Korean-Style Cafés in Chengdu Face Franchise Tensions

In Chengdu, a wave of Korean-style cafés has swept the city—but behind the trendy décor and celebrity endorsements, many franchise owners are grappling with financial losses, high operational costs, and weak brand support. What seemed like a golden opportunity is turning into a cautionary tale for aspiring café investors.

Over 20 Korean-style cafés have opened in Chengdu in just two years, but many franchisees report daily revenues as low as ¥5,000—far below the ¥12,000 needed to break even.

Korean Cafés Expand Rapidly Across China

Korean-branded cafés have grown explosively in Mainland China, with nearly 600 new stores opening in the past two years alone. According to a report by RET, coffee chains like Caffebene expanded to 407 stores within two years of entering the market—far outpacing the average annual growth of global brands like Starbucks, which adds roughly 78 stores per year. Other notable Korean players include Zoo Coffee, Ediya Coffee, and The Place.

In Chengdu specifically, 24 Korean-style cafés were operating as of the report’s release, with Caffebene leading at 14 locations, followed by Zoo Coffee with six. These cafés are typically located in high-footfall shopping malls such as Raffles City, Jinniu Wanda Plaza, and Global Center.

Marketing Through K-Drama and Celebrity Appeal

Korean cafés have successfully tapped into the popularity of Korean dramas and celebrities to attract a largely female customer base. Many cafés feature cozy, rustic interiors reminiscent of K-drama settings, often decorated with photos of Korean stars and cozy furnishings like overstuffed seating, bookshelves, and wish lamps.

Industry analysts note that brands like Caffebene have leveraged star power by signing actors such as Kim Soo-hyun as brand ambassadors and placing products in hit shows. This strategy effectively draws in fans seeking the “K-drama experience,” though some franchisees argue that the coffee itself plays a minor role in driving sales.

The High Cost of Franchising

Opening a Korean-branded café is expensive. One Caffebene franchisee reported an initial investment of around ¥3 million for a 700㎡, two-storey space. This included a ¥350,000 franchise fee and approximately ¥1.8 million in interior design, furnishings, and materials—often sourced through the brand at prices double or more than market rates. For example, a small ice machine reportedly cost ¥16,000 from the franchisor, compared to just ¥4,000 elsewhere.

Zoo Coffee’s website lists similar costs for a 200㎡ location: a ¥300,000 franchise fee, ¥100,000 deposit, ¥290,000 for design and supervision, ¥580,000 for kitchen equipment, and over ¥100,000 for branding elements, bringing the total to around ¥1.88 million. Most franchises require upfront investments exceeding ¥1 million.

Operational Struggles and Brand Friction

Many franchisees face significant challenges in maintaining profitability. Rent for a 700㎡ space can exceed ¥20,000 per month, while staff salaries and ingredient costs consume additional chunks of revenue. One owner calculated that daily sales would need to reach ¥12,000 just to break even—but actual sales often fall closer to ¥5,000.

Beyond financial strain, franchisees have criticized brand management for providing inconsistent standards, inadequate training, and overpriced supplies. Some report that key items like uniforms or equipment are priced well above market value and that operational guidance from the franchisor is minimal or ineffective. In several cases, the same brand’s cafés offer widely varying product quality and service experiences.

Zoo Coffee has shifted strategy in response, adopting a commissioned management model in Chengdu where partners provide capital but the company handles all operations. However, Caffebene has continued relying heavily on traditional franchise models, leading to mounting dissatisfaction among store owners.

Frequently Asked Questions

How many Korean-style cafés have opened in Chengdu?

As of the latest report, there are 24 Korean-style cafés in Chengdu, with Caffebene operating 14 locations and Zoo Coffee running six. Most are situated in busy shopping malls such as Raffles City and Global Center.

What makes Korean cafés popular in China?

Korean cafés appeal primarily to young female consumers by leveraging the popularity of Korean dramas and celebrities. Many feature cozy, rustic interiors with décor inspired by K-dramas, and brands often use Korean stars for marketing and product placement.

How much does it cost to open a Korean coffee franchise?

Opening a Korean coffee franchise typically requires an investment exceeding ¥1 million. For example, a 700㎡ Caffebene café can cost around ¥3 million, including a ¥350,000 franchise fee and roughly ¥1.8 million for interior design and materials. Zoo Coffee cites a total of around ¥1.88 million for a 200㎡ location.

Why are some Korean café franchises struggling?

Many franchises face financial difficulties due to high rent, staffing costs, and low daily sales—often only around ¥5,000 compared to the ¥12,000 needed to break even. Franchisees also report issues with inconsistent brand standards, overpriced supplies, and inadequate operational support from franchisors.

Are Korean coffee brands expanding quickly in China?

Yes. Korean coffee brands have opened nearly 600 stores in China over the past two years. Caffebene alone expanded to 407 locations in just two years, outpacing many international competitors in growth speed, though not always in profitability.

Recommended FrontStreet Beans for Café Use

For café owners navigating the Korean coffee trend, FrontStreet Coffee’s Ethiopia Humbera offers vibrant floral and citrus notes with a juicy body—perfect for pour-overs that highlight specialty sourcing. The Brazil Queen Manor provides a smooth, nutty profile ideal for milk drinks, balancing sweetness with low acidity. Both beans are freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.