Gong Cha Franchise Review: Cost, Requirements,Fee, and Profit

 

Gong cha tea franchise is a global business opportunity. In 2015, the company began franchising operations. The Gong Cha’s success can be explained by an extraordinary idea to combine authenticity with a modern franchise business model. Furthermore, the franchisor has extensive experience running a profitable and proven business prototype, which they share with their franchisees. 

This tea is sourced from the best Taiwanese tea estates, and it comes with its signature milk foam topping. Not only that, but Other items include freshly brewed tea and pearls (tapioca) that are cooked to perfection every four hours. The company’s strict quality control code ensures that only the highest quality ingredients are used. So, if you’re looking for a quick bubble tea franchise opportunity, take a look at the information below.

 

 

What is Gong Cha Bubble tea?

Gong Cha, a Taiwan-based bubble tea drink company, was founded in 2006 in Kaohsiung, Taiwan, and is positioned in the bubble tea industry, which is an entertainment drink for people of all ages. The brand name is made up of the Chinese characters “gong (贡),” which means contribution or tribute, and “cha (茶),” which means to tea, and it translates to “Tribute tea for the Emperor.” The brand offers approximately sixty different high-quality and healthy beverage options, which are divided into seven categories: house specials, brewed tea, milk tea, “Creative Mix,” coffee, “Healthy Series,” and ice smoothies. 

It follows a strict quality control code to ensure that only the best ingredients are used. This franchise has a consistent product innovation culture. When new franchise joins the company, they are given training and assistance with all business processes at a low cost. With such a strong tradition of excellence, you can join a great brand with limitless opportunities.

 

Is Gong Cha A franchise opportunity? 

From 2020 to 2026, the bubble tea industry is expected to grow at an 8.9% compound annual growth rate (CAGR). The food and beverage industry generates a total of $164 billion in value-added. Gong Cha first appeared in the United States in 2013. It has grown and gained acceptance steadily since then. Following its initial expansion to Hong Kong the same year it was founded, Gong Cha began expanding internationally in 2012, including South Korea, Australia, and the United States.

Gong Cha has over 1,650 cafes in 20 different countries. Currently, the majority of stores in the United States are located in the Northeast and the South. It has now gone global, with a presence in several countries, including the United States. Gong Cha franchisees must compete with businesses that sell tea drinks, blended juice drinks, smoothies, and other similar products.

 

 

Facts That Nobody Told You About Gong Cha

1. It is a popular and popular Taiwanese tea franchise with over 2,000 locations worldwide.

2. Gong Cha is known for its unique and flavorful teas.

3. Gong Cha is also known for its generous portions and affordable prices.

4. Gong Cha has a loyal following, and its teas are often recommended by tea experts.

5. Gong Cha’s tea franchise has been growing rapidly, and it is estimated that the company will be worth over $1 billion.

 

Gong Cha Franchise Review and Information
Industry Type		Food Franchise Opportunities
Sub Category		Bubble Tea Franchises
Year Established		2006
Company Name		Gong cha Global Ltd
Founder/Management Head		Martin Berry, Global CEO
Franchising Started		2009
Employees at Company H.O		More than 50
Franchise Expansion Plan		United States, Canada, and Taiwan
Number of Units		2,022 (as of 2023)
Number of Franchise Units		1,661
Social Media Handles		Facebook
		Twitter
		Youtube
		Instagram
Company Office location		c/o TA Associates, 200 Clarendon St., #5600Boston, MA 02116

 

Gong Cha Franchise Requirements

 

1. Franchisees must be thrilled to be a part of a growing industry and to be associated with a leading brand.

2. The candidate must be able to capitalize on their entrepreneurial drive using a globally proven system.

3. Determined and goal-oriented

4. Willing to go above and beyond for their visitors

5. Committed to providing guests with premium bubble tea

6. Dedicated to gong cha service

7. Recognizes industry opportunities

 

 

How much does a Gong Cha franchise cost

 

In the United States, a standard Gong Cha bubble tea franchise in the United States will cost between $177,430 – $335,400. 

The standard fee is $41,000. The royal fee will be approximately 5.5% of gross sales. The advertising and marketing fee will be up to 2% of the gross revenue. 

• Gong Cha Master Franchise Cost is  $188,200 and $684,500, 

• Gong Cha Share is  $115,000 and $515,000 

• Royalty Share to Gong Cha is 3% out of 5.5 % Royalty fees

The cost to franchise a Gong Cha for smaller kiosk concepts can start as low as $3,000, and for a full-service restaurant can reach up to $ 1 million.

 

Gong Cha Initial and On-Going Franchise Cost
Gong Cha Franchise Fee	$41,500
Gong Cha Franchise Cost	$177,430 – $335,400
Royalty Fee	5.5%
Advertising Fee	Up to 2%
Term of Agreement	10 years
Is the franchise term renewable?	Yes
Renewable Franchise Fees	50% of Initial Franchise fees

 

Gong Cha Training To Franchises

Gong Cha offers specialized training in critical areas of its operations. The initial training program includes 19 hours of classroom instruction and 111 hours of on-the-job training, and franchisees must complete a comprehensive training program. Training is also accompanied by a quarterly audit system. This aids in the quality and efficiency of store operations. The training is as per the franchise training manual.

 

Gong Cha Bubble Tea Operations and Support

It has created a tried-and-true franchise system that will support you in every way. The company offers you an event support system. As a franchisee, you can help promote your business by using a centralized marketing strategy as well as localized marketing. Raw materials are supplied to franchise outlets by a dedicated logistics department. Local warehousing reduces inventory delivery time, thereby increasing cost efficiency.

 

 

What is the Gong Cha Term of Agreement and Renewal?

The Gong Cha franchise’s initial term length is 10 years or 5 years. If franchisees are performing as expected, they are eligible for renewal. Existing franchise owners can renew for an additional ten years or five years during the renewal process.

 

Does Gong Cha provide Financial Assistance to Franchises?

The firm does not offer direct financing. The franchisor cannot provide any lease or note obligation in exchange for the franchisee guarantee. As long as the company has an investor relationship, third-party financing can be provided to cover start-up costs, inventory, equipment, payroll, and accounts receivable. SBA financing for the purchase of a franchise may be available.

It is approved by the Small Business Administration and is listed in their franchise directory.

Before you buy this, I strongly recommend that you explore franchise insurance and franchise loan options. The franchise financing options can be explored on websites such as OnDeck, SmartBiz, ApplePie Capital, credibility, and Funding Circle. Some good franchise insurance options include Nationwide, Travelers, Liberty Mutual, Progressive, State Farm, Hiscox, and The Hartford.

 

Pros & Cons of Gong Cha bubble tea Franchises

When thinking about taking the plunge and opening your own, there are a few things to keep in mind. Here are some pros and cons to consider:

 

Pros of owning a Gong Cha franchise 

1. Rapidly Expanding Beverage Market

2. The franchises receive multifaceted support

3. Tea is made with high-quality ingredients.

4. Available master franchise opportunity

5. Establishing a supply chain will aid owners’ operational ease.

6. 600 possible drink combinations provide customers with a diverse range of options.

 

Cons of owning a Gong Cha franchise 

1. Marketing and royalty fees are higher in comparison.

2. A wide range of menu options can make store operations difficult.

3. The franchise fee varies according to location.

 

 

How much do Gong Cha franchise owners make?

There is no definitive answer to this question as it depends on a variety of factors including the amount of time and effort a franchise owner puts into the business, the location and size of the franchise, and the number of open locations. However, a typical starting salary for this owner is around $50,000, and the average salary can range from $70,000 to $100,000.

 

What is Gong Cha bubble tea franchise profit?

It has not shared the Average Unit Volumes or franchise profit in Item 19 of the latest franchise disclosure document.

 

Expected Annual Gong Cha Unit Sales
Average Per Product	$ 4.0
Daily Products Sold	250
Expected Daily Sales	$ 1000
Expected Weekly Sales	$7000
Expected Weekly Sales	$ 30,000
Expected Annual Unit Sales	$ 360,000

 

We shall estimate this Gong Cha franchise profit and years to recoup the investment (ROI).

 

AUV	Estimated Annual Profit (12.5%)	Estimated Annual Profit (15%)	Estimated Annual ProfitProfit (18%)
$ 360,000	$ 45,000	$ 54,000	$ 64,800
Recoup $376,400	8.36 years	7 years	5.8 years

 

The estimated profit is in the range of $ 45,000 to $ 64,800 and it will take 5.5 to 8 years to recoup the investment. As per industry standards, it is a very high term to get a return on the franchise investment.

 

Are the Gong Cha franchises profitable?

 

Yes, Gong Cha franchises are profitable and as per our assumptions and estimates above.

I will reach out to Gong Cha’s management team to get these sales figures and update this article accordingly. You can also ask current franchisees of Gong Cha for their franchise’s review and input on revenue and profit.

 

Gong Cha franchise owners’ reviews

Its reviews are positive, with many customers praising the tea and the unique brewing methods. Some reviewers note that the tea can be a bit expensive, but overall most reviewers are happy with their experience.

I always advise my readers to visit and meet Gong Cha’s current franchise owners to ask questions and reviews.

Below are a few franchisee reviews from the Gong Cha website, I request the existing franchises to comment on this article with your feedback and reviews.

 

 

Gong Cha Franchise Rankings

It is a popular fitness franchise with locations in many major U.S. cities. It is:

 

Franchise Deck Analysis and Overview

Since its inception as a franchise in 2013, Gong Cha has grown to over 1600 locations. The expected market for bubble tea is rapidly expanding, as is this type of tea business. One of the best tea franchises was taken by the Gong Cha. More than 600 teas are available on their menu, allowing customers to customize their tea experience with the flavors of Taiwan. Gong cha sub-franchisees benefit from their premium products, brand commitment to service, and the company’s franchising system built on quality above all else from Asia to the United States.

Outside of in-store opportunities, sales opportunities exist. As a result, Gong Cha provides franchisees with an events support system to help them capitalize on available opportunities. Feedback is critical for franchise operations. Gong Cha understands this and handles all dispatch complaints and issues. Gong Cha franchises promote your business as a franchisee by using a centralized marketing strategy as well as localized marketing. 

As a result, your company will receive the recognition it deserves. In the logistics department, Gong Cha is in charge of streamlining raw material supply to franchise outlets. Overall, I believe this is a fantastic opportunity to seize if you are interested in a bubble tea franchise.

On the other hand, I found the Gong Cha Bubble tea franchise for sale at BizQuest. The Gong Cha franchise resale price is $ 99,000 and the annual revenue of $ 220,000. The cash flow is $ 50,000, which is 22% and it is above our estimated Gong cha franchise profit margin of 12.5 to 18%.

This seems to me like a Kiosk or in-store location with low franchise costs and ongoing costs. This franchise business is based in Gwinnett County, U.S. state of Georgia.

 

 

Competition Analysis and Alternatives of Gong Cha Franchising

 

	Cost to Franchise	Fran Fees	Royalty + Ad fees	Expected Profit	Recoup of Capital	FD Rating
Sharetea franchise	$386,900 to $492,200	$ 48,000	6%+ 2%	$ 45,000 to$ 64,800	5.8 to 8.3 years	3.7/5.0.
Ding Tea Franchise	$123,000to $422,000	$ 20,000	4%+ 2%	$ 57,600	6 to 8 years	3.3/5.0.
Kung Fu Tea Franchise	$124,050 to $428,050	$37,000	4% +2%	$ 65,000- $ 100,000	4 to 6 years	3.5/5.0
Boba Time Tea Franchise	$389,100 to $531,700	$ 40,000	5% +2%	$ 96,867 to            $ 134,123	3 to 5.5 years	4.0/5.0.
Gong Cha Franchise	$177,430 to$335,400	$41,500	5.5% + 2%	$ 45,000 to $ 64,800	6 to 9 years	3.7/5.0.
Happy Lemon Franchise	$309,000 to $509,000.	$25,000 to$40,000.	7% + 2%	$ 50,625 to$ 72,900	6 to 9 years	3.6/5.0.

 

The rating for the Gong Cha franchising is 3.7/5.0.

 

 

Conclusion

 

As an appealing franchise opportunity, Gong Cha is rapidly expanding in the bubble tea industry in the United States. As one of the industry’s most well-known bubble tea brands, Gong Cha can help you build a more solid customer base. Despite the low initial investment, the rewards are not as promising if you plan to invest for a short period. However, we expect Gong Cha to provide a high return on investment in the long run.

Entrepreneurs who want to open a franchise in the bubble tea franchise opportunities categories can look at 

1. Kung Fu Tea Franchise 
2. Boba Time Franchise
3. Happy Lemon Franchise 
4. Sharetea Franchise 
5. Black Rifle Coffee Franchise
6. Tropical Smoothie Cafe Franchise
7. Ding Tea Franchise
8. Best Bubble Tea Franchise
9. Clean Juice Franchise
10. Moge Tee Franchise
11. Teaspoon franchise

 

Synopsis of this article All About Gong Cha franchises.