He Quit Banking to Sell Bubble Tea — Now It Makes Over $500 Million A Year

Key Concepts

• Founder Effect: The significant impact a founder has on a company’s trajectory and culture.
• Unit Economics: Analyzing the direct revenues and costs associated with each individual unit (in this case, a Gong cha store) to determine profitability.
• Master Franchise Rights: The right to develop and operate a franchise system within a specific territory.
• Reverse Acquisition: A private company acquires a publicly traded company, effectively becoming publicly traded itself.
• Systemwide Sales: The total sales generated by all franchise locations within a system.
• Financial Engineering: Applying financial principles and techniques to analyze and optimize business models.

From Banking to Bubble Tea: The Gong cha Story

Martin Berry’s journey from a high-flying banking career to building a global bubble tea empire, Gong cha, exemplifies a bold entrepreneurial leap and strategic expansion. Initially met with skepticism – his CEO famously questioned if he was joining a bank or pursuing bubble tea – Berry’s vision transformed a small Taiwanese tea shop into a multinational brand with over 2,000 locations in 30 countries and $578 million in systemwide sales in 2024.

Early Entrepreneurial Spirit & Corporate Ascent

Berry’s entrepreneurial drive surfaced early in life. Growing up near Melbourne, he demonstrated initiative by selling Christmas trees he sourced from publicly owned land, earning $10 for his efforts. This early experience highlighted his resourcefulness and willingness to take risks. He bypassed the typical university experience, proactively seeking employment while still a first-year student. He secured a job offer by directly approaching an HR director, offering to work without pay until graduation, and simultaneously completing his degree through night school. This early start allowed him to accumulate valuable experience by age 21.

By his late 20s, Berry had achieved significant success in the banking sector, managing multi-trillion dollar balance sheets at companies like Citi, Barclays, and Standard Chartered. However, he grew disillusioned with the corporate environment, citing a “lack of entrepreneurialism.” This dissatisfaction prompted him to seek opportunities to build his own business.

Discovering Gong cha & Initial Investment

The pivotal moment arrived in January 2011 in Singapore. While waiting for a haircut, Berry noticed a long queue at a Gong cha store. His initial assessment, based on observing the store’s operations, proved insightful. He noted the quick turnover (“velocity and turnover”), small store size (low capital expenditure), and the simple, potentially profitable unit economics – “water plus tea leaves and some ice.” He was impressed by the efficiency and financial viability of the business model, describing it as “incredible from a financial engineering standpoint.”

After thorough due diligence, including visiting multiple Gong cha locations, Berry secured the master franchise rights for Korea in June 2011 from Gong cha’s original founder, Zhen-hua Wu. At the time, Gong cha operated in only four markets: Taiwan, Singapore, Hong Kong, and the Philippines. He and his wife invested $2.5 million – their combined life savings from their banking careers – to open their first five stores in Korea.

Rapid Expansion & Strategic Partnerships

Berry’s strategy for entering the Korean market involved strategically positioning Gong cha stores next to Starbucks, aiming to capture a fraction of Starbucks’ customer base. This proved remarkably successful, fueled by the emerging power of social media. Within three months, stores experienced queues of up to 250 people on weekends. This rapid growth led to an unsolicited offer from major Korean department stores, resulting in a deal with Hyundai to open 30 locations within their stores in June 2012.

This partnership marked a turning point, enabling Gong cha Korea to scale rapidly. Within a year of launching, the business expanded to 50 stores, prompting the introduction of franchising. Within three years, the network grew to 300 stores. The business model evolved to include assisting franchisees with location scouting and store development, effectively operating as a “property real estate company.”

Acquisition & Global Reach

In 2014, private equity firm UCK Partners acquired a controlling stake in Gong cha Korea. Three years later, in 2017, Berry, in partnership with UCK Partners, orchestrated a reverse acquisition, acquiring Royal Tea Taiwan – the owner of the Gong cha brand. This move consolidated control of the brand and accelerated global expansion. The company began expanding into new markets, including the US and Mexico, transitioning from a regional Asian brand to a global contender.

Today, Gong cha boasts over 2,000 stores across 30 countries, generating over $570 million in systemwide sales in 2024. Paul Reynish, the current Global CEO, brings extensive franchise experience from brands like Subway and Burger King. Their initial connection stemmed from Reynish being a referee for a potential hire, leading to a partnership based on a shared vision of globalizing the brand.

Current Ventures & Philosophy

In 2019, TA Associates acquired a majority stake in Gong cha Global. Berry remains actively involved as co-founder, chairman, and shareholder. He is now focused on new ventures, including BeMe Wellness (a supplement brand) and Launcho Ventures (an AI venture studio). He also pursues a passion for professional racing with his son.

Berry emphasizes the importance of taking the “leap of faith” and pursuing entrepreneurial dreams, stating, “Once you've got a well-baked plan, it's never going to be perfect… then it's time to just go for it.” He views himself as a “custodian of the brand,” dedicated to realizing its full potential and achieving success for Asia on a global stage. He also acknowledges the importance of maintaining challenges, finding therapeutic value in activities like racing that demand focus and push personal boundaries. As he stated, “I love having something that still scares me.”

Notable Quotes

• Martin Berry: “If you’re waiting for the right time, it’s never going to come.”
• Martin Berry: “It never feels comfortable to make the step from getting a salary every month to then going and becoming an entrepreneur.”
• Martin Berry: “I see myself more of a custodian of the brand and I want to see this brand go on to much bigger things and truly sort of win one for Asia for a change.”
• Paul Reynish: “Gong cha is great. You know, the simplicity, the quality, the authenticity, and then the opportunity to get scale globally.”

This journey highlights the power of identifying a viable business model, strategic partnerships, and a willingness to embrace risk in achieving global success.