Shareholders do things in their own way. Shangdao Coffee is badly hit. The prospect is worrying.

The Shangdao coffee shop on the market presents a completely different style.

Shangdao Coffee is suffering from the double attack of Shangdao coffee brands and other coffee brands. It is understood that the responsible shareholders in eight regions are not satisfied with the current situation of regional expansion and have promoted new coffee brands to expand across the country. Franchisees continue to lose money and give up Shangdao brand to fend for themselves. Shangdao Coffee faces not only the impact of coffee brands such as Starbucks and Pacific [- 1.85% Research report], but also competition from shareholder-owned brands. Under the double-sided attack, Shangdao Coffee, which continues to indulge in management, will face the risk of being eliminated by the market.

Shareholders' innovative brands compete with each other for the market

Recently, Xi'an Diet [- 3.08% Fund Research] issued an announcement that it signed a "letter of intent" with natural person Wang Yangfa (51.8014% equity stake in Diou Food Management Co., Ltd.). It is intended to reach an agreement on business cooperation, equity participation or equity investment with Diou Food Management Co., Ltd., which is controlled by the other party.

The announcement also shows that Diou has three coffee brands: Diou Coffee, Osomilo Coffee and Shangdao Coffee (the right to operate is in Jiangsu, Liaoning, Henan, Guangdong, Guangxi and Yunnan provinces). To the surprise of the public, Diou Coffee and Osomilo Coffee, which have been the competitors of the above island coffee, should belong to the same company as the six provinces of Shangdao Coffee. And further understanding will find that Wang Yangfa, who holds a 51.8014% stake in Dior, is actually one of the eight major shareholders of Shangdao Coffee. A franchise manager in Shangdao Coffee Southern District told Beijing Business Daily that Diou Food Management Co., Ltd. is actually the Jiangsu branch of Shanghai Shangdao Coffee Food Co., Ltd. (hereinafter referred to as "Shangdao headquarters").

A reporter from the Beijing Business Daily saw on the official website of the Shangdao headquarters that the company has 13 branches. According to the internal staff of Shangdao Coffee, Shangdao Coffee is still managed by eight shareholders divided into eight regions. However, the branches owned by each shareholder are free to set up branches in their respective regions. "these branches are also accepted as headquarters branches, so there are 13 branches." The staff member said that Shangdao headquarters and Shanghai Pudong Branch belong to the same company, while Shanghai Shangdao Catering chain Management Co., Ltd., which can be directly searched on the website, belongs to Shangdao Puxi Branch. Responsible for Shanghai Puxi area and Hunan, Hubei, Jiangxi and other places Shangdao coffee management.

In addition to Dior Coffee and Osomilo Coffee, the official website of the Shangdao headquarters also shows two new brands, French Shepherd Steak Coffee and UBC Coffee. According to the staff of Shangdao Coffee Fujian Branch, these two brands also belong to the personal behavior of the shareholders of the branch, and do not belong to the sub-brands of Shangdao head office. "as Shangdao adopts regional management, regional shareholders want to set foot in markets outside their own regions, so they launch new brands." However, for the new brand, Shangdao Coffee headquarters refused to be interviewed by a reporter from the Beijing Business Daily.

As we all know, cross-strait coffee, which is already well-known throughout the country, was renamed by Shangdao Coffee in the first batch of stores. In response to the name change, a head of a cross-strait coffee shop once said, "the two sides of the strait have become famous throughout the country, far beyond the Shangdao, and the next focus of development is on the two sides of the strait, and Shangdao will be a secondary brand."

Xu Meng, secretary-general of the International Food Committee of the China Cuisine Association and secretary-general of the Beijing Western Food Industry Association, said that shareholders have set up new brands for national expansion, which can be understood as: the founding shareholders are no longer optimistic about the Shangdao coffee brand.

Franchisees give up their brands to fend for themselves

After a reporter from Beijing Business Daily reported that Shangdao Coffee franchisee withdrew from joining and changed its brand name (see "Shangdao Coffee off the altar" on July 15 for details), Shangdao Coffee in Changchun, Jinan and other places have also been exposed to join commercial stores and withdraw from joining.

Statistics show that, coupled with the opening of a new Shangdao coffee store, Shangdao coffee in Changchun has changed from 5 to 2. Prior to this, media statistics showed that the number of Shangdao Coffee in Chengdu dropped sharply from 20 at its peak to 12, and that in Tianjin from more than 70 at its peak to less than 40.

According to the official website of Shangdao headquarters, so far, Shangdao Coffee has more than 1300 stores in the country. According to an industry source, Shangdao Coffee in its heyday in the country a total of about 3000 stores, so far, "at least half of the stores have been closed."

In the view of most franchisees who withdraw from Shangdao Coffee, the brand franchise fee of more than 100,000 yuan a year, without management guidance and training, the attractiveness of the brand is declining day by day, and the business situation is also declining. A head of the development department of Shangdao Coffee said, "the stores that opened in the early days now either set up their own brand after the expiration of the contract or close the shop on their own."

Xu Meng says that it is no longer surprising that Shangdao Coffee is closed. "it can be said that Shangdao Coffee's closure is the inevitable result of its own writing and self-guidance." Xu Meng believes that Shangdao Coffee's almost zero management franchise system determines its chaotic development. with the gradual loss of brand value, closing the door is inevitable.

Shangdao coffee has entered the stage of brand consumption.

To analyze the reason why the sub-brand of Shangdao Coffee Branch is better than the core brand of the head office, it has to be traced back to Shangdao to divide the market into several major areas, which will be developed and operated separately by shareholders. This approach not only gives shareholders the right to develop freely, but also gives shareholders the opportunity to develop their own sub-brands with the same business model under the shadow of Shangdao Coffee. The rise of Dior Coffee and Cross-Strait Coffee is in this form.

Shangdao Coffee, which is no longer capable of fighting a war with brands such as Starbucks, COSTA and Pacific Coffee, is now facing attacks from founding shareholder-owned brands.

A coffee shop operator said that a large part of the reason why he chose to join is that he chose a well-known brand to join because he did not understand coffee culture and coffee management. This mentality of "hugging the thigh" makes the operator rely heavily on the brand. In response, Xu Meng once again mentioned that Shangdao Coffee did not give enough management guidance to franchisees, and also marked up the internal purchase price, which was "obviously a short-sighted suicide move."

Going downhill, and even to the end has become the consensus of the industry on Shangdao Coffee, and its joining model has been repeatedly regarded as a case of failed joining mode in the catering industry. Xu Meng points out that Shangdao Coffee has been selling brands, treating the brand as a cash cow and making money by charging franchise fees, completely ignoring the core of brand survival-management.

In Xu Meng's view, the brand is like the child of an enterprise and needs to be carefully nurtured. Shangdao Coffee's shareholders have not been United. As a new brand that has entered the market for less than 50 years, it has been consuming the brand from the very beginning. "more than a decade ago, combined with the dirty and messy situation of Shangdao coffee franchise at that time, it has been predicted that Shangdao Coffee's joining mode will clip itself to death sooner or later."

At the same time, Xu Meng says that the "simple meal + coffee" model is becoming more and more popular among young people, and there is a lot of room for development in the future. if Shangdao Coffee makes up for its urgent lack of management and learns the management model of mature brands, it may be possible to establish a complete management system, otherwise it will be eliminated by the market sooner or later.

Source: Beijing Business Daily