Gong chaFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Gong cha franchise requires a total initial investment of $185K – $627K, including a $35K franchise fee and an ongoing 6.0% royalty[2]. Per the 2025 FDD, average unit revenue was $440K[2]. SBA 7(a) loans show a 0.0% charge-off rate across 15 loans[1]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $185K – $627K
- 27th pct Service Resta…
- Avg gross sales
- $440K
- 5th pct Service Resta…
- Royalty
- 6.0%
- 44th pct Service Resta…
- Units
- 6
- 25th pct Service Resta…
- SBA default
- 0.0%
- system-wide median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = >15% above Quick-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Only 0.0% of 15 SBA loans charged off, well below the 16% franchise average.
Started franchising in 2023. Newer systems carry more uncertainty but may offer better territories.
Bottom line
- Total investment $185K – $627K including a $35K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $440K/year (median $401K).
- Verdict A (Top Quintile) with a risk score of 31/100. SBA loan charge-off rate of 0.0% across 15 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- Emerging franchise: only 3 years of franchising with 6 units. Early-stage systems carry higher risk but may offer better territory availability.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Gong cha USA Franchising, LLC
- Parent company
- Gong cha Americas, Inc.
- Ultimate parent
- Gong Cha Global Limited (GCG)
- CEO title
- Global Chief Executive Officer
- Paul Reynish
- Incorporated in
- DE
- HQ
- 200 Clarendon St., Suite #5600, Boston, Massachusetts 02116
- Auditor
- Citrin Cooperman & Company, LLP
- Audited financials
- Franchisor revenue
- $2.9M
- vs $4.1M prior year
Overview
About
Gong Cha franchisees operate bubble tea retail locations, preparing and serving specialty tea-based beverages with tapioca pearls and customizable toppings. Daily operations include inventory management, customer service, point-of-sale transactions, and beverage preparation using branded recipes and equipment. Franchisees are responsible for local marketing, staffing, and maintaining brand standards within their protected territory.
- CEO
- Paul Reynish
- Headquarters
- MA
- Founded
- 2006
- FDD year
- 2025
- States available
- 3
FDD Item 7 · 2025 filing · 13 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $35K | $35K | |
| Training Expensesnot refundable | $4K | $7K | |
| Architect and Engineering Feesnot refundable | $5K | $13K | |
| Leasehold Improvementsnot refundable | $52K | $271K | |
| Furniture, Fixtures, and Equipmentnot refundable | $30K | $62K | |
| Technology Systemsnot refundable | $6K | $7K | |
| Exterior Signagenot refundable | $2K | $5K | |
| Security and Utility Deposits and Rentnot refundable | $5K | $33K | |
| Professional Fees and Business Permits/Licensesnot refundable | $1K | $29K | |
| Initial Supplies and Inventorynot refundable | $26K | $62K | |
| Grand Opening Advertisingnot refundable | $4K | $5K | |
| Insurancenot refundable | $5K | $12K | |
| Additional Funds - 3 Monthsnot refundable | $10K | $87K | |
| Total initial investment | $185K | $627K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$66K
15.0% margin
Unlevered ROIC
15%
EBITDA / total invested capital
Payback
6.9 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $185K – $627K
- Better than avg vs category
- Liquid capital req'd
- $10K – $87K
- Better than avg vs category
- Franchise fee
- $35K – $35K
- Near category avg vs category
- Royalty
- 6.0%
- Gross Sales · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 7.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $4K |
| Transfer fee | $17K |
| Renewal fee | $17K |
| Total fee load | 7.0% of rev |
Financial Performance
- Avg gross sales
- $440K
- Per unit, per year
- Median gross sales
- $401K
- Item 19 type
- net_sales
- Range (low → high)
- $72K→$1.1M
- Cohort dispersion (min → max)
- Quartile band
- $228K→$712K
- Bottom 25% → top 25%
- Reporting year
- 2024
- Fiscal year the figures cover
- Transparency
- 4 / 5
- vs category median 4 / 5 · typical
Compared against 453 Quick-Service Restaurants brands
vs Quick-Service Restaurants averages
How Gong cha Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 6
- Opened
- 4
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 67%
- vs corporate-owned
3-year detail · Item 20
- Transfers (3yr)
- 0
- Projected new
- 7
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 35 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 15
- Loan volume
- $3.8M
- Median loan
- $251K
- average
- Charge-off rate
- 0.0%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 12
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
With a 0.0% charge-off rate across 15 loans, banks have historically viewed this brand favorably for lending.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Gong Cha presents HIGH RISK due to a severely underdeveloped franchise system (6 units), active multi-state regulatory violations, master franchise disputes, and undisclosed profitability metrics.
Litigation (Item 3)
Three matters disclosed: (1) California Department of Business Oversight citation against GCI for franchise law violations (unregistered master franchise sale, failure to provide disclosure document) - settled via consent order effective January 21, 2025 with $7,500 in civil penalties; (2) GCCA v. Royal Tea Taiwan Co., Ltd. in Alameda County Superior Court regarding master franchise renewal rights - settled July 9, 2021 with agreement to renew agreement for 6-year term plus one additional 6-year renewal option, dismissed with prejudice July 16, 2021; (3) Maryland Securities Commissioner administrative proceeding against GCI, Gong cha USA Franchising LLC, and GCDMV LLC for franchise registration and disclosure violations related to DC/Maryland/Virginia master franchising agreement - status indicates consent order being negotiated (ongoing as of FDD date).
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Citrin Cooperman & Company, LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 31 / 100 rating
- 01MINOROnly 6 operating units indicates a micro-franchise system with minimal scale and unclear growth trajectory
- 02MINORMultiple regulatory violations across three states (CA, MD, VA) suggest systemic compliance and disclosure issues
- 03HIGHMaster franchise renewal dispute with court litigation and arbitration indicates franchisor-franchisee relationship deterioration and territorial instability
- 04MEDNet income not disclosed despite $439,522 average revenue, making true profitability assessment impossible
- 05MEDHigh initial investment ($184,500–$627,060) relative to system size creates significant capital risk with limited track record
- 06HIGHGoing Concern status is FALSE, indicating potential financial viability concerns at corporate level
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Radius |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 2 mi |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Massachusetts |
| Litigation count | 5 |
View Item 3 litigation summary
Three matters disclosed: (1) California Department of Business Oversight citation against GCI for franchise law violations (unregistered master franchise sale, failure to provide disclosure document) - settled via consent order effective January 21, 2025 with $7,500 in civil penalties; (2) GCCA v. Royal Tea Taiwan Co., Ltd. in Alameda County Superior Court regarding master franchise renewal rights - settled July 9, 2021 with agreement to renew agreement for 6-year term plus one additional 6-year renewal option, dismissed with prejudice July 16, 2021; (3) Maryland Securities Commissioner administrative proceeding against GCI, Gong cha USA Franchising LLC, and GCDMV LLC for franchise registration and disclosure violations related to DC/Maryland/Virginia master franchising agreement - status indicates consent order being negotiated (ongoing as of FDD date).
Items 10, 11
Training & Operations
- Classroom training
- 36 hrs
- On-the-job training
- 55 hrs
- Training location
- On-site and corporate
- Ongoing training
- Required
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
98 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Gong cha · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Gong cha franchise?
The total investment to open a Gong cha franchise ranges from $185K – $627K, with an initial franchise fee of $35K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Gong cha franchise owners earn?
According to Item 19 of the Gong cha FDD, the average gross sales per unit is $440K. The median is $401K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Gong cha's franchise failure rate?
Based on SBA 7(a) loan data, Gong cha has a charge-off rate of 0.0% across 15 loans, meaning 0.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Gong cha franchise locations are there?
As of their most recent FDD filing, Gong cha has 6 total units in the United States, including 4 franchised units and 2 company-owned units. 4 new units were opened in the latest reporting year.
Is Gong cha a good franchise to buy?
FranchiseVerdict rates Gong cha as a A-grade franchise with a risk score of 31 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent Gong cha, you can request corrections or provide updated information.
Claim this brandOther Quick-Service Restaurants franchises
Compare similar franchise opportunities in the Quick-Service Restaurants category
Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.