Gong cha Franchise Costs, Fees & FDD

Year Business Began: 2006

Franchising Since: 2009

Headquarters: Boston, Massachusetts

Country of Origin: Taiwan

Estimated Number of Units: 2,160

Franchise Description: The franchisor is Gong cha USA Franchising, LLC. The franchisor offers unit franchises for the operation of a single store, operated under the “Gong cha” trademark, that primarily offers and sells a variety of bubble tea blends, coffees and teas, smoothies, juices, and other related products using proprietary methods of operation.
Training Overview: The franchisor will provide an initial training program to franchisees (or, if the franchisee is other than an individual, the designated principal and, if applicable, the general manager, and up to one additional person as the franchisor may require (not to exceed a total of 3 persons), in the franchisor’s sole discretion. The initial training program currently consists of 10 days of training. The initial training program will take place at “certified” Gong cha training stores owned by one of the franchisor’s affiliates or franchisees, and/or other locations the franchisor designates. The on-the-job training typically will be held at the “certified” training store, while the classroom training will be held in a conference room or office setting. In addition, the franchisor will make available to franchisees assistance in preopening, opening and initial business operation of the store. Currently this assistance will consist of 5 days of support by one of the franchisor’s representatives (2 days before the opening, opening day, and 2 days after the opening). The franchisor also may require that franchisees or their designated principal and general manager attend such refresher courses, seminars, and other training programs as it may reasonably require from time to time, provided that such training shall not exceed 4 days per person each year, and attendance for up to 3 days per person each year at conventions, if any, conducted for its franchisees.

Territory Granted: Franchisees will receive a “territory” as identified in the Franchise Agreement. The size of the territory will vary depending on a number of factors, including market demographics, the market penetration of Gong cha stores and similar businesses, the availability of appropriate sites, traffic patterns, growth trends in the market, and population density, although a typical territory will consist of a radius of up to two miles surrounding the store. During the term of the Franchise Agreement, if franchisees are in compliance, the franchisor will not directly establish, operate or franchise another to establish or operate any other Gong cha store within the territory.

Obligations and Restrictions: The franchisor prefers that franchisees participate personally, on a full-time basis, in the operation of the store. If franchisees are not an individual, they shall designate (subject to the franchisor’s approval) a person with at least 10% beneficial interest in the franchisee who will be responsible for general oversight and management of the operations of the store on the franchisee’s behalf (the “designated principal”). Franchisees must designate either the designated principal or an experienced manager to assume the full-time responsibility for the daily supervision and operation of the store (the “general manager”). Franchisees must offer the products and services the franchisor specifies, and they may not sell other products or services through their store or under the Gong cha marks without prior written approval. Franchisees must have valid licenses or permits to sell the products and services they offer through the store.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If franchisees meet the renewal conditions, they can renew their franchise for an additional 10-year period.

Financial Assistance: The parent company of the franchisor, GCA, offers financing to franchisees for the beverage maker described in the FDD. If franchisees choose to use GCA’s financing, GCA will require that they execute a standard form purchase agreement.

Estimated Initial Investment

Name of Fee	Low	High
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	$30,250	$62,300
Technology Systems	$5,850	$6,610
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	$4,000	$5,400
Insurance	$5,400	$12,350
Additional Funds – 3 Months	$10,300	$86,500
ESTIMATED TOTAL	$184,500	$627,060

 
Other Fees

Type of Fee	Amount
Royalty Fee	6% of weekly net sales.
Brand Marketing Fee	1% of weekly net sales. However, the franchisor can increase this amount to up to 2% of weekly net sales upon 90 days’ prior written notice.
Regional Marketing Fee	If a cooperative ad fund is established in the geographic area in which the store if located, the franchisor can require franchisees to contribute up to 2% of net sales to the  cooperative advertising fund, or more than 2% if the members of such cooperative ad fund vote to exceed this maximum amount.
Additional Training Fees	See FDD.
Additional Opening or Onsite Training	The franchisor’s per diem charges and out of pocket expenses, which are currently estimated to be $1,000 to $3,000 per person.
Supplies and Inventory Fees	Actual costs.
Technology System Fees	Actual costs.
Prohibited Product or Service Fee	$250 per day for each day an unapproved product or service is offered or provided by the franchisee.
Relocation Fee	50% of the initial franchise fee, as well as any costs and expenses the franchisor incurs in connection with the relocation.
Renewal Fee	50% of the then-current standard initial franchise fee, or 50% of the initial franchise fee the franchisee paid if the franchisor is not offering franchises at the time of renewal.
Transfer Fee	50% of the then-current standard initial franchise fee; If franchisees have entered an ADA, they must pay an  additional transfer fee of $5,000.
Securities Offering Review Fee	Actual costs and expenses associated with the franchisor’s review of proposed offering materials, including legal and accounting fees.
Bank Charges and Fees	Charges and fees assessed by banks and third parties for failed EFT payments.
Late Payment Administrative Fee	5% of the overdue amount.
Interest	Lesser of 1.5% per month or highest rate of interest allowed by applicable law.
Audit	Cost of audit, including travel, lodging, wages, and reasonable accounting and legal costs.
Designated Accountant Fee	Cost of designated accountant.
Quarterly Health and Safety Audits and Subsequent Audits	If the store fails any health and safety audit based on the standards the franchisor periodically establishes or it separately requests such audit based on credible evidence it becomes aware of that the store is likely not meeting its health and safety standards, the franchisor may require its authorized third-party service provider to perform additional health and safety audits, at the franchisee’s expense, until the store passes a subsequent health and safety audit and meets the then-current standards. The franchisor estimates the cost of each subsequent audit to be between $200 to $400.
Cost to Correct Post-Inspection Deficiencies	The franchisor’s costs to correct any deficiencies uncovered by an inspection that franchisees do not correct within a reasonable amount of time.
Insurance	The franchisor’s cost to obtain insurance coverage if the franchisee fails to do so, plus a reasonable administrative fee for expenses it incurs in procuring the insurance.
Customer Satisfaction Costs	Franchisor’s costs to resolve customer complaints on the franchisee’s behalf.
Indemnification	Actual costs.
Cost of Enforcement or Defense	All costs including accounting and attorneys’ fees.
Taxes	Amount of tax or assessment.

The above information has been compiled from the FDD of Gong cha. Year of FDD: 2025.
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