Gong cha buys back 170 U.S. Stores in Strategic Shift to 1,000 Units

Gong cha reclaims 170 U.S. stores in a bold move toward 1,000 units. Discover how this strategic shift to corporate control will redefine bubble tea franchising

Gong cha’s decision to bring the master franchise rights to 170 U.S. stores back in house is more than a territory reshuffle. It is a strategic attempt to redesign how the brand grows in America, shifting from a master franchise structure toward tighter corporate control, larger multi-unit partnerships and a more coordinated supply chain as it pursues a stated long-term ambition of 1,000 U.S. locations.

Why this deal matters

On March 9, 2026, Gong cha said it had acquired the rights to 170 U.S. locations from a master franchisee, taking direct control of a territory spanning 13 states: New York, New Jersey, Pennsylvania, Connecticut, Massachusetts, Rhode Island, New Hampshire, Texas, Oklahoma, Florida, North Carolina, South Carolina and Georgia. The scale is notable. Gong cha has said it operates more than 240 locations across the United States, which means the rights it has brought in house cover the majority of its U.S. system.

That makes this less a routine refranchising adjustment and more a structural reset. For a franchise brand, pulling a territory back from a master franchisee can be one of the clearest signals that the next phase of expansion demands a different operating model. Gong cha is effectively saying that national scale in the U.S. will be easier to achieve with more direct control over development, recruitment and system support.

From master franchise logic to platform control

Master franchise agreements often make sense in early market entry. They allow a brand to expand quickly with lower capital exposure and local market knowledge. They can also become constraining once the brand reaches a certain density or starts to require more consistent execution across markets.

That appears to be the inflection point Gong cha has reached in the United States. The company’s own rationale points to three priorities: recruiting larger multi-unit operators, building a stronger national supply chain and improving the tools that support store operations and customer experience. In practical terms, each of those goals becomes easier when a franchisor controls a broader swath of territory directly rather than relying on an intermediary layer.

The logic is straightforward. A multi-unit operator considering a serious regional development agreement generally wants confidence that site selection, training, procurement, technology and brand standards will be handled in a coordinated way. A fragmented territorial map can dilute that confidence. Bringing 170 stores in house gives Gong cha more room to negotiate larger, multi-year deals with operators that already understand restaurant systems, unit economics and real estate discipline.

The 1,000-store ambition is not really about the number

Gong cha’s public target of 1,000 U.S. stores is headline-grabbing, but the more important question is what kind of network it wants on the way there. A franchise system can add units and still weaken if supply chain economics, training consistency, labor productivity or digital infrastructure lag behind.

Seen in that light, the acquisition is as much about quality of growth as quantity of growth. A system that is trying to recruit bigger operators needs more than a popular category and a recognizable brand. It needs cleaner territory design, better store-level economics, stronger back-end support and a credible story on long-term margin resilience.

That is where Gong cha’s recent operational changes matter. In January the company launched “Gong cha 2.0,” a wider redesign of store operations, technology and format. The initiative centers on its Super Wu beverage automation system and self-order kiosks, which the company says are intended to reduce labor pressure, improve throughput and strengthen consistency. Reports tied to the rollout said the automation platform had been piloted for more than two years in 40 stores across 13 countries, while kiosks were already accounting for a large share of U.S. transactions in some stores.

For prospective franchisees, this is the deeper signal behind the territorial buyback. Gong cha is not only taking more direct control of development. It is also trying to present a more standardized, tech-enabled operating model that can appeal to sophisticated multi-unit investors.

Supply chain is the hidden story

The company has been explicit that the move should strengthen its national supply chain network and help manage costs for franchisees. That deserves close attention because beverage-led concepts often look operationally simple from the outside while depending on a surprisingly delicate procurement model underneath.

Bubble tea systems rely on consistency in tea, toppings, syrups, dairy or dairy alternatives, packaging and equipment. Import dependence, cold-chain complexity, commodity volatility and regional freight costs can all erode franchisee margins. When a franchisor does not directly control enough volume in key markets, the network can lose bargaining power and consistency at the same time.

By consolidating a large block of U.S. rights, Gong cha should have more leverage to rationalize vendors, negotiate distribution terms and standardize inventory planning across a broader footprint. That does not guarantee lower costs, but it increases the brand’s ability to pursue them. For franchisees, that may prove more strategically important than the headline number of stores acquired.

It also has a second-order effect. Stronger supply chain control can support development in newer regions because operators are less likely to enter markets where core products, ingredients or packaging feel logistically exposed. In other words, supply chain discipline is not just an operational issue. It is a growth enabler.

A response to the next phase of competition

Gong cha is making this move at a time when the specialty drinks space is becoming more crowded, more digital and more contested. Bubble tea remains a growth category, but it is no longer a niche novelty in the U.S. market. International tea brands continue to expand, while adjacent beverage chains are also training consumers to expect fast service, customization, app-based ordering and strong loyalty integration.

That means franchisors cannot rely on category momentum alone. They need an operating model that is efficient enough for suburban growth, disciplined enough for multi-unit development and flexible enough to work across different real estate formats. Gong cha’s recent messaging around drive-thru, digital ordering and automation suggests it understands this shift.

For larger franchise groups, the appeal of a beverage concept often comes down to a few practical questions. Can stores be opened in a range of footprints? Can labor be held to predictable levels? Can equipment and prep processes scale without quality drift? Can the supply chain withstand expansion outside core coastal enclaves? Gong cha’s territorial consolidation appears designed to improve its answers to each of those questions.

The private equity backdrop adds another layer

There is also a corporate finance dimension that should not be ignored. Bloomberg reported in early March that TA Associates, which invested in Gong cha in 2019, is considering a potential sale of the company, with a transaction possibly valuing the business at about $2 billion. Gong cha has not framed the U.S. territorial acquisition as part of any sale process, and there is no public indication that a deal will proceed. Still, the timing is notable.

A cleaner U.S. development story can matter in a strategic review. Bringing a major territory in house can make a franchise network look more coherent to potential buyers, particularly if it strengthens visibility over development rights, support systems and growth economics. It can also signal that management is willing to intervene directly when the inherited structure no longer fits the next stage of expansion.

That does not mean the move was made for financial window dressing. The operational rationale is substantial on its own. But in franchise businesses, strategic housekeeping and investor positioning often reinforce each other.

What franchise operators should take from it

For franchisors, Gong cha’s move is a reminder that the master franchise model is not always a permanent architecture. It can be an entry tool, but mature markets may eventually require more centralized control if the brand wants to recruit larger operators and standardize the economics of scale.

For multi-unit franchisees, the message is slightly different. Gong cha is trying to make itself look less like a patchwork of regional rights and more like a national platform. If it can combine direct territorial oversight with credible labor-saving technology and better procurement coordination, it becomes easier for experienced operators to underwrite the concept beyond a first store or two.

The risk, of course, is execution. Bringing territories in house is only the beginning. Gong cha will now need to prove that direct control really does produce faster development, better franchisee support and stronger unit economics. Ambitions of 1,000 U.S. stores are easy to announce. Building the organizational machinery to support that many stores across varied markets is much harder.

The editorial view

This is one of the more interesting franchise moves in U.S. foodservice this year because it shows a growth brand stepping away from pure expansion optics and confronting the mechanics of scale. Gong cha is not simply selling more franchises. It is redrawing the map through which franchises will be sold, supported and supplied.

That matters because franchise growth is rarely limited by consumer demand alone. It is usually limited by territory design, capital quality, operator quality and system capability. By reclaiming 170 U.S. stores from a master franchisee, Gong cha appears to be betting that the next chapter of American growth depends less on adding dots to a map and more on controlling the map itself.