Korean coffee brands run by cafes are caught in the storm of "frequent closures"

Caffe bene, a coffee brand from South Korea, closes its shop frequently and faces operational difficulties. The news stems from revelations from its internal employees to the media: coffee accompanies you due to poor management, the Chinese company is now frantically closing stores across the country, and there are a series of problems, such as arrears of wages, arrears of suppliers for goods, deceiving franchisees and so on. "most of the employees' wages in October have not yet been paid, and the two major shareholders of the company have also been evacuated," the employee said.

Yesterday, the Chinese official website of Coffee accompany you responded, saying it was "vilified by competitors in some industries", while some franchisees in Hangzhou said they were "unaffected". However, under its rapid expansion, the chaotic franchise relationship and the standard differentiated mode of operation have been criticized by the industry.

"there is a saying in our industry that many coffee franchisees make money not by opening stores, but by selling them." Industry insiders said. Not only coffee accompanies you, coffee shops of different brands have expanded crazily in Hangzhou in the past two years. I believe that the industry will soon face a big reshuffle.

Rumor: coffee accompanies you in the storm of "frequent shop closures"

The rumor began a few days ago when coffee accompanied your employees on the inside of the network. "with a three-month arrears of wages, most of the internal employees have left their jobs one after another, either on strike or for legal protection. The two major shareholders have been evacuated, the founder Jin Shanquan has returned to South Korea, and the top executives of Chinese companies have not been seen for a long time, not only breaking their promises to their employees, but also the intention deposit, deposit and franchise fees of joining partners. "

In fact, in addition to netizens' revelations that coffee accompanies you facing serious losses in the northern region, coffee shops such as Guiyang Friendship Road Store, Changshu Hualian Store and Fushun Wanda Store have closed down one after another.

Verify: Hangzhou store is currently in normal operation.

Yesterday evening, the reporter came to the coffee on the lakeside to accompany you. There were only two or three customers in the store. The staff said that this store is the only directly operated store in Hangzhou. At present, it can apply for membership cards and enjoy a 10% discount. The staff have not heard of the loss and closure.

The franchisee of Hangzhou Xixi Paradise Store also said that it was not affected by this, and the Hangzhou store operated normally. The reporter called Coffee to accompany you on the official hotline, and the phone has been busy, and on its official website, Coffee released a "letter to Coffee to accompany your partner" yesterday, saying: "some industry competitors have taken some improper measures to slander coffee to accompany you in the media, and we will face the challenge with a positive attitude."

Behind the storm: trapped in the chaos of joining

According to the data shown on the official website, there are currently 13 stores with you in Hangzhou. According to industry insiders, most of the stores in Hangzhou are franchisees, and the main mode of opening coffee with you is its self-proclaimed "entrusted business franchise model." in addition to a few direct-run stores in the country, more than 95% of the stores are franchisees. On the other hand, the franchise store takes 50% joining (half of the company and half of the franchisee) as the main mode.

Industry insiders revealed that coffee accompany your company's entry threshold for franchisees is not too high, some franchisees do not have experience in the catering industry, resulting in problems in location, operation and other aspects. "I have heard that there have been several franchisees competing for the same position, resulting in a substantial increase in rents. This is a problem that will never arise in the direct operation model. "

With the increase in the number of franchisees, it is also impossible for products to maintain the same level of taste as that of direct stores. Miss Cheng, who often goes to coffee to spend with you, complained online, "I found that there are products in all stores, including coffee and desserts." sometimes there are slight differences in appearance and taste, such as the same type of bread, go to the same store three times, each time the taste and style are different. There is obviously no standardization. "

Some people say that coffee accompanies you not by opening a shop, but by selling it. Of course, you can't say that completely, but once there is a problem with the brand's management of joining, it is reasonable for the franchisee to lose money. " According to the analysis of people in the industry, many brands charge high franchise fees and specify that all goods must be ordered from headquarters-- many goods are priced relatively high, and the operating costs of franchisees are also very high, making it even more difficult to make a profit.

The hidden worries behind the rapid expansion

It is understood that Coffee with you started in Korea in 2008, and now has more than 900 stores in Korea, and entered the Chinese market in April 2012. Subsequently, in order to promote business development, Coffee Management Co., Ltd. has set up seven districts and quickly opened stores in China, which are widely distributed in first-tier, second-and third-tier cities in China. In just two years, more than 500 stores have been opened in China.

A coffee merchant in Hangzhou said that in fact, in South Korea, coffee companions expanded crazily in the same way, and some stores were declared closed due to fierce competition in the same industry or even within the same brand, resulting in the failure of some stores to survive. But at the same time, it will open a number of new stores, and there will be far more new stores than closed ones.

Some franchisees posted a post on the forum, saying, "Coffee accompanies your entrusted entrepreneurial promotion in China, which varies slightly in different periods." At first, there were 5000 chain stores in China by 2015, then listed in Hong Kong "; then:" by 2015, there were 1500 chain stores in China, and then listed in Hong Kong "; then:" by 2015, the number of chain stores in China had reached 1000 "; recently," by 2015, it will become a world-renowned coffee chain brand ".

"in fact, Hangzhou Cafe is currently facing explosive growth, in addition to coffee with you, ZOO COFFEE is a similar model, behind the rapid expansion of cafes, the industry will also face a big reshuffle in the future." Industry insiders revealed.