Gong Cha Franchise FDD, Costs & Fees (2024)

KEY FRANCHISE STATS

All you need to know about this franchise in a snapshot

Initial franchise fee
$34,500
Investment required
$175,000 - $620,000
Royalty fee
6.00%

Gong Cha: Elevating Global Tea Culture with Innovation and Tradition

Gong Cha, established in 2006 in Kaohsiung, Taiwan, and now headquartered in London, UK, has become a prominent global tea drink franchise. It swiftly expanded, reaching Hong Kong in 2009 and subsequently many other countries. Renowned for its extensive range of tea-based beverages, including milk teas, fruit teas, and inventive blends, Gong Cha stands out with its dedication to high-quality ingredients and innovative drink creations.

The term "Gong Cha" is derived from an ancient Chinese tradition of offering the finest tea to the Emperor, embodying the brand's pledge to excellence and quality that is fit for royalty. Under the leadership of its founder, Wu, Gong Cha has established itself as a leader in the international tea market. The brand is committed to delivering premium products, using high-quality tea leaves and ingredients to ensure that every cup offers an exceptional experience.

Gong Cha's expansion is characterized by its blend of innovation and tradition, offering a diverse array of drinks that appeal to varied tastes. From traditional milk teas with freshly prepared pearls to unique fruit-infused concoctions, Gong Cha's menu aims to deliver a distinct tea experience for every customer. The franchise distinguishes itself with its vast selection and focus on merging traditional tea culture with contemporary flavors.

The brand began its franchising initiative in 2011, marking a pivotal moment in its growth. This strategy allowed Gong Cha to extend its reach beyond Taiwan, introducing authentic Taiwanese bubble tea to an international audience. The franchise model has been instrumental in Gong Cha's expansion, facilitating its presence in numerous countries and establishing it as one of the fastest-growing tea brands globally.

Initial investment

Here's what you would need to invest if you were to start this franchise. These costs are provided by the franchisor in the Franchise Disclosure Document.

Type of Expenditure Low Amount High Amount
Initial Franchise Fee $34,500 $34,500
Training Expenses $3,600 $7,200
Architect and Engineering Fees $5,150 $13,000
Leasehold Improvements $51,500 $270,500
Furniture, Fixtures, and Equipment $18,500 $49,000
Technology Systems $9,300 $12,350
Exterior Signage $2,050 $5,400
Security and Utility Deposits and Rent $5,150 $32,500
Professional Fees and Business Permits/Licenses $1,250 $29,000
Initial Supplies and Inventory $25,750 $61,800
Grand Opening Advertising $2,050 $5,400
Insurance $5,400 $12,350
Additional Funds – 3 Months $10,300 $86,500
Total $174,500 $619,500

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Number of units

2024
Franchised units

182

115

157

Company-owned units

24

27

30

Total units

206

142

187

Franchise Disclosure Document

Training 

Gong Cha ensures its franchisees are well-equipped to operate their stores through a comprehensive training program covering essential aspects of the business:

Initial Training: Gong Cha mandates an initial training program for franchisees, specifically designed for the Designated Principal, the General Manager, and one additional individual, allowing up to three participants in total. The training lasts approximately two to three weeks, tailored to the specific roles of the attendees.

Training Locations: All training sessions are held at locations specified by Gong Cha, which may include their headquarters or other designated venues.

Ongoing and Refresher Training: Gong Cha provides continuous training as needed. Franchisees, along with their Designated Principal and General Manager, may also be required to participate in refresher courses, seminars, and additional training programs periodically.

Training Costs: Gong Cha covers the costs of training instruction and necessary materials. However, franchisees are responsible for other related expenses. For any additional training sessions conducted by Gong Cha, a per diem fee may be charged to the franchisees.

Territory Protection

Franchisees are granted the right to operate a Master Franchise Business within a designated Authorized Territory, as specified in the Key Terms of the Master Franchise Agreement.

However, this Authorized Territory excludes certain locations such as airports, sports arenas, hospitals, schools, college campuses, corporate campuses, health clubs, military bases, casinos, convention centers, theme parks, and similar areas with restricted trade, collectively referred to as "Non-Traditional Locations."

Franchisees receive conditional protection within their Authorized Territory, but this protection can be revoked under certain circumstances. If a franchisee violates specific clauses of the agreement, such as those pertaining to subfranchising, use of the trade name, fees and payments, business operations, or purchasing requirements from the franchisor, their territorial protection may be jeopardized.

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