Bubble tea brand Gong Cha is leaning into ownership of its growth in the U.S.
The Taiwan-born chain said Monday it has acquired the rights to 170 U.S. locations from a master franchisee, bringing the territory in-house, which the company said was part of a strategy to accelerate franchise development and strengthen long-term growth as the beverage concept pushes to 1,000 units domestically.
The move comes as private-equity owner TA Associates is reportedly considering a sale of the beverage chain, which could value the company at about $2 billion, according to Bloomberg.
The territory Gong Cha will operate spans 13 states, including New York, New Jersey, Pennsylvania, Connecticut, Massachusetts, Rhode Island, New Hampshire, Texas, Oklahoma, Florida, North and South Carolina and Georgia.
“As we continue to grow toward our goal of 1,000 U.S. locations, bringing this territory in-house allows us to further sharpen our development strategy and strengthen support for our franchise partners,” said Geoff Henry, president of Gong Cha Americas, in a statement. “By engaging larger multi-unit developers, we can strengthen our national supply chain network, better manage costs for franchisees and continue improving the digital tools that power both our operations and the customer experience.”
Founded in 2006, Gong Cha has been a pioneer of the Taiwanese-style boba tea trend in the U.S. and around the world. With headquarters in Seoul and London, the beverage chain has nearly 2,200 units in 33 international markets.
Since 2014, the chain has opened more than 240 locations in the U.S., and says it’s on track to reach 500 in the Americas by 2028.
TA Associates made a strategic growth investment in the chain in 2019. At the time, the global tea market had enjoyed steady growth and TA officials expected tea would eventually eclipse coffee.
Since then, however, the beverage world has exploded with rapidly growing brands, from the home-grown coffee chains like Dutch Bros and 7 Brew, to international chains like Mixue, Chagee and Luckin Coffee.
Meanwhile, Gong Cha has been building its U.S. infrastructure. The chain recently unveiled a Gong Cha 2.0 refresh of its digital systems, operations and store design, which includes a streamlined drink preparation system dubbed the Super Wu system, named for founder Wu Zhenhua.
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