities is incrediblyintriguing to me.
This interest in understandingand catering to these distinct
demands naturally led me tocommercial real estate and out
of college I worked for morelike a family commercial real
(01:20):
estate company where I was ableto engage with and impact
various markets directly.
So that was very interestingand additionally, you know,
commercial real estate offersopportunities to create and
transform spaces, very differentspaces that significantly
influence, you know, localcommunities and also economies
and the quality of life for alot of people.
So I'm also, you know, as I was, more engaged in commercial
(01:46):
real estate.
It was very interesting and I'mdrawn to the challenge of
identifying, like primelocations, for example, for
Happy Lemon, understandingmarket trends, market strategic
investments, even for bothbusinesses and communities and
landlords.
So the complexity of everythingis very interesting and all
(02:07):
these real estate projectsreally excite me.
Brian Sheehan (02:10):
And how did you come to find out about and join
Happy Lemon?
Jasmine Chin (02:14):
Joining Happy Lemon, so a lot of it was family
focused.
So I was lucky enough to beable to work with my family, so
it was a great journey.
I mean, my dad was heavilyinvolved.
At some point he was the CEO ofthe company and he kind of blew
up the expansion on his ownreally.
So that was incredible andhaving that support and guidance
(02:37):
from him was a really big thing.
So first he started off, youknow, in Cupertino, one little
tiny store probably the worstlocation ever because nobody
knew who we are, who we wereback then, you know.
So absolutely no parking.
It was probably five stepsbelow ground level, so like
(02:59):
visibility was at like,basically, zero.
And somehow he was able to kindof blow that one store up and as
the years gone by it was likeso much easier to find.
You know locations once youestablish a brand that's amazing
.
Brian Sheehan (03:14):
Well, so, happy lemon.
What is it?
What was the inspiration behindits creation?
Jasmine Chin (03:19):
yeah, so a lot of it.
We want to focus on freshingredients, right, right.
So the boba industry, the bobamarket, has been around for many
, many generations in Asia andit's slowly trending and coming
to the United States and, with alot of competition with a lot
of beverage chains, we want tofocus more on accessibility and
(03:41):
also how healthy the productsare right.
Accessibility and also howhealthy the products are right.
So if you're feeling somethingfresh like a fresh lemon, you
know green tea, fresh lemon,honey, green tea right, we have
our own farm right.
So we have our own fruits andwe import our fruits from Taiwan
, from our farms.
So we want to make sure ourcustomers are able to drink this
multiple times a week, it's notjust a once a month treat thing
(04:03):
where they feel guilty drinkingit so me I.
I love boba.
I drink this, maybe you know.
I want to say like four or fivetimes a week.
I've been doing it for years.
Brian Sheehan (04:11):
So focus on fresh ingredients.
You have your own farms.
I mean, like you said, it's avery competitive space.
What are some other things thathelp make Happy Lemon?
Jasmine Chin (04:22):
unique.
So our vision was to saturatemarkets right, so we are one of
the biggest international bobachain and we want to saturate
each market.
So our vision and goal in theBay Area was to have one
everywhere.
So we popped up about 60locations in just a few years
and that's what we're doingright now in all major cities
and states right, and we wantthis to be a convenience for
(04:45):
everyone.
We want brand awareness.
If you are traveling from Japan, if you're traveling from
Taiwan, you're in Hawaii, you'rein Texas, you're in California,
you recognize this brand andyou're able to just kind of
trust the brand, trust theproducts and have it be like a
convenience thing for you trustthe products and have it be like
a convenience thing for you.
Brian Sheehan (05:06):
So not every landlord might be familiar with
Boba Tea or Happy Lemonnecessarily, depending on what
part of the country I'm in.
Why is that a great use for aretail shopping center.
Jasmine Chin (05:21):
You know that was one of the struggles throughout
the years.
You know, getting into primereal estate, prime shopping
centers with prime anchor stores.
So a lot of it kind of speaksfor itself.
In terms of our flagshiplocations.
You know where we're able to gointo big developers.
You know, like you guys right,phillips Edison, you guys, if
we're in Alamana Mall, if we'reat the Salesforce Transbay
(05:42):
Center, you guys have that sortof trust.
Right, your portfolio, you knowwhere are your other stores,
what are your numbers, how fastare you guys expanding?
Right, and I'm sure if we'retrying to get into a local
market that you guys are in aswell, you guys will check out
the store.
Right, how's grand opening?
What are the lines like?
What are the reviews like?
Even if the landlords areknowledgeable or they don't know
(06:05):
about boba or anything likethat, they do their due
diligence and having a goodportfolio matters along with
also like word of mouth, right?
you know, ask around.
Hey, are you aware of this?
Usually it's the youngergeneration that knows as well.
So a lot of landlords, will youknow, ask their kids, ask
whoever it is, and that kind ofhelps as well.
Definitely, I a lot oflandlords.
Brian Sheehan (06:26):
Will you know, ask their kids, ask whoever it
is, and that kind of helps aswell.
Definitely, I ask my daughterall the time about kind of
what's hip and happening, what'sinnovative, fast growing, and
this is a use category thatseems to kind of constantly
reappear.
Jasmine Chin (06:38):
Right yeah, a lot of malls and trending malls.
Now they want to target Gen Z.
They want to target what's hip,what's new, not like the old
school brands or anything likethat.
They want to gear towardswhat's trending right now.
Either it's on TikTok or likeInstagram.
Brian Sheehan (06:54):
Whatever it is, there's a big influence on that
as well but this has been aroundto your point for what decades
in Asia, and it's it's not justa fad right, right, yeah, no.
Jasmine Chin (07:06):
Boba tea drinking culture, beverage drinking
culture has been around for manygenerations.
I was just in Asia a few daysago and I kid you not like boba
chains.
They're literally back to backto back in a row.
Maybe there's like five on oneblock and the next block you go,
there's probably three, andit's just a culture.
It's people drinking one to twotimes a day.
(07:27):
They're thirsty, and it's beena culture and it's becoming a
culture.
Right now I can see it in theUnited States.
Brian Sheehan (07:34):
Of course, use restrictions, exclusives kind of
help protect or prevent thatfrom happening in a single
shopping center.
But do you see a similar thinghappening in the US?
Are you seeing a lot moregrowth and development beyond
where you're growing with HappyLemon?
Jasmine Chin (07:52):
Yeah, I mean exclusives.
Yes, we have a lot of tea andcoffee exclusives that kind of
do block us from going intocertain malls and plazas, but
I've that wasn't really in thebeginning I've noticed there's a
trend where landlords kind ofhold off on exclusives now
because they don't want to kindof tie themselves into a kind of
(08:15):
like a hole.
You know but you can correct meif I'm wrong but that's kind of
like the trend that I'mnoticing, like before there were
lots of tea exclusives, lots ofjuice, juice exclusives.
And I mean, with our varietyand our mass variety and menu
there's also some ways to getaround it, because if you say
we're a coffee shop, no, we'renot.
Maybe we have one item right.
(08:36):
So if you say we're a tea shop,not more than 50% of our menu
is fully tea.
We have smoothies, we haveslushies, and you really can't
also say we're a juice shopbecause we also have tea.
So I mean, the variety of ourmenu kind of helps also and it's
kind of also like, okay, are wea juice shop or a tea shop, so
(08:57):
we have something for everyone,kind of.
So it's kind of nice.
Brian Sheehan (09:01):
For our listeners who aren't maybe familiar with
Boba Tea or Happy Lemon.
I kind of want to talk realquickly about site criteria and
where you're growing and thosethings.
But I guess, first of all,what's your square foot size
range?
What's your sweet spot sizewise?
Jasmine Chin (09:17):
Yeah, so our sweet spot is about 1,200 to 1,400
square feet.
Anything bigger, fine, we'lljust have more storage room.
But we want to keep ourcustomer area cozy and welcoming
, right.
So if we have, for example,some states like Texas, right,
Much bigger land, we get 2,000,2,500.
(09:40):
Sometimes we're locked intobigger spaces because it's in
prime locations, totally fine.
But we want to make sure thefront of the house is just a few
tables.
We don't want maybe it's justopening, right and it's slow the
first two hours.
We want to make sure thatwhoever our first customer is
coming in or whoever's walkingby, they don't feel intimidated,
(10:02):
like why is it so empty?
It feels too airy.
So we want to make sure, nomatter how big the size is, the
front is going to.
We're just going to keep it atjust a few tables, make it nice
and cozy.
But ideally we want about like1,200 square feet to 1,400
square feet.
Brian Sheehan (10:16):
Okay, and that's great that you can flex where
you need to be, in the rightreal estate.
Jasmine Chin (10:24):
What's the current number of open locations?
In the US, we have about 120stores right now, wow.
Brian Sheehan (10:27):
And how many are you opening this year or will be
open by the end of 2024?
Jasmine Chin (10:33):
So we're planning on 20 more and with the speed of
growth, we're trying toobviously double and triple in
the next few years.
Brian Sheehan (10:42):
Wow, so next year , end of 2025, you'll have how
many open.
Jasmine Chin (10:46):
We want to try to aim for close to 300.
We want to double in size.
We're heavily pushing forexpansion, franchisees and
corporate stores.
We want to get into prime realestate, prime plazas, prime
shopping malls.
So that's kind of our goal forthe next few years.
Brian Sheehan (11:03):
What's the mix of those that you're going to be
opening?
What's the mix of franchiseversus corporate?
Jasmine Chin (11:09):
So we're a one-to-five model, so every five
franchises out store, onecorporate store will open.
If we're going into a newterritory, we try to have at
least one corporate store tostart off with, so that training
could be a lot easier for them.
Brian Sheehan (11:22):
That makes sense.
That's a great approach.
What are the growth goals forHappy Lemon over the next five
years?
Where do you see this heading?
Jasmine Chin (11:30):
Yeah.
So we want to be mainstream, wewant to target all audiences,
as this is hitting mainstreammarket.
We want to focus on all agegroups, all ethnicities, and I
believe that our products andour brand name and our cute
little logo is welcoming foreverybody.
Our cute little logo iswelcoming for everybody.
(11:51):
So you know, getting moremarket share going into more
prime real estate, being the topof the Boba chain brands and
really just blowing up thiswhole Boba industry and even not
focusing on Boba like justfresh ingredients, right.
So I know a lot of stores theyhave items that can last for
years, right.
What does that mean to you?
Like, high preservatives?
right, I'm not gonna be drinkingthat every day you know so we
(12:14):
make about 95% of our items inour own kitchen, not even
central kitchen, right.
So we believe in the products.
We want to see growth, we wantto saturate all markets, all
major cities and states, andthat's what we've been doing and
we're on the path to do so.
Brian Sheehan (12:30):
Where's your growth focused now, this year,
next year, 2025, 2026?
What markets are you guystargeting?
Jasmine Chin (12:39):
Yeah, so we want to target Southern California
because Northern California hasbeen what's popped off already.
East Coast we want to aim forEast Coast because it's pretty
West Coast heavy right now, sobringing it all to the East
Coast.
There's a few stores in theEast Coast, you know Chicago,
new York, but we want tosaturate the market and not just
have a few.
Brian Sheehan (12:59):
What's saturation look like?
How do you feel like whenyou've got enough?
And I know it depends onpopulation, but in a market like
Chicago, for example, how manystores would you picture?
Jasmine Chin (13:10):
So a very, very good example I would always like
to give is Northern Californiaright.
So Bay Area itself, 60 storesright.
No one really is going to drivemore than 10 minutes away for a
Happy Lemon, right.
It's more of a conveniencething.
So we want to saturate themarket, basically mirror how
NorCal did it.
Certain cities will need moreright.
(13:32):
For example, san Franciscoitself has three locations
within a mile and a half right,and that's just the nature of
San Francisco Nobody drives,there's no parking anywhere.
So you really have to targetwho's in within two to three
blocks from you, right.
But there's certain cities forexample I'm going to like,
burlingame or Foster City.
It's a small little town.
They don't need more than oneHappy Lemon there.
(13:53):
So it really depends on eachcity.
So when people are like what'sthe radius right, I can't really
give you a radius.
It just really depends.
Every city is so special, everycity is so different, the
culture is different.
Do they drive, do they walk?
I mean analyzing that's the funpart, right, of commercial real
estate.
Analyzing the communities, theneeds and wants is fascinating
(14:15):
and you just have to see like,oh, how many happy lemons does
this city need?
Brian Sheehan (14:19):
Well, so what are some of the key factors that
you consider when you'reevaluating a market and a
specific property?
Jasmine Chin (14:28):
So, first thing, I look at our neighbors right, so
we do well around food and goodanchor stores.
So either it's national foodchains or food halls, food
courts.
When people eat they want todrink something, right, so those
are really good.
We want to have an equal sharein local residential businesses
(14:51):
and also schools right, we don'twant to rely too heavily on one
thing versus the others, and wekind of learned that during the
pandemic.
So, during the pandemic, whathappened to all the locations in
financial district, for example?
Right, they were hurting.
But the locations inresidential areas, they rocketed
, they did double the sales.
(15:12):
And what about schools?
Right, they were hurting too.
College towns.
So it's nice to have thelocations where it's kind of
like equal split between thedifferent schools, hospitals,
residential and those stores.
They're fine.
No matter what, they alwayshave a very steady income.
They're a very steady store.
(15:33):
There's no up and downs really.
So those are really good.
But focusing on good anchorstores, right.
So either it's a good shoppingmall or a good grocery store.
People, after they shop forgroceries, they're thirsty, they
want to grab a drink, or theywant to grab a drink before they
go shopping.
So those are really good.
But mainly, you know, aroundfood, we do well around food.
Brian Sheehan (15:58):
How about fitness ?
I don't know why I'm thinkingthis goes well with fitness, but
is that a key tenet that you'dbe looking to be around?
Jasmine Chin (16:01):
Yeah, totally, fitness is good.
It goes well with fitness.
We're next to a few cycle barsfor a few locations.
We're next to 24-hour fitness.
Those are really great.
We actually do collabs with alot of them.
Like the Happy Lemon Hawaii, wedid a boba bootcamp collab with
the gym next to us, which wassuper fun.
How'd that work?
It was really fun.
(16:22):
We all worked.
We did a bootcamp camp class.
Everyone got boba after and,like, the owner of the gym loves
happy lemons, so they reachedout.
They're like hey, you know,wouldn't it be fun?
We did a collab.
Yeah, totally.
Like that's cool, like I loveworking out and to see both
worlds like kind of collide,it's like super, super cool oh,
I love it yeah so for anyonethat's not been inside one of
(16:44):
your stores.
Brian Sheehan (16:45):
What's unique about it?
What's going to jump out tosomeone as first timer?
Jasmine Chin (16:49):
Yeah, so we use a lot of technology behind our
operations and this is somethingthat my dad, maurice, he kind
of implemented a lot of thesethings to make the experience
for our customers more elevated,so he's also in IT himself, so
he wrote a lot of the programsfor Happy Lemon, catered to
(17:09):
Happy Lemon.
So, for example, we have aqueue chart right, so like if
your drink is being made rightnow, it'll show you your drink
the time, your ticket number onthe TV, right.
So he goes by silent operation,right.
You don't have to ask, hey, ismy drink ready?
You can just look on the boardand you'll be able to see.
There's also an app right thatwe have for the entire nation
(17:32):
actually, which is very hard ona level of a franchise level,
right.
So there's different ownersinvolved, but we have an app all
of our customers can use andredeem reward points on the app,
no matter which location you goto Hawaii, california, texas,
it doesn't matter.
You're able to send gift cardsalso to your friends through the
app and when you just go intothe store.
(17:52):
I mean we've been kind ofchanging the looks of the store
now.
So the new generation of thestore, it's a very fresh, clean
feel to it.
So we have our lemon dollsright when we have created and
catered to each state.
So, for example, the Hawaii onehas, like the lemon boy with a
surfboard right behind him.
(18:14):
You know, other states, likeTexas, has like a cowboy hat and
cowboy boots on the on thedolls.
So it's kind of cute.
You know, when people go todifferent states they kind of
take pictures with it.
It's kind of like a collectibleitem-ish feel to it.
And now I mean the newlocations look super nice Lots
of LED lights, fresh, clean.
It's just a yellow, white, veryclean feel to it, A very crisp,
(18:37):
minimalistic decor.
But that's kind of like thevibe that we're going for.
Brian Sheehan (18:41):
That Happy Lemon app is really impressive, I
guess I want to ask you a couplemore questions about where
you're going and what you'relooking for.
Are you taking any inlinespaces in shopping centers?
Jasmine Chin (18:52):
Definitely yeah.
So we have three models.
We have the kiosk model andthen we have the inline food
court kind of model with noseating, right, it's just shared
seating with other businesses.
And then we also have ourstores Right.
So it's just with your ownentrance and your own seating.
But inlines are great.
I always say inlines are great.
Or your own store is great aswell.
(19:13):
Kiosk unless it's in a very,very prime location and if the
owner has like a second store tosupport, it, is very hard to
have a kiosk as your first store.
You know, kiosks are like 100to 300 square feet and we make
all of our products in house.
We make our own sugar.
Even so, to have such a tightspace is nearly impossible.
(19:37):
So if you don't have, you know,the first store, it's really
hard to open up kiosk as yourfirst store without support.
Brian Sheehan (19:43):
Sure, that makes sense.
And then, for anyone that wantsto present a site to you and
your team, what's the best wayto do that?
Jasmine Chin (19:49):
Yeah, contact me, contact.
You can go on Happy Lemon USA'swebsite.
Yeah, and we're always lookingfor new opportunities, always
looking for new real estate, newlocations and also new
franchisees as well.
Brian Sheehan (20:04):
I'm curious, like what's your biggest challenge,
what's the biggest hurdle thatyou guys are facing?
And maybe it's specific to realestate.
Jasmine Chin (20:11):
but I mean real estate.
So far it's hard.
After COVID it's been hardbecause people are more cautious
, people are holding onto theirmonies, right.
So when people want to invest,when franchisees want to invest,
they're extra careful.
And when they have noexperience, or even if they do
(20:31):
have experience, for them tokind of say, okay, let me do
this, the process takes a lotlonger.
Maybe it'll take them a year tobe like, okay, I'm gonna do
this.
You know, before it was likeI'm gonna do it.
They kept rushing us, I'm gonnasign this in a few weeks,
versus now they're like I'm notgonna sign anything until I find
the perfect spot.
And as you know, brian, somepeople are so lucky where
(20:53):
they're like, oh, okay, a fewweeks, I found my perfect spot.
But most people take months,even sometimes years, to find
that perfect spot.
And with the whole economysituation and after COVID
situation, it made it even worse, right.
So it kind of drags on a lotlonger now, longer than we would
(21:13):
like it to drag on for.
Brian Sheehan (21:15):
For sure.
Have you changed anything thento help either speed up the
process or help your franchiseesaccess capital?
Help your franchisees accesscapital, or I mean, I've heard
some.
I was in Vegas, you know, forICSC and I just across the board
.
There was a lot of different.
What I thought were creativesolutions to try to help people
get through the process.
Jasmine Chin (21:35):
Yeah, so we are a part of the small business loans
, so we got a lot of peopleloans and they're familiar with
Happy Lemon as well now, so thatwas kind of helpful.
Brian Sheehan (21:46):
I've heard those loans, though nowadays are, you
know, it's 11, 12% right.
Jasmine Chin (21:51):
Yeah, it is higher .
But I mean people now are justless risky with everything and
even spending wise right,they're just more conservative.
I have friends in like the POSindustry and they're just like
oh my God, sales just everywhere, like all restaurants, like
bars, clubs, whatever it is.
It's just it just drops so muchand people aren't spending like
they used to spend anymore.
(22:11):
So that kind of makes it alittle hard, but luckily, like
Boba's, just a few dollars, soit's not like fine dining or
anything like that.
Brian Sheehan (22:18):
Yeah, I don't know if I've asked you before.
What's the average ticket priceat Happy Lemon?
Jasmine Chin (22:28):
It's about $10.
Okay, yeah, but that's justlike with a waffle and a drink
kind of thing, or like one drinksix, seven bucks.
Brian Sheehan (22:31):
You know I hear talk about McDonald's and
bringing back their value mealand stuff.
Are you guys really thatfocused on price?
Or, because you're so focusedon fresh and having quality
ingredients, you're justmaintaining your pricing as it
is?
Jasmine Chin (22:45):
so we've never, we were never above market value
ever okay we wanted to keep thisway because we wanted returning
customers and we wanted peopleto build this into their
lifestyle.
So we have the freshestingredients I can say that
amongst all the chains and I I'mpretty much a healthy person
too and I literally drink thislike all the time but we were
(23:08):
never above market value, but wehad the freshest ingredients.
But now, with inflation andeverything, we're still not
above market value.
So what we did was headquartersate some of the cost to help
out our franchisees, to help outour customers, but also we
can't keep doing that right.
So, like, for example,california, we're considered
(23:29):
fast food.
So our minimum wage got put to$20.
So I mean, even with the $20,we raised our prices, but even
compared to Jamba Juice JambaJuice is the same right, like a
smoothie, is like 12 bucks butcompared to like other boba
chains, smoothie shops, and sowe're still under market value
(23:50):
that's amazing, and a lot ofthat has to do with your supply
chain, right?
supply chain.
Yeah, we're verticallyintegrated as well.
Yeah, so we are our ownsuppliers, so that kind of helps
a lot also gotcha well, jasmine, it was great speaking with you
today.
Brian Sheehan (24:04):
Thank you for joining me on Retail Intel.
Jasmine Chin (24:07):
Thanks so much, Brian.
Brian Sheehan (24:10):
Be on the lookout for new Happy Lemon locations
opening near you and be sure tocheck them out on Instagram at
happylemonusa.
Whether you're an aspiring realestate mogul, a seasoned pro or
simply curious about the placeswhere we shop, dine, play and
work, this podcast is yourall-access pass to the world of
commercial real estate.
If you're interested in being apart of the Retail Intel
(24:32):
podcast, connect with me onLinkedIn or send a message to
nationalaccounts atphillipsedisoncom.
If you want to hear more aboutnew and expanding brands, keep
tuning in to Retail Intel andplease subscribe, follow, like
and repost.
Keep tuning in to Retail Inteland please subscribe, follow,
like and repost.
Talk to you next time.
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