Gong Cha Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$184,500 - $627,060
Franchise Fee
$17,250
Total US Locations
229
Business Summary
Gong cha® operates single stores that primarily offer and sell a variety of bubble tea blends, coffees and teas, smoothies, juices, and other related products. The business utilizes proprietary methods of operation for its stores, branded under the "Gong cha®" trademark.
Corporate History
The Gong cha® brand originated in 2006 in Kaohsiung, Taiwan, and expanded globally, including to the United States in April 2014. Gong cha USA Franchising, LLC, the current franchisor, was incorporated in Delaware on January 10, 2023. It became the US franchisor in May 2023 as part of a corporate restructuring, and began offering unit and multi-unit franchises in the US in October 2023. Prior to this, its predecessor, Gong Cha Global Limited (GCG), served as the global franchisor outside the US since July 2020 and offered master and unit franchises in the US. Gong cha International Co., Ltd. (GCI), the original company founded in 2006, sold its intellectual property rights to GCG in 2020.
Financial Overview
Investment Range
$184,500 - $627,060
Franchise Fee (Low)
$17,250
Franchise Fee (High)
$34,500
Royalty %
6%
Marketing %
1%
Equipment Costs (Low)
$81,750
Equipment Costs (High)
$332,800
Working Capital
$48,400
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
Gong cha USA Franchising, LLC is at an early stage of development and has a limited operating history. The company reported net income of $361,302 for 2024 and $154,183 for the period from January 10, 2023, to December 31, 2023. The company's license fee was waived by the licensor in 2024, which typically occurs if net income is below $250,000, although the reported net income for 2024 was above this threshold. The company has audited financial statements with an unqualified opinion, indicating that the financial statements present fairly, in all material respects, the company's financial position. The company's member's equity increased from $654,183 in 2023 to $1,015,485 in 2024, and it maintains healthy working capital with current assets exceeding current liabilities.
Financing Details
Gong cha USA Franchising, LLC's parent company, GCA, offers financing to franchisees specifically for the intelligent beverage maker. GCA will finance 70% of the total cost of this equipment over a 6- or 12-month term, with an annual interest rate of 10%. Franchisees are required to make a 30% downpayment, with the remaining balance paid in equal monthly installments. The purchase agreement allows for prepayment without penalty. If payments are not made on time, GCA can demand immediate payment of the full outstanding balance and seek court costs and attorney's fees if collection action is necessary. No security is required under this purchase agreement. Franchisees waive their rights to notice of collection actions and to assert defenses against GCA.
Performance Metrics
Total US Locations
229
Franchised Units
198
Corporate Units
31
Avg Square Footage
1,000
Franchising Since
2020
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
4
Litigation Summary
Gong cha USA Franchising, LLC, and its predecessor, Gong Cha International Co., Ltd. (GCI), have been involved in several legal matters. In May 2020, California regulators cited GCI for offering and selling a master franchise without registration and failing to provide an FDD; this was resolved in January 2025 with a consent order requiring GCI to pay civil penalties and comply with registration laws. Separately, in June 2020, a California master franchisee sued GCI over renewal rights, which was settled in July 2021 with the agreement's renewal. More recently, Maryland regulators investigated GCI and Gong cha USA Franchising, LLC for alleged Maryland Franchise Law violations related to a master franchise sale, resulting in a global consent order in December 2024. This order required GCI and Gong cha USA Franchising, LLC to pay a $30,000 civil penalty and ensure future registration compliance, while the master franchisee agreed to offer rescission rights to its Maryland licensees. Virginia regulators also investigated GCI and Gong cha USA Franchising, LLC for similar violations, leading to a settlement order in March 2025 where they agreed to pay a $3,000 penalty and comply with the Virginia Retail Franchising Act.
Bankruptcy History
Gong cha USA Franchising, LLC has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Gong cha® franchise, franchisees must provide written notice at least six to twelve months before their current agreement ends. They must be in good standing, meaning they have no past due monetary or other outstanding obligations to Gong cha USA Franchising, LLC, its affiliates, or approved suppliers, and must not be in default of their franchise agreement or any other related agreements. Franchisees will need to sign a new franchise agreement, which may have different terms, including higher fees. They must also meet the then-current qualification and training requirements, remodel their store to meet current brand standards, provide proof of property control for the location, and sign a general legal release. Finally, a renewal fee, equal to 50% of Gong cha USA Franchising, LLC's then-current standard initial franchise fee, or 50% of the initial franchise fee they originally paid if new franchises are not being offered, is required.
Training & Support Program
Franchisor Assistance
Gong cha USA Franchising, LLC provides various types of support to its franchisees. Before opening, Gong cha® assists with defining a search area for the store, reviewing proposed sites and leases, and offering a sample interior layout. The franchisor also provides an initial training program and on-site support for the store's grand opening, which includes assistance with developing the Grand Opening Advertising Program. Franchisees receive a list of approved suppliers and can purchase initial supplies and inventory from Gong cha USA Franchising, LLC or its affiliates. Post-opening, Gong cha® offers ongoing advice and guidance in marketing, management, and operations. It administers the Brand Marketing Fund and any Cooperative Ad Funds, and reviews local marketing efforts. Franchisees also have access to an approved supplier list and can purchase necessary equipment, supplies, and products. Gong cha® establishes pricing, gift card, and other promotional programs that franchisees must participate in. Additional training is available, some of which may be at the franchisee's expense. For multi-unit franchisees under an Area Development Agreement, Gong cha® offers incentives if they meet certain development targets.
Initial Training Hours
91
Training Location
Certified Gong cha® training stores owned by the franchisor's affiliates or franchisees, and/or other designated locations. On-the-job training is typically held at a certified training store, while classroom training is in a conference room or office setting.
Ongoing Support
Gong cha USA Franchising, LLC provides ongoing support to its franchisees through various means. This includes periodic advice and guidance on marketing, management, and store operations. The franchisor offers additional optional training upon request (at the franchisee's expense) and may require additional training, also at the franchisee's expense, including refresher courses, seminars, and annual conventions. Gong cha USA Franchising, LLC manages and administers the Brand Marketing Fund and any Cooperative Ad Funds, and it reviews and approves franchisees' local marketing activities. Franchisees receive a list of approved suppliers for equipment, supplies, inventory, and services. The franchisor also establishes and requires participation in pricing, gift card, loyalty, and other promotional programs. Additionally, Gong cha® may conduct quality control and evaluation programs, customer surveys, and mandate health and safety audits for stores, with the cost of up to four annual audits covered by the franchisor, but subsequent audits for failed inspections are at the franchisee's expense.
Franchise Requirements
Ideal Candidate Profile
Gong cha USA Franchising, LLC looks for franchisees who have some prior business experience or a strong interest in the restaurant, beverage, or food service industry. While no prior business operating experience is strictly required, candidates must meet current selection criteria, which include minimum liquid capital amounts, successful background and credit checks, and completion of an interview process.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
protected
Territory Size Requirements
Gong cha USA Franchising, LLC defines its territories based on various factors such as market demographics, existing Gong cha® store penetration, site availability, traffic patterns, growth trends, and population density. A typical territory will be a radius of up to 2 miles surrounding the franchisee's store.
Staffing Notes
Gong cha USA Franchising, LLC requires each store to be directly supervised by a General Manager, who must have successfully completed the franchisor's initial training program. The General Manager is responsible for the overall operation of the store, including food safety and quality policies. Beyond the General Manager, each Gong cha® store typically requires additional trained staff. Franchisees are obligated to maintain a competent and conscientious staff of trained employees in numbers sufficient to promptly serve customers and comply with all required standards, including uniforms and dress codes established by Gong cha USA Franchising, LLC. The franchisor also specifies that franchisees are solely responsible for all employment decisions and functions, such as hiring, firing, wages, and compliance with employment laws.