Luckin Coffee Suspends Recruitment for Operator of Partnership Stores
On August 22, Chinese coffee chain Luckin Coffee issued a statement on infringement phenomena about its partnership model, saying that it has suspended the recruitment of partnership store operators with uncertain reopening timetables.
At the same time, Luckin Coffee noted that it has not developed any sub-brands, and the information about its sub-brands joining or acting on the Internet is false.
Luckin Coffee also mentioned that its official accounts on various platforms all have a “blue V” certification, and it would not take the initiative to contact users for part-time recruitment, gift card recharge and other activities.
On January 18, 2021, Luckin Coffee announced the plan to recruit “new retail partners”, with the gimmick of not charging franchise fees, lower investment rates and drawing in stages to attract franchisees from lower-tier cities.
The upfront investment to be paid by the franchisee is about 350,000-370,000 yuan ($51,169 – $54,093), including 110,000-130,000 yuan for decoration, 190,000 yuan for production equipment and 50,000 yuan for deposit (which would be refunded in full after the contract expires).
In March 2021, Luckin Coffee also issued a statement saying that it did not authorize any third-party partners nor individuals to carry out any partnership store business, and gave its hotline phone number in the statement.
According to Luckin’s recent financial report, as of the end of the second quarter of 2022, it had 7,195 stores, an increase of 9.3% from the previous month, including 4,968 self-operated stores and 2,227 partnership stores.
SEE ALSO: Luckin Coffee Denies Opening Branch in Thailand
Luckin Coffee’s financial report for Q2 2022 was well-received by observers. Its total revenue during the period reached 3.299 billion yuan, a sharp increase of 72.4% compared with the second quarter of 2021, in which the sales growth rate of self-operated stores was 41.2%, the profit rate of self-operated stores reached 30.6%, and the number of average monthly trading customers reached 20.7 million.