Bain Capital is buying Gong Cha
Bain Capital's acquisition of Gong Cha signals major investment in the bubble tea market.
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Bain Capital is acquiring Gong Cha, the 2,200-unit bubble tea chain, from TA Associates. Gong Cha has 289 locations in the U.S. and Canada, though its domestic growth has recently slowed. The acquisition gives Bain a footprint in the growing beverage market as Gong Cha plans to accelerate unit growth and innovate with a new 'digital kitchen' concept.
Why It Matters
This acquisition may compress available territories for future franchisees, as Gong Cha focuses on revitalizing its growth strategy in the U.S. and enhancing its unit economics through innovative store formats.
Bain Capital is acquiring the bubble tea chain Gong Cha from TA Associates, although the terms of the deal have not been disclosed. Gong Cha operates 2,200 locations worldwide, with 289 in the U.S. and Canada, and has established itself as one of the largest players in the bubble tea market. Naofumi Nishi, a partner at Bain, noted, "Gong Cha has built a distinctive and globally recognized brand with a loyal customer base and franchisee economics that are among the strongest in the sector."
The acquisition comes amidst a challenging economic environment for restaurants, with Gong Cha's domestic growth slowing recently. According to data from Technomic, system sales grew by 3.3% in 2025 to $121.6 million, a decline from its previous growth trajectory, as the chain added only 12 locations over the last two years compared to an average of over 30 per year prior. In response, Gong Cha is adjusting its franchising strategy and has obtained master franchisee rights in both Eastern U.S. states and the West Coast. Additionally, the company has announced plans to open 50 new locations in Texas over the next seven years in partnership with Bakers Acres & Cattle.
As part of its growth strategy, the franchise is introducing a “digital kitchen” concept aimed at enhancing store flexibility and efficiency amid a burgeoning beverage market. The acquisition is expected to close towards the end of this year, potentially positioning Bain Capital to benefit from growing consumption trends in beverages. Financial advisory support was provided by J.P. Morgan and NorthPoint for Gong Cha, while Nomura Securities advised Bain.
The implications for franchisees in the Gong Cha system may include modifications in the royalty structure and operational support as Bain implements its growth strategy. Furthermore, regulatory approvals may be necessary depending on the scope of the acquisition. Going forward, attention will likely focus on how effectively Gong Cha can ramp up its expansion amidst a fluctuating market landscape.
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