Why Campus Coffee Shops Fail: Lessons from China

In late 2022, Future Garden, a nearly three-year-old coffee shop near the north gate of Jilin University’s central campus, quietly shut down. Its business listings vanished, its phone disconnected. Three young partners had once dreamed of building a reputable, long-lasting cafe—highlighted in a 2013 "Entrepreneurship Help" column—but the reality didn’t match the vision. What went wrong?

The short answer: Three critical flaws—uninspiring decor, part-time management, and unresolved partner conflicts—combined to kill the shop, despite good intentions. Industry veterans say these are common, often fatal, mistakes for campus cafes.

What Industry Veterans Say Went Wrong

Zhang Jingtao, 35, runs four successful coffee shops across Changchun, Shenyang, and Beijing—including the well-known Lao Zhang’s Time Coffee. He’s often consulted by aspiring cafe owners. When Future Garden’s manager called him for advice, Zhang quickly spotted multiple red flags. "The photos of the interior didn’t leave a strong impression," he said. "For a cafe, especially near a university, your first impression matters. If the design doesn’t stand out, you won’t attract or keep customers." He advised that even campus-adjacent cafes should aim for design standards on par with successful shops nationwide.

Zhang also pointed to a common issue: part-time ownership. Future Garden’s partners—Meng Qingji, Zhang Tianlong, and Li Bo—could only work there in their spare time. Meng’s girlfriend later managed it full-time, but even then, staff retention proved difficult. One employee trained in Beijing left after just months. Zhang warned that without a dedicated manager, hiring and keeping skilled staff becomes nearly impossible. He also flagged unresolved partner dynamics. "Last year, they hadn’t even discussed profit-sharing because earnings were low. I’ve seen partnerships fail over far less. If you’re opening with friends, assign a clear leader, track finances transparently, and agree on how profits are split upfront."

The Financial Realities Most Founders Ignore

Zhang emphasized that many young entrepreneurs romanticize cafe ownership. "Lots of young people want to open a coffee shop to express their lifestyle. That kind of idealism is dangerous," he said. Running a profitable cafe takes time. His own shops required investments between 300,000 and 800,000 RMB (for rent, equipment, staffing, and more). Even his best-performing location, Lao Zhang’s Time Coffee in Changchun, took over two years to break even. His Beijing shop remains unprofitable. "That waiting period is when most cafes close. Future Garden likely hit that wall," he added.

The Student-Run Alternative: My Home Coffee

Not all campus cafes follow the traditional ownership model. Southwest University of Finance and Economics hosts My Home Coffee, a two-story, student-run cafe operating on a cooperative, club-like model. In 2011, a couple sold the shop to four male students, who later passed it on to two women. Since then, it’s been run like a student organization: each year, new shareholders and baristas are recruited, and equity is transferred. Today, six female students share ownership, splitting costs equally, while over 20 part-time baristas each work one shift per week.

My Home Coffee’s primary goal isn’t rapid growth—it’s survival. "Our aim is to break even and avoid losses," said Cai Jinyi, a shareholder and former barista. Monthly expenses run around 2,000 RMB, with daily sales averaging just 100 RMB from one or two tables. The cafe promotes itself with flyers and occasional events, but avoids loud, crowded atmospheres. "Some previous shareholders liked to drink and talk loudly—we don’t want that," Cai noted. The current team includes business and finance majors managing departments for HR, operations, and marketing. Their focus remains on staying afloat, reinvesting small surpluses, and offering hands-on experience. "We’re not here to make a fortune, just to learn and keep the doors open," Cai said.

What Experts Recommend Instead

Jiang Zhonghua, founder of the nationwide Jingyi Brother bubble tea and coffee franchise (with 120+ outlets), once considered opening a stylish coffee shop. But after research, he concluded it was too risky for inexperienced, underfunded entrepreneurs. "You need to factor in rent, decoration, equipment, and staffing. The startup costs alone can easily exceed 400,000–500,000 RMB. Then there’s managing occupancy during holidays, setting prices students can accept, and keeping seats filled. It’s overwhelming," he said. Instead, he launched a bubble tea shop—which requires far less upfront investment and poses lower risk. "Most of our outlets are counter-service or have just one or two tables. Simple, but it works," Jiang explained.

Both Zhang and Jiang agree: if you’re looking for a low-cost, low-risk business, a tea or basic coffee shop is a smarter start. But regardless of concept, success hinges on consistent quality, great taste, and honest operations. "Don’t chase trends or ideals. Focus on the basics," Zhang said.

Frequently Asked Questions

Why did Future Garden coffee shop close after almost three years?

Future Garden closed due to a combination of poor interior design (which failed to attract customers), part-time management (leading to staffing issues), and unresolved partner disputes over profit-sharing. These factors, common in campus cafes, ultimately made the business unsustainable despite initial ambitions.

What are the most common reasons campus coffee shops fail?

Based on expert insights, common failure reasons include uninspiring or generic cafe design (failing to attract repeat visitors), reliance on part-time or absentee owners (resulting in poor operations and high staff turnover), and lack of clear financial agreements among partners (causing conflicts when profits are low or expenses rise).

Is it realistic for students to run a coffee shop together?

Yes, but with limitations. The student-run My Home Coffee at Southwest University of Finance and Economics shows that a cooperative, club-style model with shared costs, minimal staffing, and modest goals (like breaking even) can work. However, such cafes rarely achieve high profitability and require strong organizational skills and shared purpose among members.

How much money do you really need to open a campus coffee shop?

Experts estimate startup costs for a proper cafe range from 300,000 to 800,000 RMB (or $40,000–$100,000+), covering rent, equipment, interior design, staffing, and supplies. Simpler setups like bubble tea shops can start for much less (under 100,000 RMB), with lower overhead and faster break-even timelines.

Should a campus cafe focus on attracting students or the general public?

While campus cafes naturally draw students, experts suggest aiming for broader appeal with solid design, quality drinks, and service. Students want convenience and affordability, but a unique, well-designed cafe can attract off-campus visitors too—though that requires more investment and marketing.

What’s the best alternative business for students who want to enter the coffee industry?

Bubble tea shops or simple drip coffee counters have lower startup costs, simpler operations, and faster returns compared to full cafes. Many experts recommend starting there to gain experience before investing in a full-scale coffee business.

Recommended FrontStreet Beans for Campus Cafes

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