Gong cha Franchise Cost, Revenue & Review 2026
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 2025 FDD, average unit revenue was $397K[2]. SBA 7(a) loans show a 0.0% charge-off rate across 15 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $207K – $648K
- 32nd pct Service Resta…
- Avg gross sales
- $397K
- 4th pct Service Resta…
- Royalty
- 6.0%
- 44th pct Service Resta…
- Units
- 38
- 56th pct Service Resta…
- SBA charge-off
- 0.0%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants avg · 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
- Total investment $207K – $648K including a $35K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $397K/year (median $363K).
- Verdict A (Strongest tier), verdict score 60/100 (higher is better). SBA loan charge-off rate of 0.0% across 15 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- 10 units terminated last reporting year (26.3% of the system). Ask existing franchisees why.
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)
- Ultimate parent
- Gong Cha Limited (originally GC Group Topco Limited)
- 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
- $4.1M
- vs $4.9M prior year
Overview
About
- CEO
- Paul Reynish
- Headquarters
- Massachusetts
- Founded
- 2006
- FDD year
- 2025
- States available
- 3
Can you afford it, and what does the money buy?
Entry cost runs 33% below the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown13 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.
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%
- percentage · 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 | $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 64% below the quick-service restaurants norm.
Source: FDD 2025 · Item 19
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
$60K
15.0% margin
Unlevered ROIC
12%
EBITDA / total invested capital
Payback
8.0 yrs
cash-on-cash, unlevered
Financial Performance
- 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 units
- vs category median 28 · large
- Range (low → high)
- $75K→$993K
- Cohort dispersion (min → max)
- Quartile band
- $199K→$650K
- Bottom 25% → top 25%
- Reporting year
- 2025
- Fiscal year the figures cover
- Transparency
- 4 / 10
- vs category median 3 / 10 · above
Compared against 485 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 average).
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 averages
How Gong cha Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 38
- Opened
- 32
- Last reporting year
- Closed
- 0
- Terminated
- 10
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 41.7%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 86%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 15
- Closed (3yr)
- 5
- Terminated (3yr)
- 10
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 11
- Reacquired (3yr)
- 25
- Franchisor bought back
- 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
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.
Premium insight
SBA Lending Report
Deep-dive into Gong cha's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 6 states
- Startup risk premium and job creation velocity
Instant access. No subscription.
With a 0.0% charge-off rate across 15 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 0.0% — 100% below the 16.0% national norm, i.e. lower lender-observed risk.
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.
Litigation (Item 3)
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.
Largest disclosed settlement: $30,000
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 60 / 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
- 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
What are you signing up for?
Ongoing fees run about 7.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · 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 |
| 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
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 $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. 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 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 A-grade franchise with a verdict score of 60 out of 100 (higher is better), 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
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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.