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How Kung Fu Tea Became One of Entrepreneur's Fastest-Growing Franchises of 2023 Marketing manager Matthew Poveromo explains how the franchise brand is turning Taiwanese bubble tea into a favorite American treat.

By Tracy Stapp Herold

entrepreneur daily

This story appears in the June 2023 issue of Start Up.

Courtesy of Kung Fu Tea

The drink goes by many names: bubble tea, boba tea, pearl milk tea, tapioca tea. But whatever you call it, you've surely seen it all across America — with its colorful liquids and tapioca balls. The drink originated in Taiwan in the 1980s and then made its way to America, where brands are now recognizing its huge consumer demand.

One of the leaders in the space is Kung Fu Tea — a brand founded by four Taiwanese entrepreneurs who opened their first store in April 2010, spent a year perfecting the concept, opened for franchising in 2011, and now have more than 300 locations. Marketing manager Matthew Poveromo spills the tea on how it happened.

Related: The Only 6 Strategies You Need If You Want Your Food Franchise to Thrive

What's fueling bubble tea's popularity in America?

It was traditionally very big in cities, and it still is. But as people are leaving those cities, they're bringing this culture with them. And with bubble tea, you can control the sugar level and ingredients. It can be a very guilt-free indulgence, so it's kind of riding the health trend.

How does Kung Fu Tea stand out from the crowd as more brands enter this space?

Some of the other brands have a much larger global footprint, but maybe not necessarily in North America. Kung Fu Tea is focused on being "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 at the same time helping the drink become more mainstream in American culture.

What does Kung Fu Tea look for in its franchisees?

When we onboard franchisees in our corporate office in New York, we always ask them, "Why Kung Fu Tea?" and the biggest thing is just their experience with the drink. They're very passionate about the industry, the product, and specifically our brand and the quality we put behind our fresh tea. We're not exclusively looking for people with franchise history or business history. What we are looking for is adaptability. The industry is always changing, so having store owners who understand that and are there to grow with us is priority number one.

Related: 6 Tips to Drive Sustainable Business Growth

What are your goals for 2023?

The number [of open stores] we're circling on our whiteboards is 410. And for systemwide sales, we're aiming for $240 million.

What strategies do you have for hitting those numbers?

In 2022, we partnered with Nintendo to promote their newest Kirby game. We developed a custom cup and a custom flavor called Kirby's Fruity Flurry that was available for a limited time. People made fan art and comics based on it. You know it's a successful program when people don't just like what you created, but it inspires them to create as well. So those are the types of partnerships we're looking to continue in 2023, with iconic brands and household names.

We're also excited about our app. We're overhauling our reward system and streamlining the ordering process. Ordering bubble tea can be intimidating because you can control the ice level, sugar level, toppings, and flavors. So having an app that breaks that down in a simple
way is very important.

Finally, we also have two other concepts: TKK Fried Chicken and Yasubee (a ramen brand). We're really excited to expand our portfolio for both our franchisees and customers.

Related: 2023 Fastest-Growing Franchises Ranking

Tracy Stapp Herold

Entrepreneur Staff

Tracy Stapp Herold is the special projects editor at Entrepreneur magazine. She works on franchise and business opportunity stories and listings, including the annual Franchise 500.

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