Why would Gong cha shift to direct franchising from a traditional franchise model?

Direct franchising gives corporate greater control over supply chain operations, enabling standardization of procurement, inventory, and distribution practices. This reduces variability across locations and supports faster, more controlled expansion into new US markets while maintaining brand and operational consistency.

How does direct franchising affect supply chain complexity?

Direct franchising typically reduces complexity by eliminating multi-tier distribution networks. Gong cha can now work directly with franchise partners and control the supply chain playbook more uniformly, rather than managing relationships through sub-franchisors who may operate independently.

What operational advantages does supply chain standardization provide for QSR brands?

Standardization enables economies of scale in procurement, simplifies logistics routing, reduces lead times, improves inventory visibility, and allows the brand to negotiate better supplier terms. It also facilitates faster onboarding of new locations and reduces operational errors across the network.

How does this strategy support US growth for Gong cha?

By standardizing the supply chain playbook, Gong cha can replicate successful operational models quickly across new locations without reinventing logistics processes for each market. This accelerates time-to-market for new stores and reduces capital and operational risk associated with network expansion.

What challenges might Gong cha face implementing this supply chain overhaul?

Potential challenges include retraining franchise partners on new procedures, managing the transition from existing supply agreements, ensuring all locations comply with standardized practices, and maintaining service levels during the implementation period while the network scales.

Procurement

Moderate

Gong Cha Standardizes Supply Chain Via Direct Franchising

Jun 9, 2026

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The signal

Gong cha, a rapidly expanding bubble tea brand, has implemented a significant supply chain transformation by shifting to a direct franchising model designed to accelerate its US market penetration. According to Alan Davis, the company's Director of Supply Chain for the Americas, this strategic overhaul standardizes operational procedures across franchised locations, creating a more efficient and scalable distribution architecture.

The move from a traditional franchising approach to direct franchising enables Gong cha to maintain tighter control over supply chain operations while reducing complexity across its network. This structural change allows the brand to implement consistent inventory management, procurement standards, and logistics protocols—critical elements for a QSR (quick-service restaurant) expanding rapidly across multiple US markets.

For supply chain professionals monitoring the QSR sector, this development illustrates how fast-growing regional brands are adopting more sophisticated supply chain governance models to support geographic expansion. The standardization of Gong cha's supply chain playbook could serve as a blueprint for other emerging beverage or food brands facing similar scaling challenges, particularly in achieving operational consistency while managing the complexity of multi-location franchise networks.

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