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

Courtesy of Kung Fu Tea

Bubble tea, or boba tea—a traditional Taiwanese drink filled with tapioca pearls—is exploding in popularity in America. We spoke with Kung Fu Tea's marketing manager Matthew Poveromo about how the franchise brand, which is ranked No. 57 on Entrepreneur's 2023 Fastest-Growing Franchises list, is harnessing that trend to accelerate growth.

How did Kung Fu Tea get started?

Our four founders are from Taiwan, and they saw an opportunity to bring authentic Taiwanese bubble tea flavor 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 rapidly when they opened up for franchising in 2011.

So what exactly is bubble tea?

Bubble tea, or boba tea, comes from Taiwan, and it's a traditional drink with either tea and milk or tea and fruit. Its most identifiable characteristic is these tapioca pearls at the bottom of the drink, and you have a larger straw so you can chew on these while you drink, and it's super delicious. It was created in the '80s in Taiwan and it came over to America in the '90's, mainly in urban areas with more diversity. But as demographics shift in America, you're now seeing it being embraced more and more in rural communities as well.

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

It was traditionally very big in cities and still is, but as people are leaving those cities, they're bringing this culture with them and sharing it with friends. It's a very communal, social drink. And also, when you are thinking of having a treat with a friend, bubble tea is a very strong alternative to traditional desserts. With bubble tea, you can control the sugar level and the ingredients that you're putting into it. It can be a very guilt free indulgence, so it's kind of riding the health trend.

With that rising popularity, there are more and more brands offering bubble tea now. 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 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.

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I also think it's our fearless brand. It's part of our identity that we're a little more bold and in your face, which I think a lot of people can relate to. And you see that in our social following. We're really focused on building a community on our social platforms. Related to that community building, we founded National Bubble Tea Day on our eighth anniversary, April 30th, 2018, and it's fun to see other brands in the space now celebrating it with us.

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 this is a fast-moving industry and are there to grow with us is priority number one.

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. 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 some partnerships lined up for 2023 which I'm very excited about. 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. It got our customers super excited. People made fan art and comics based on it, and that's how 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, which was essential for us these last few years, as it was launched right before Covid. Now we're overhauling our reward system and working on just having a top tier app and streamlining the ordering process. Ordering bubble tea can potentially be intimidating because you have the ability to 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 Ramen. We're really excited about offering dual concept stores to expand our portfolio offering not just for franchisees but for our customers as well.

Wavy Line
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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