Gong cha Buys Back 170 U.S. Franchise Locations to Fuel National Push

Bubble tea has graduated from a niche mall concept to a full-fledged franchise category, and Gong cha is restructuring its U.S. operations to match the ambition that status demands.

The global tea chain announced in March 2026 that it had acquired master franchise rights to 170 U.S. locations from an existing master franchisee, bringing those stores under direct corporate control. The acquisition spans 13 states: New York, New Jersey, Pennsylvania, Connecticut, Massachusetts, Rhode Island, New Hampshire, Texas, Oklahoma, Florida, North Carolina, South Carolina, and Georgia. Together, those markets cover some of the densest concentrations of Gong cha's current customer base on the East Coast and in Texas.

The move isn't just a real estate reshuffling. It's a statement about franchise system architecture, and about what it takes to go from 240 U.S. locations to 500, then to 1,000.

Why Bring the Territory In-House?#

The master franchise model is a common early-stage play for international brands entering the U.S. market. Rather than building out a corporate development team, training infrastructure, and local supply chain relationships from scratch, a foreign brand grants a single entity the rights to develop an entire region or country. That master franchisee takes on most of the heavy lifting: site selection, sub-franchising, training, and local marketing. The parent brand collects royalties and maintains brand standards at arm's length.

It works well as a market-entry vehicle. It doesn't always work well when you're ready to scale aggressively.

The problem with master franchise structures at scale is control. A master franchisee running 170 locations across a dozen states has its own financial model, its own priorities, and its own pace of growth. When the parent brand wants to accelerate development, standardize operations around new systems, or pivot its positioning, getting alignment takes time. And when the two parties disagree about the pace or direction of development, the brand suffers.

Geoff Henry, President of Gong cha Americas, framed the acquisition as a precision tool for growth execution. "Bringing this territory in-house allows us to further sharpen our development strategy," Henry said in the announcement. That language is deliberate. Sharpening strategy requires control over the territory where that strategy is executed.

The 500-Location Target Is the Forcing Function#

Gong cha currently operates more than 240 stores across 23 states, Washington D.C., and Puerto Rico. The company's stated target is 500 locations in the Americas by 2028. The long-range vision is 1,000 U.S. locations.

To get from 240 to 500 in two years, Gong cha needs to add roughly 130 net new locations per year. That pace requires tight coordination between site selection, franchisee recruitment, construction timelines, and grand opening support. It also requires a development team that can move without waiting for a master franchisee's approval or capital allocation.

By taking the 13-state territory in-house, Gong cha gives its Americas team direct authority over development decisions in markets that likely include its highest-volume stores and most franchise-ready real estate corridors. The Northeast corridor alone, from Boston through New York to Philadelphia, is arguably the most competitive and proven bubble tea market in the country.

The 170 locations acquired also represent a significant base from which to franchise outward. Rather than trying to convert an existing master franchisee's sub-franchisees into direct franchisees, Gong cha can now manage those relationships, collect full royalty streams, and direct reinvestment into those markets on its own terms.

Super Wu and the Productivity Argument#

The acquisition is also a chance to roll out Gong cha's operational overhaul at scale. The company has introduced what it calls "Gong cha 2.0," anchored by a new system called Super Wu.

The claims are specific: Super Wu increases productivity by up to 65% during peak hours and cuts average drink preparation time by nearly a minute. In a category where customer queues can stretch out the door during lunch and weekend traffic peaks, that kind of throughput improvement is a material competitive advantage.

For context, a bubble tea drink with customizable toppings, temperature, and sweetness levels is not a fast prep item. It involves multiple steps: brewing, cooling, measuring, combining, and sealing. A 60-second reduction in prep time per drink, multiplied across a Saturday afternoon rush, translates directly into more customers served, shorter waits, and higher per-hour revenue.

The ability to deploy Super Wu consistently depends on operational control. A master franchisee may or may not adopt new systems quickly, depending on their own investment capacity and priorities. With 170 locations now under direct corporate management, Gong cha can standardize Super Wu implementation, train staff directly, and measure the productivity gains without going through an intermediary.

How This Compares to Starbucks and Dutch Bros#

Gong cha's move sits within a broader debate about corporate versus franchise mix that defines competitive strategy across the beverage segment.

Starbucks operates primarily corporate locations in the U.S., which gives it tight control over the customer experience but loads the balance sheet with capex and labor costs. That model has worked at scale, but it has also made the company vulnerable to labor organizing and slower unit economics recovery when traffic softens. Brian Niccol's current turnaround at Starbucks is, in part, a story about what happens when a mostly-corporate model stops executing consistently.

Dutch Bros sits on the other end of the spectrum. The Oregon-born drive-thru coffee chain built its early growth through a franchise model that kept the culture tight and the capital light. As Dutch Bros has gone public and accelerated its corporate development pipeline, it has increasingly leaned on company-operated units to control quality in new markets before handing them to franchisees. It's a sequencing play: prove the market with corporate locations, then franchise from a position of demonstrated demand.

Gong cha's playbook looks closer to the Dutch Bros model than the Starbucks one. The company is not becoming primarily corporate-operated. It is acquiring specific territory where it needs direct control to execute a growth sprint, with the long-term intent of building out a well-managed direct and sub-franchised network in those markets. The global network, already spanning nearly 2,200 locations across 33 markets, runs almost entirely on franchise relationships. The U.S. buyback is surgical, not a structural reversal.

Five Consecutive Years at the Top#

One reason Gong cha has the leverage to execute this kind of acquisition is credibility. The brand has ranked number one in the Tea category on Entrepreneur magazine's Franchise 500 for five consecutive years, from 2022 through 2026.

That streak matters for franchisee recruiting. Prospective operators looking for a differentiated concept in the beverage category have a clear data point: Gong cha is the category leader by the most widely cited franchise ranking in the industry. The brand's ability to attract qualified franchisees for its newly controlled territory in the Northeast and South depends on that perception holding.

It also reflects execution consistency. The Franchise 500 ranking incorporates unit growth, financial strength, and franchisee support systems. Maintaining that position for five consecutive years while operating across 33 global markets suggests the brand has built scalable systems, not just scaled.

Bubble Tea's Mainstream Moment#

The broader backdrop for this acquisition is a category that has matured faster than most industry observers expected.

Bubble tea entered the U.S. as an ethnic food court novelty in the 1990s and spent two decades as a regional fixture in cities with large Asian-American populations. The concept's expansion into mainstream suburban and college-town markets accelerated sharply after 2015, and the COVID years, counterintuitively, helped. Drive-thru and to-go format drinks thrived. Customizable, Instagram-friendly beverages fit the post-pandemic consumer preference for affordable treats.

The result is that bubble tea is no longer a niche. It's a franchise category with multiple well-capitalized national players competing for prime real estate, qualified franchisees, and the same suburban consumer who is choosing between Starbucks, Dutch Bros, and a growing list of alternatives.

That competitive intensity changes what good franchise system design looks like. When you're opening your first 50 U.S. locations, a master franchisee's local knowledge and capital are assets. When you're trying to build 1,000, you need infrastructure that moves at your speed.

Gong cha's acquisition of 170 locations is the clearest evidence yet that the company understands the difference between those two moments, and is building accordingly.