Find out how Kung Fu tea became one of the fastest growing entrepreneurial franchises of 2023

by Ana Lopez

Bubble tea, or boba tea, a traditional Taiwanese drink filled with tapioca pearls, is gaining popularity in America. We spoke to Matthew Poveromo, Marketing Manager of Kung Fu Tea, about how the franchise brand, ranked No. 57 on businessupdates.org 2023’s Fastest Growing Franchise list, is leveraging that trend to accelerate growth.

How did Kung Fu Tea start?

Our four founders are from Taiwan and saw an opportunity to bring the authentic Taiwanese bubble tea taste to America. They opened April 30, 2010 and took about a year for proof of concept, opening 13 stores and just working through the menu and really building out the infrastructure that allowed them to grow pretty quickly when they opened up for franchising in 2011.

So what exactly is bubble tea?

Bubble tea, or boba tea, comes from Taiwan and is a traditional drink with tea and milk or tea and fruit. The most recognizable feature is these tapioca pearls at the bottom of the drink, and you have a bigger straw so you can chew on it while you drink, and it’s super delicious. It originated in Taiwan in the 1980s and came to America in the 1990s, mainly in more diverse urban areas. But as demographics change in America, you’re now seeing it increasingly embraced in rural communities as well.

Why do you think bubble tea is becoming more and more popular in America?

It was traditionally very big in cities and still is, but as people leave those cities, they bring this culture with them and share it with friends. It’s a very common, social drink. And also if you are thinking of treating yourself to something with a friend, bubble tea is a very strong alternative to traditional desserts. With bubble tea you have control over the sugar content and the ingredients you put in it. It can be a very guilt-free indulgence, so it kind of follows the health trend.

With that rising popularity, there are now more and more brands that offer bubble tea. How does Kung Fu Tea stand out from the crowd?

Some of the other brands have a much larger global footprint, but maybe not necessarily in North America. Kung Fu Tea aims to be “America’s Bubble Tea”, so everything we do, from menu design and flavor profiles to brands we partner with, has this goal in mind. We’re focused on providing an authentic Asian and Asian-American experience while ensuring the drink becomes more mainstream in American culture.

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I also think it’s our fearless brand. It’s part of our identity that we’re a little bit bolder and in your face, which a lot of people can relate to, I think. And that is reflected in our social following. We’re really focused on building a community on our social platforms. In connection with that community building, we established National Bubble Tea Day on our eighth anniversary, April 30e2018, and it’s nice to see other brands in the space now celebrating with us.

What does Kung Fu Tea look for in its franchisees?

When we onboard franchisees at our New York headquarters, we always ask them, “Why Kung Fu Tea?” and the most important thing is just their experience with the drink. They are very passionate about the industry, the product and in particular our brand and the quality we put behind our fresh tea. We are not exclusively looking for people with franchise history or business history. What we Are search is adaptability. The industry is constantly changing, so having store owners who understand this is a fast-moving industry and want to grow with us is a number one priority.

What are your goals for 2023?

The number [of open stores] we’re circling on our whiteboards is 410. And for system-wide sales, we’re targeting $240 million. So those are two ambitious numbers to hit, and we’re very excited.

What strategies do you have for hitting those numbers?

One of the biggest is we have a number of partnerships for 2023 that I’m really excited about. In 2022, we teamed up with Nintendo to promote their latest Kirby game. We developed a custom cup and flavor called Kirby’s Fruity Flurry that was available for a limited time. Our customers were super excited about it. People made fan art and comics based on it, and that’s how you know it’s a successful program – if people don’t just like what you created, but it inspires them to create as well. So those are the kinds of partnerships we want to continue in 2023, with iconic brands and household names.

We’re also excited about our app, which has been essential to us over the last few years as it launched just before Covid. Now we’re reviewing our rewards system and working to have only a top-notch app and streamline the ordering process. Ordering bubble tea can potentially be intimidating as you can control the ice level, sugar level, toppings and flavors. So having an app that breaks that down in a simple way is really important.

Finally, we have two other concepts, TKK Fried Chicken and Yasubee Ramen. We are very excited about offering dual concept stores to expand our portfolio, not only for franchisees, but also for our customers.

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