Gong cha Franchise Cost, Revenue & Review 2026
- Investment
- $207K – $648K
- Disclosed sales
- $397K
- gross sales, not profit
- SBA charge-off
- Limited · 15 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Gong cha is a bubble tea franchise serving customizable milk teas, fruit teas, and boba drinks. Franchisees run the shops, managing drink prep, ingredient inventory, and counter service.
FranchiseVerdict summary · 2026
A Gong cha franchise requires a total initial investment of $207K – $648K, including a $35K franchise fee and an ongoing 6.0% royalty[2]. Per the 2026 FDD, average unit revenue was $397K[2]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: low - issued within the last 12 months
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored7 of 8 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $207K – $648K
- 25th pct Service Resta…
- Avg gross sales
- $397K
- Net sales2nd pct Service Resta…
- Royalty
- 6.0%
- 48th pct Service Resta…
- Units
- 38
- 61st pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $207K – $648K including a $35K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $397K/year (median $363K).
- RISKVerdict B (Above average), verdict score 51/100 (higher is better).
- GROWTHPositive: net +32 franchised outlets in the latest year (32 opened, 0 closed); 18 signed but not yet open (Item 20).
- EARLYEmerging franchise: only 3 years of franchising with 38 units. Early-stage systems carry higher risk but may offer better territory availability.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Gong cha USA Franchising, LLC
- Parent company
- Gong Cha Americas, Inc. (GCA)
- FDD Item 1, page 11 of the 2026 FDD
- Ultimate parent
- Gong Cha Limited (originally GC Group Topco Limited)
- FDD Item 1, page 11 of the 2026 FDD
- Predecessor
- Gong Cha International Co., Ltd. (f/k/a Royal Tea Taiwan Co. Ltd.) (GCI)
- Prior franchisor entity
- CEO title
- Global Chief Executive Officer
- Paul Reynish
- Incorporated in
- Delaware
- HQ
- 200 Clarendon St., Suite #5600, Boston, Massachusetts 02116
- Auditor
- Citrin Cooperman & Company, LLP
- Audited financials
- Franchisor revenue
- $4.9M
- vs $4.1M prior year
Overview
About
- CEO
- Paul Reynish
- Headquarters
- Massachusetts
- Founded
- 2006
- FDD year
- 2026
- States available
- 3
Can you afford it, and what does the money buy?
Entry cost runs 12% below the typical quick-service restaurants franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown13 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $37K | $37K | |
| Training Expenses | $4K | $7K | |
| Architect and Engineering, Fees; Final Layout Review Fee | $5K | $13K | |
| Leasehold Improvements | $52K | $271K | |
| Furniture, Fixtures, and Equipment | $46K | $80K | |
| Technology Systems | $5K | $6K | |
| Exterior Signage | $7K | $8K | |
| Security and Utility Deposits and Rent | $5K | $33K | |
| Professional Fees and Business Permits/Licenses | $1K | $29K | |
| Initial Supplies and Inventory | $26K | $62K | |
| Grand Opening Advertising | $5K | $5K | |
| Insurance | $5K | $12K | |
| Additional Funds - 3 Months | $10K | $87K | |
| Total initial investment | $207K | $648K |
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.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $207K – $648K
- Top 40% of category vs category
- Liquid capital req'd
- $10K – $87K
- Top 40% of category vs category
- Franchise fee
- $35K – $35K
- Middle of category vs category
- Royalty
- 6.0%
- 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 net sales |
| Technology fee | $328 |
| Training fee | $2K |
| Transfer fee | $19K |
| Renewal fee | $19K |
| Inventory (initial) | $26K – $62K |
| Total fee load | 7.0% of rev |
What do units actually make?
Average unit sales run 59% below the quick-service restaurants norm.
Reported as net sales, not gross sales
Source: FDD 2026 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Gong cha until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$476K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Gong cha unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
Reported as net sales, not gross sales
- Avg gross sales
- $397K
- Per unit, per year
- Median gross sales
- $363K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- historical
- Sample size
- 222 outlets
- vs category median 19 · large
- Range (low → high)
- $75K→$993KCited, not corroborated — printed on page 77 of the 2026 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $199K→$650K
- Bottom 25% → top 25%
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2024
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 781 Quick-Service Restaurants brands
Revenue is only 0.9x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $397K/year in gross sales. Revenue-to-investment ratio: 0.9x.
Fee burden
Total ongoing fee load of 7.0% (near the Quick-Service Restaurants median).
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants medians
How Gong cha Compares
Category median of published Quick-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 38
- Opened
- 32
- 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
- N/A
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 86%
- vs corporate-owned
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 11
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 18
- 0.47 per open outlet · Item 20 Table 5
- Projected new
- 12
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 20 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.
Where the owners are · Item 20 owner list
198 current owners across 20 states.
- CA 39
- TX 36
- NY 30
- NJ 25
- MA 22
- FL 7
- MD 7
- GA 6
- PA 6
- VA 6
- CT 3
- RI 2
- +8 more states
Counts only, from the list the franchisor prints in Item 20; 2 entries carry no state. Names and phone numbers are for your own due diligence and are not shown here.
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
- Limited · 15 loans
- Limited SBA coverage: 15 loans, rate hidden until 10 have resolved and loans reach 2% of franchised units
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Limited · 15 loans
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 12
- Defaults
- 0
Vintage analysis
Gong cha charge-off rate by loan vintage
Top lenders financing Gong cha franchisees
Showing 3 of 12 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Gong cha from SBA 7(a) FOIA data.
Top SBA lenders
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | The Huntington National Bank | 3 | $559K | N/A |
| 2 | The Bank of Princeton | 2 | $485K | 0.0% |
| 3 | Patriot Bank, National Association | 1 | $330K | 0.0% |
| 4 | PNC Bank, National Association | 1 | $265K | N/A |
| 5 | Firstrust Savings Bank | 1 | $380K | N/A |
| 6 | Newtek Bank, National Association | 1 | $175K | N/A |
| 7 | Provident Bank | 1 | $350K | N/A |
| 8 | The Middlefield Banking Company | 1 | $260K | N/A |
| 9 | FWBank | 1 | $564K | N/A |
| 10 | Manufacturers and Traders Trust Company | 1 | $112K | N/A |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| TXTexas | 6 | 0 | 0.0% |
| NJNew Jersey | 3 | 0 | 0.0% |
| NYNew York | 3 | 0 | 0.0% |
| OHOhio | 1 | 0 | -- |
| PAPennsylvania | 1 | 0 | -- |
| TNTennessee | 1 | 0 | -- |
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
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.
Why this reads harsher than the B grade: the grade weighs financial health, unit economics, unit growth, scale, legal, and transparency across the whole filing, while this summary lists individual flags without that weighting. The flags are worth checking with current owners; neither is investment advice.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
Four Item 3 matters, all involving franchise registration/disclosure violations by predecessor GCI (and in some cases the franchisor itself): (1) California DBO citation against GCI for offering an unregistered master franchise, settled via consent order (civil penalties of $2,500 x3); (2) civil suit/arbitration between GCI and its former CA master franchisee GCCA over renewal rights, settled with no monetary payment; (3) Maryland Securities Commissioner administrative proceeding against GCI, franchisor, and GCDMV for unregistered franchise sales, settled via consent order ($30,000 penalty plus $10,000 to GCDMV for rescinding licensees); (4) Virginia State Corporation Commission proceeding against GCI and franchisor for unregistered master franchise sale, settled with a $3,000 penalty.
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: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 51 / 100 verdict
- 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
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 7.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 2 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 15 |
| Curable defaultsℹ | 2 |
| Mandatory arbitration | Yes |
| Arbitration location | Massachusetts |
| Jury trial waiver | Yes |
| Governing law | Massachusetts |
| Litigation count | 4 |
View Item 3 litigation summary
Four Item 3 matters, all involving franchise registration/disclosure violations by predecessor GCI (and in some cases the franchisor itself): (1) California DBO citation against GCI for offering an unregistered master franchise, settled via consent order (civil penalties of $2,500 x3); (2) civil suit/arbitration between GCI and its former CA master franchisee GCCA over renewal rights, settled with no monetary payment; (3) Maryland Securities Commissioner administrative proceeding against GCI, franchisor, and GCDMV for unregistered franchise sales, settled via consent order ($30,000 penalty plus $10,000 to GCDMV for rescinding licensees); (4) Virginia State Corporation Commission proceeding against GCI and franchisor for unregistered master franchise sale, settled with a $3,000 penalty.
Items 10, 11
Training & Operations
- Classroom training
- 36 hrs
- On-the-job training
- 55 hrs
- Training location
- "Certified" Gong cha training store(s) and/or other locations designated by franchisor
- Ongoing training
- Required
- Time to open
- 5 mo
- From signing to launch
- Site selection
- franchisee selects, franchisor approves
- Franchisor financing
- Not offered
- Item 10
- POS system
- Designated third-party technology supplier (not named)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Designated third-party technology supplier (not named)
Item 20 · call current owners
Franchisee Contacts
200 owners to call
Name · phone · city · state. Extracted from FDD Item 20
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 $207K – $648K, 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 $397K. The median is $363K. Important context: Reported as net sales, not gross sales. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Gong cha?
Gong cha is franchised by Gong cha USA Franchising, LLC. Its parent company is Gong Cha Americas, Inc. (GCA). The ultimate parent named in the FDD is Gong Cha Limited (originally GC Group Topco Limited). Source: FDD Item 1, 2026 filing.
What is Item 19 in the Gong cha FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Gong cha FDD and qualifies whose outlets they describe.
What is Gong cha's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Gong cha (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Gong cha franchise locations are there?
As of their most recent FDD filing, Gong cha has 38 total units in the United States, including 36 franchised units and 2 company-owned units. 32 new units were opened in the latest reporting year.
Is Gong cha a good franchise to buy?
FranchiseVerdict rates Gong cha as a B-grade franchise with a verdict score of 51 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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
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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.