Bubble tea chain Gong Cha is stepping up its US growth strategy after acquiring the master franchise rights to 170 stores nationwide, a move that comes as its private-equity owner reportedly considers selling the business.
The company said the deal will bring the majority of its US network under more direct control, allowing it to streamline operations and accelerate expansion. The stores are spread across 13 states and represent most of Gong Cha’s roughly 240 locations in the US.
“As we continue to grow toward our goal of 1000 US 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.
“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.”
Globally, Gong Cha operates more than 2000 stores across Asia, Europe, the Middle East and the Americas.
The expansion push comes as Gong Cha’s owner, private equity firm TA Associates, is reportedly exploring strategic options for the brand, including a potential sale.
According to a Bloomberg report, TA Associates has been working with JPMorgan Chase & Co to gauge interest from potential buyers. People familiar with the matter said a transaction could value the company at around $2 billion.
Discussions are understood to be at an early stage, and there is no certainty that a sale will proceed. TA Associates invested in Gong Cha in 2019.
