With its origins in Taiwan and Hong Kong, the milk tea craze has formally made its technique to the US with the trade projections of a compound annual progress fee (or CAGR) of 8.9% by way of 2030. One milk tea model that’s been gaining traction in United States and around the globe is Gong Cha. Consider it or not, this model already has greater than 1,900 places globally because it was based in 2006.
How a lot does it price to open Gong Cha? To franchise this milk tea chain, you’ll want a liquid capital of $150,000 to $2,000,000 and a internet value of $300,000 – $4,000,000. The funding vary to start out a Gong Cha franchise is $177,430 – $335,400 with a franchise charge of $41,500.
On this publish, I overview the benefits and challenges in entrance of Gong Cha as a enterprise alternative in the US. Click on right here to take a 7-minute franchise quiz to be paired with a bubble tea alternative that matches your funding degree and private curiosity.
Monetary Necessities and Charges
Under are the charges and bills to anticipate once you franchise Gong Cha:
| Charges / Bills | Monetary Quantity |
| Liquid Capital | $150,000 to $2,000,000 |
| Internet Price | $300,000 to $4,000,000 |
| Whole Funding | $177,430 to $335,400 |
| Franchise Price | $41,500 |
Different charges to anticipate are their royalty charge which is 5.5% of gross sales and their advertising and marketing and promoting charge which is 1% of gross sales. The time period of settlement to run a Gong Cha franchise is 5 to 10 years.
Common Gross sales / Income per Yr
In line with studies, Gong Cha has reached over $380,434,326 in international gross sales. At current, there is no such thing as a official report as to how a lot Gong Cha’s U.S. gross sales. Preserve this in thoughts earlier than investing in the US.
As you undergo franchise interview course of make certain to get details about the income models in the US are producing. If doable, I counsel getting details about income numbers from quite a lot of places to gauge success in quite a lot of areas. In spite of everything, the annual income of a franchise unit working in Taiwan might be very totally different than models promoting in Texas.
Gong Cha Franchise Information
| Whole Items | 1,900 (190 U.S.A.) |
| Included Title | Gong Cha |
| Franchising Since | 2009 |
| Business | Milk Tea |
| Subsector | Drinks |
Gong Cha originated in Kaohsiung, Taiwan in 1996 by Huang and Wu. The identify of the model interprets to “tribute tea for the emperor” which may additionally imply that Gong Cha serves solely the best and highest high quality tea match sufficient for royalty.
The menu at Gong Cha consists of brewed teas comprised of inexperienced, black, oolong or earl gray. They’ve the essential milk tea, fruit teas, milk foam sequence (which incorporates milk and foam), slushed milk and fruit teas, tea lattes, and their espresso sequence. Their toppings embody the traditional pearls or boba, coconut jelly, pudding, natural jelly, ai-yu jelly, basil seeds, and Oreo crumbs. You may as well change the sugar grade from 100 being the common sugar content material they normally put, to 70%, 50%, 30% or right down to no sugar in any respect.
You Would possibly Like: Is the $790K Price for Coco Contemporary Tea & Juice Franchise Price It?
To franchise Gong Cha, you should full a franchise software kind right here. As soon as the appliance is acquired and reviewed by the corporate, you’ll obtain a name and have an preliminary dialogue with a franchise consultant. You’ll undergo a qualification course of which includes Gong Cha checking the paperwork you may be submitting in addition to focus on the operations of the enterprise.
If every thing goes nicely and you discover that each one your questions have been met with good solutions, you’ll undergo their franchise settlement signing, location approval, after which a format overview. Afterwards you’ll undergo coaching, buying of kit and stock, a smooth launch, after which your grand opening.
Strawberry yogurt slush.
Gong Cha’s obtainable markets for franchising are:
- New York
- New Jersey
- Pennsylvania
- Connecticut
- Massachusetts
- Rhode Island
- New Hampshire
- Oklahoma
- Texas
- Georgia
- North Carolina
- South Carolina
- Florida
Gong Cha’s U.S. headquarters are positioned in Boston whereas their international headquarters is positioned in London. Their CEO is Paul Reynish who beforehand labored with 5 Guys and Dunkin Manufacturers.
How A lot Does Gong Cha Make in Revenue?
There isn’t any official monetary info as to how a lot Gong Cha makes in revenue. However an estimated quantity is $370,000 for a single unit. This is able to signify a mean revenue margin of 18% and may take about 8.1 years so that you can get better your funding.
Benefits of a Gong Cha Franchise
Franchising Gong Cha can result in quite a lot of benefits. Listed here are just a few:
World Model
Gong Cha isn’t simply massive in the US. They’re changing into a worldwide model. They’ve shops in South Korea, Philippines, Vietnam, New Zealand, Australia, United Kingdom, Macau, Japan, Singapore, and plenty of extra.
As well as, Gong Cha has been a well-liked milk tea model by way of the years. Listed here are just a few of the awards they’ve acquired:
- Ranked #1 within the Tea class on Entrepreneur’s prestigious Franchise 500® listing (2022)
- Chosen as a finalist for Franchise Instances’ listing of High Beverage Franchises To Purchase (2022)
- Chosen as a finalist for one of many High 10 World Meals & Drink Franchises by the World Franchise Awards (2022)
- Ranked #193 on Franchise Instances’ High 500 Checklist, annual rating of the five hundred largest U.S.-based franchise techniques by international system broad gross sales (2022)
Milk Tea Varieties
Gong Cha doesn’t simply promote traditional milk tea. They produce other variations of teas similar to brewed teas, fruit teas, slushies, and tea lattes. A menu with a lot selection will be advantageous because it brings in clients who’ve totally different preferences. Gong Cha additionally provides quite a lot of pre-mixed milk tea drinks, such because the Gong Cha Particular and the Earl Gray Milk Tea with 3Js.
Gong Cha bubble tea.
Milk Tea Demand and Progress
As talked about above, the milk tea trade has a compound annual progress fee of 8.9% to 2030. The craze isn’t simply non permanent as nicely. Gong Cha has additionally introduced that they’re planning to open 80 new shops with a goal of 500 shops within the U.S. by 2025.
Challenges of Gong Cha Franchise
Earlier than franchising a model, you’ll must know what the challenges are so you may anticipate them beforehand. Listed here are some challenges you may anticipate once you franchise Gong Cha:
Competitors
Gong Cha isn’t the one milk tea model that’s spreading all around the U.S. quickly. You’ve obtained massive manufacturers like Share Tea, The Alley, Coco, and Completely happy Lemon. The milk tea trade is sort of common so you may anticipate to see an in depth struggle amongst all of those milk tea manufacturers to grow to be the go-to model in the US.
American Style: American customers might have totally different style preferences than customers in different nations. Gong Cha might must adapt its menu and recipes to enchantment to American customers if it hopes to grow to be a family identify.
Model consciousness: Gong Cha is a widely known model in lots of nations around the globe, however it isn’t as well-known in the US. Because of this potential franchisees and clients is probably not accustomed to the model.
Monetary Necessities: The monetary requirement to open a Gong Cha retailer is fairly steep and may price upwards of $2 million to open a single location. You’d must have a very good monetary backing as a way to cross the preliminary assembly with Gong Cha. And for a model that principally sells drinks competitor ideas begin at funding degree of $300K so you would in lots of instances get began for much less with a unique enterprise alternative.
Is the Gong Cha Franchise Proper For You?
Gong Cha is a world famend model. However the idea is just not but confirmed in the US. As talked about earlier, I strongly counsel you consider the monetary efficiency of US-based places earlier than investing. The corporate ought to be capable of offer you an up to date Monetary Disclosure Doc that features this info earlier than signing on the dotted line.
What’s another Gong Cha franchise?
One other milk tea model chances are you’ll wish to try is Share Tea. The model additionally originated in Taiwan in 1992. In addition they use prime quality teas for his or her drinks. Share Tea has grown to over 400 shops around the globe.
To franchise Share Tea, their minimal monetary necessities is $100,000 in liquid capital and a minimal of $300,000 in investments. You’ll be able to learn my full overview of the Share Tea franchise alternative right here.
Gong Cha seems to be like a powerful model relating to competing with the opposite milk tea manufacturers on the market however do take extra time in deciding if it’s the suitable franchise you wish to convey to your space.
