Coffee With You Franchise Collapses, Leaving Investors with $50K Loss

When Urumqi resident Wang Hao tried to open a Coffee With You café in early 2014, he paid a 500,000 RMB (around $50,000) deposit to secure his franchise. But before he could even open the shop, the company’s Shanghai headquarters closed, leaving him and hundreds of others without a business—or their money.

Wang Hao lost 500,000 RMB (approximately $50,000) in a franchise deposit to Coffee With You, which shut down its China operations before any stores opened. Despite police reports and a class-action group of 355 victims, he has yet to recover the funds.

What Was Coffee With You?

Coffee With You was a South Korean coffee shop brand launched in 2008. In April 2012, a Chinese investment firm, China Enterprise Asia Pacific Investment Co., partnered with the Korean brand to form Coffee With You Management Co., Ltd. in Shanghai. The goal was to expand the brand across China.

By 2014, the chain had reportedly grown to over 600 locations nationwide—including five shops in Urumqi. But behind the rapid expansion, operational and financial troubles were mounting.

How Wang Hao Lost His Deposit

In October 2014, Wang Hao signed a joint venture intention agreement with the northwest regional manager of Coffee With You at a hotel in Urumqi. He was told there were only five available franchise slots in the city and was urged to pay a deposit quickly.

He paid 500,000 RMB as an “intention deposit” to reserve his franchise. According to the contract, if he didn’t find a suitable location within one year, the company would refund the deposit. Wang Hao began searching for a storefront, and had just selected a location when he heard troubling news.

Friends informed him that several Coffee With You locations across China had already shut down. When he contacted the regional manager, he was assured the deposit would be returned. But soon after, Wang Hao discovered that the Shanghai headquarters had closed, and the Beijing-based major shareholder had disappeared. Attempts to reach the regional manager also failed—he had already resigned.

The Aftermath and Ongoing Investigation

Other franchisees also reported similar experiences and began filing complaints. Some traveled to Beijing to report the incident to police, who opened investigations under charges of contract fraud. Wang Hao joined a WeChat group of 355 other affected investors, known as the “Coffee With You Rights Protection Group.”

To date, none of the investors, including Wang Hao, have recovered their deposits. The rapid rise and sudden collapse of Coffee With You left hundreds of would-be café owners facing significant financial losses and no resolution.

Frequently Asked Questions

How much money did Wang Hao invest in the Coffee With You franchise?

Wang Hao paid 500,000 RMB (approximately $50,000) as a franchise intention deposit to Coffee With You in October 2014.

Did Wang Hao ever open a Coffee With You café?

No, Wang Hao had not yet opened a Coffee With You café. He had just selected a location when the company’s headquarters closed and the franchise opportunity fell through.

What happened to Coffee With You’s headquarters?

The Shanghai headquarters of Coffee With You Management Co., Ltd. shut down before most franchisees could open their stores, leading to the collapse of the brand’s expansion in China.

Was any money refunded to the franchisees?

As of the time of reporting, none of the franchisees, including Wang Hao, had received refunds for their deposits despite filing police reports and joining a group of 355 victims.

How many Coffee With You stores were operating in China in 2014?

By 2014, Coffee With You had over 600 stores in China, including five locations in Urumqi.

Are there any updates on the police investigation?

The police in Beijing have filed the case under contract fraud, but as of the report, no refunds have been issued and the case remains unresolved for the 355-strong victim group.

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