The movement of milk tea began to appear from the end of 2016, exploding in 2017 and so far despite

being less vibrant, sill capturing the hearts of the public. Even enjoyingmilk tea has gradually become a
habit, a lifestyle of a part of young people. With that,the story of milk tea concession is also hoter than
ever. Milk tea market - A vibrant marketAccording to reports from Euromonitor, Vietnam milk tea
market is worth 282 millionUSD in 2016, the growth rate is 20% per year. In 2018, the tea industry is
expected togrow steadily at a rate of 5.7% per year and will coninue to increase by 2020.A survey by Lozi
recently announced that 53% of respondents surveyed drink milk tea atleast once a week. If in the past,
milk tea was mostly favored by students and students,nowadays, middle-aged and family groups ...
oten choose to buy this drink. Thepotenial customer ile of milk tea expands 15-34 years old,
accouning for 30% of thepopulaion. A large, high-proit customer ile makes milk tea business evaluated
by F&Bexperts as a prominent business trend, ater 6-12 months of capital recovery.What is "milk tea
concession"?Franchising, also known as franchising, is a form of cooperaion that allows you to usethe
brand's brand name or product brand.In the milk tea franchise in paricular, in addiion to complying with
the provisions of thecommitment, the franchisee will receive four main areas of business:- Brand
system- Products / Services- The secret of producing and processing productsStrategy, business model,
management policy, consuling support, opening, controlling,adverisingIf the franchise business is
smooth, good quality, the business must be trained in allproducion and processing processes so that
product quality remains unchanged. At thesame ime, they must be the ones who understand the
meaning of products, operaionmethods as well as training employees from the main brand.Gong Cha's
franchise storySpending billions of dong to investGong Cha is a long-standing and famous milk tea brand
in Taiwan. Around the world,this brand has developed in the form of franchise and up to now, Gong Cha
brand has

nearly 3,000 stores across 20 countries. Paricularly in Vietnam, Gong Cha has appearedsince 2014, with
the irst store located in Ho Tung Mau, District 1, HCMC.At that ime, according to Mr. Nguyen Hoai
Phuong, Director of Golden Trust Company,a franchise and management unit, Gong Cha chain operaion
in Vietnam, a number ofmilk tea shops appeared. by Ding Tea, Toco Toco, ... however, with a passion for
food,like drinking milk tea, there is a chance to go and go so much, when enjoying Gong Cha'smilk tea in
Taiwan, Mr. Phuong noiced the taste. This milk tea is much more deliciousand strange than the milk teas
he used to drink in Vietnam.At that ime, although he found himself unaware of the food and beverage
business(F&B), Nguyen Hoai Phuong sill wanted to bring Gong Cha milk tea to Vietnam. Mr.Phuong had
a problem with Gong Cha and "luckily, I met the founder Gong Cha. Aterlunch and conversaion, Gong
Cha agreed. ”Under the mutual agreement, Golden Trust is the exclusive representaive of Gong Chain
Vietnam. Mr. Phuong did not share the milk tea franchise fee but revealed it to be asmall number. In
return, Golden Trust received brands, formulas, materials, processes,operaional standards, operaions
and training programs from Gong Cha to develop thesystem in Vietnam.In addiion to franchising costs,
Gong Cha Vietnam Chain has to spend money to investin premises, decoraion and equipment
procurement. The average cost of opening milktea shops in many places is about 4-6 billion VND. But
according to Mr. Phuong, thisnumber depends on the level of investment of the units, so it is very
endless. As in GongCha, Mr. Phuong pays much atenion to the convenience and comfort of
customers.And Gong Cha oten chooses the locaion of the ground which is not too noisy,
spacious,convenient for entry and exit, parking space, and separate toilet area.Mr. Phuong also pays
atenion to the seaing space so that he is comfortable andinvests many cool air-condiioners. For
investment in equipment, in addiion topurchasing necessary items, Gong Cha also invested in ice
making cabinets and waterilters. Therefore, Gong Cha's investment costs may be higher than average.In
the beginning, because milk tea was sill unpopular, Gong Cha's shop workedmoderately. But
when the milk tea market exploded and the Gong Cha brand becamemore well-known in Vietnam,
ater about a year and a half, Gong Cha becameproitable. Along with Gong Cha, a number of
other tea shops such as Tien Huong, DingTea, etc. also recorded proits ater more than 1 year of
operaion.

Especially careful when franchisingAt present, milk tea has become a familiar drink for many people,
especially teenagersand oices. In the country, besides hundreds of Vietnamese milk tea brands such
asSunlower, Coco, Hot & Cold, Like, Alo Tea, Hebes ... and many spontaneous milk teashops,
convenience stores like Ministop, FamilyMart and supermarkets like Co.opmart,Aeon also sell milk tea.
Even cofee shops like Phuc Long and Highland, The CofeeHouse also serves drinks that are loved by
young people.In a bustling milk tea market, Gong Cha is sill considered a big brand with a large
andstable customer base.Although the Gong Cha store model requires large investments, from straws
and plasiccups to be imported, it leads to Gong Cha net proit of only 10-15%, much lower than50-60% of
many places, but some investors have quesioned the concession of GongCha from Golden Trust.
According to Mr. Phuong's disclosure, there are 3 partners whoreceive Gong Cha franchise and nearly
half of Gong Cha's stores are now franchised.Gong Cha Vietnam currently owns only about 50% of total
stores.Mr. Phuong did not give details of franchise costs. But looking at Dingtea, permanentfranchise
fee is $ 20,000, while in Toco Toco about VND 160-300 million / storedepending on
locaion and for 3 years; As a big brand, Gong Cha's cost of franchisingmilk tea is deinitely not lower.In
fact, whether it is a self-opening or franchising store, Gong Cha Vietnam sill regularlyconducts
inspecions, to ensure that Gong Cha's standards are uniformly implementedat every store. Gong Cha has
sancions if the partner violates. One of Mr. Phuong'sprinciples is that only if the partner violates the
regulaions on raw materials such asusing unideniied materials, adding doses, ... will he be deprived of
the license.In addiion, before negoiaing to concession, Mr. Phuong always had discussions tounderstand
the business perspecive of the partner. If it is the person who wants to earnmoney quickly and much
from milk tea, Mr. Phuong will limit handshakes. Becauseaccording to Mr. Phuong, although business
has to be targeted, but only in the ield offood, if it is too important to take proit, it is very easy to lead
the greed, will go todeceit and negligence in selling goods, service, reduce quality and harm to
customers'health.Mr. Phuong does not deny, milk tea is a bad drink for those who need to abstain
fromsugar and sweet. Therefore, although no one is required, on Gong Cha's website there is

more informaion about calories of each product, so that consumers have more adviceand choices.On
this basis, it can be seen that Gong Cha's orientaion is to focus on quality andservice, which is the key to
Gong Cha's success.ConclusionIn the next year, invesing in milk tea will always be proitable.
However, with itsposiion as a buyer of franchise stores, in today's ierce compeiion, apart
fromstrategies in business operaions, choosing a brand to franchise is also a big problem.Need to know
which brand has potenial in the market and its suitability for brandpersonality.