Franchise Gong Cha: The real startup costs?

Introduction

Are you looking to open a Gong Cha franchise? It can be a great business to take up – not only are you operating in a thriving industry, but you can also work your own hours and be your own boss. According to Statista, global bubble tea market revenue has grown from over US0 million in 2018 to over US0 million in 2020.

This shows that the demand for bubble tea is increasing exponentially. However, before starting your Gong cha Franchise, it is important to know how much it will cost. This blog post will explore the initial one-time costs you’ll need to factor into your budget when getting started.

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start-up costs

Opening a Gong Cha franchise usually requires heavy upfront expenses. A potential franchisee should consider the following types of start-up costs:

• Franchise fees
• Equipment purchases
• Signaling
• Display of devices
• Lease Improvements
• Rent/lease payments
• Licenses, permits, etc.
• Advertising and Marketing
• Employee training costs

The exact amount of money needed to open a Gong Cha franchise varies widely, but average ranges can be found in the following tables (in USD):

Franchise fees

When it comes to franchising a Gong Cha store, interested people have to pay a franchise fee as a start-up cost. According to a Franchise Business Review report, opening a Gong Cha store has an average initial investment of 8,000 to 7,000. This includes franchise fees of ,000 to ,000.

Franchise fees cover expenses related to the ongoing franchise, such as technical assistance, marketing support, and research and development. These fees are also non-refundable, as indicated on the company’s franchise application.

In addition to franchise fees, opening a Gong Cha franchise also costs between 0,000 and 0,000 in other fees and expenses. This includes the cost of construction, the cost of equipment and furniture, rental deposits, business licenses, insurance, supplies and other operational costs.

It is important to note that the distribution of these costs varies considerably between each potential franchise owner. This leaves potential franchisees with a wide range of potential costs to consider. As such, it is important to thoroughly research all associated franchise costs before making a long-term financial commitment.

Equipment purchases

Starting a new Gong Cha franchise requires a considerable outlay of capital. One of the major costs is equipment purchases , which can range from around ,000 to over ,000, depending on the vendor and the type of equipment needed. These fees typically cover items such as counter screens, seats and tables, an espresso machine, and cash registers.

Additional costs may include display refrigerator, under-contest refrigerator, prep tables, storage shelves, ice makers and sinks. In 2019, the average cost of purchasing basic equipment for a Gong Cha franchise was roughly ,000 .

In addition to equipment purchases, Gong Cha franchisees must also consider installation costs and shipping costs. For example, installing an espresso machine typically costs between 0 and ,000 and can take up to several weeks. Shipping costs for equipment vary widely depending on size, weight and destination.

In addition to equipment purchases, potential Gong Cha franchisees must also build or renovate their location, train and hire staff, and purchase food supplies, insurance, and other required licenses. All in all, starting a Gong Cha franchise can easily require a significant financial commitment.

Signaling

Signage is an essential part of any business, and a Gong Cha franchise is no different. Investing in quality signage is important for attracting customers to your store, and a Gong Cha franchise is no exception. The cost of signage for a Gong Cha franchise can vary depending on the size and type of signage, but the average cost for a basic sign is around ,000 . For more complex or illuminated signage, the cost can range from ,000 – ,000 USD .

When determining the cost of signage for your franchise, it is important to consider the following factors:

• Size and type of signage.
• Quality of materials used.
• Installation costs.
• Maintenance costs.

When it comes to choosing the right signage for your franchise, it’s important to think about how it will appear both during the day and at night. Consider font size and type, colors used, and other details that will make your signage stand out. High-quality signage is an essential part of setting up your franchise, so be sure to invest wisely.

Display of devices

When starting a Gong Cha franchise, one of the biggest expenses to consider is the cost of display devices. Display fixtures are necessary to ensure that all products are properly stored, organized and presented in a professional manner. The cost of display devices will vary depending on the size and complexity of the setup, but there are some basic costs you should consider.

Shelves – Display shelves are the most common type of mounting and the cost can range from a few hundred to several thousand dollars. Depending on the size and style of the shelves, the cost can vary greatly. The cost of display shelves will also depend on how many shelves you need to purchase.

Refrigeration systems – If you plan to serve the produce cold, you will need to purchase a refrigeration system. The cost of a refrigeration system can range from a few hundred dollars to several thousand dollars, depending on the size and complexity of the system. In addition to the cost of the refrigeration system, you may need to pay for installation and any related equipment.

Counters – Counters are a great way to showcase your products and help create a professional atmosphere. The cost of counters can range from a few hundred dollars to several thousand dollars, depending on the size and style of the counters.

Lighting – Lighting is an important aspect of any display fixture setup, and the cost of lighting can range from a few hundred dollars to several thousand dollars, depending on the type of lighting you choose. You should also consider the additional costs associated with installation.

Average cost of display devices – According to recent statistics, the average cost of display devices for a Gong Cha franchise is around 3500 USD. This cost will vary depending on the size and complexity of the setup, but it’s a good starting point for budgeting.

Lease Improvements

Opening a Gong Cha franchise requires a significant investment, with the biggest cost being leasehold improvements. Leasehold improvements are the modifications and customizations made to a leased property to make it suitable for business operations. These modifications and customizations may include the installation of walls, floors, light fixtures and other features. The cost of leasehold improvements can vary greatly, but the average cost is estimated to be between to per square foot . For a 1,000 square foot space, this can outfit at ,000 to ,000 . Additionally, some landlords may be willing to contribute to the cost of leasehold improvements, so it is important to always negotiate the lease agreement.

When budgeting for leasehold improvements, it is important to understand the restrictions that may be placed on your changes. For example, some homeowners may limit the type of insulation that can be used or the type of paint that can be applied to walls. Additionally, landlords may also require you to use licensed contractors for work, which can increase the cost of the project. Understanding these restrictions can help you accurately budget the project and ensure it is completed within the allocated budget.

Leasehold improvements can also take longer than expected, especially if the space needs major repairs. It is important to plan for delays in the project schedule as this can affect the time it takes to open the franchise. Additionally, some states require a certificate of occupancy prior to business opening, which can add additional time to the project schedule.

Rent/lease payments

When considering opening a Gong CHA franchise, potential landlords should consider the cost of rent or lease payments. According to the International Franchise Association, the average cost of rent or lease payments for a restaurant franchise in the United States is approximately ,500 per month . However, the actual cost of rent or lease payments may be higher or lower depending on the size and location of the franchise. Additionally, some franchise agreements require franchise owners to pay additional fees such as common area maintenance fees, property taxes, or insurance premiums.

The cost of rent or lease payments for a Gong Cha franchise may also vary by country. For example, in Canada the average cost of rent or lease payments for a restaurant franchise is roughly ,800 per month , while in the UK the average cost of rent or lease payments for a restaurant allowance is approximately £3,000 per month . Additionally, some franchise agreements may require franchisees to pay additional fees such as common area maintenance fees, property taxes, or insurance premiums.

When deciding to open a Gong Cha franchise, prospective landlords should consider the cost of rent or lease payments as well as any additional fees that may apply. This will help them determine whether or not they can afford to open a Gong Cha franchise and whether it is a wise investment.

Licenses and permits

Opening a Gong Cha franchise requires you to obtain a range of licenses and permits before you can start operating. These are necessary to ensure that you and your business comply with local regulations and laws. Depending on the type of business you plan to operate, the cost of obtaining these licenses and permits can vary.

For example, you may need to obtain a Food Service Establishment License or Retail Food Establishment License from your local health department. You may also need a business license from your local government, or you may need to register with the Internal Revenue Service (IRS) and your state’s Department of Revenue.

Additionally, you may need to obtain permits for construction and building projects, such as those related to building a new restaurant. Depending on the scope of your project, these permits can cost anywhere from a few hundred to a few thousand US Dollars .

You may also need to obtain permits related to the sale and distribution of food products, such as a food processing plant license or a food service establishment license. Depending on the type of permit and your location, these costs can range from a few hundred to several thousand US Dollars .

Finally, you may need to obtain a variety of other licenses and permits related to the operation of your business, such as those related to the sale of alcohol, food storage, or health and safety regulations. The cost of these licenses and permits can vary greatly depending on the type of business you plan to operate and the regulations in your area.

Advertising and Marketing

Advertising and marketing are essential parts of any successful business, especially when it comes to starting a new business like a Gong Cha franchise. With the right marketing strategy, franchisors can create a recognizable brand, attract customers, and ensure that their products and services are well known. According to the 2019 Franchise Disclosure Document, the estimated initial advertising and marketing cost for a Gong Cha franchise is ,000.

It is important to keep in mind that these costs are estimates, and depending on the location of the franchise and the marketing strategy, these costs may be higher or lower. Therefore, it is important that potential franchisees work closely with their franchisor to determine the best strategy for their business and budget.

Advertising and marketing can include a range of activities such as television, radio and print advertising, as well as online marketing, website design and social media campaigns. It is important to develop a comprehensive marketing plan that outlines goals, target audience, and budget. Additionally, it is important to focus on creating engaging, high-quality content that will effectively communicate the brand message to potential customers.

It is important to consider the cost of advertising and marketing when calculating the cost of opening a Gong Cha franchise. However, it is also important to consider the potential return on investment that can result from an effective advertising and marketing strategy. With a well-executed advertising and marketing plan, a Gong Cha franchise can successfully reach its target audience and generate revenue.

Employee training costs

When opening a Gong Cha franchise, it is essential to include employee training in your budget. Training is necessary to ensure that your employees are knowledgeable and ready to serve customers. The training may involve the basics of running a Gong Cha store, such as understanding the product and menu, as well as customer service training.

The cost of employee training will vary depending on the size and scope of the training program. According to the US Bureau of Labor Statistics , the average cost of employee training in the United States is ,252 per employee . This cost may increase depending on the type of training program and the number of employees that need to be trained.

For a Gong Cha franchise, the cost of employee training can range from 0 to ,000 per employee . This cost may increase if you choose to provide additional training such as barista skills or customer service training. Additionally, the cost of employee training can also vary depending on the location of the franchise and the size of the store.

When budgeting for a Gong CHA franchise, it is important to consider the cost of employee training. Investing in employee training will ensure that your employees are knowledgeable and ready to serve customers. Additionally, investing in employee training will help you create a positive and welcoming environment for your customers.

Conclusion

Opening a Gong Cha franchise can be a rewarding and profitable business. However, it is important to understand the true cost of getting started and factoring in any one-time expenses necessary. The initial cost to open a Gong Cha franchise can range from ,000 – ,000 USD , depending on the size and location of your store.

Initial costs may include:

• Franchise fees
• Equipment purchases
• Signaling
• Display of devices
• Lease Improvements
• Rent/lease payments
• Licenses, permits, etc.
• Advertising and Marketing
• Employee training costs

However, with careful planning and budgeting, you can open your Gong Cha franchise and start bringing in profits before you know it!