Gong cha rebuilt its US supply chain on direct franchising (interview)

What was changed

Gong cha Global wants a much bigger US footprint, and director of supply chain for the Americas Alan Davis says that required switching from a master franchising system to direct franchising — including acquiring 170 of its US master-franchise stores, with about 1,000 more units planned. Under master franchisees, stores had flexibility in how drinks were made and what equipment was used; direct franchising means a Gong cha in Chicago operates the same as one in San Francisco, with menu alignment and a single supply chain playbook.

The warehouse network is built around store density. Gong cha operates five full-service regional distribution centers in the US — handling receiving, sorting, inventory management and outbound — and only places them where there are enough stores to be efficient, asking operators whether pickup or delivery suits them better and skipping locations where freight costs make no sense. Some warehouses run specialized speed racks to keep first-in, first-out inventory discipline.

Sourcing got the same hands-on treatment. Gong cha imports raw materials from East Asia, controls its own customs brokers and importing rather than waiting on intermediaries, and — in the last two years — bought and now runs its own tea farms. Demand planning has to bridge a roughly three-month lead time from tea field and cup manufacturers to US stores, which Davis says is a constant expansion of freight lanes, hubs and distribution centers.

Why it worked

The model switch is the mechanism: direct franchising turns a patchwork of master-franchise variations into one standardized operation that a supply chain can actually serve.

Warehouse placement follows store density rather than coverage for its own sake — the network scales with the franchise map instead of ahead of it.

Owning tea farms and customs brokerage shortens the chain of custody for consistency and lead times that a three-month pipeline demands.

What can be applied

Franchise consistency is a supply chain product: own the stores, standardize the playbook, and let regional store density decide where warehouses go.

Aftermath

Davis describes US growth as accelerating, with the supply chain 'constantly expanding' — new freight lanes, hubs and distribution centers under evaluation. All store-count, warehouse and expansion figures come from the company in a Supply Chain Dive interview; independent verification of results is not given in the source.