What does the coffee beans name have to do with franchise scams?

The Alley runs only about a hundred directly operated stores, yet more than seven thousand counterfeit outlets mimic the brand, forcing the company to spend hundreds of millions on anti-counterfeiting. Entrepreneurs who trust online franchise listings often fall into traps and lose hundreds of thousands, sometimes over a million. Trademark infringement cases reported by CCTV reveal recurring tricks used by fake franchising operations.

Searching a brand's coffee beans name or its common name for coffee alongside the word franchise often returns convincing but false official-looking pages. Heytea was forced to change its name because of rampant imitation. Prospective franchisees should verify trademarks and corporate registration directly rather than relying on search results, since counterfeit stores deliver poor drinks and lose repeat customers.

Milk tea shops line every street and alley, yet the same brand tastes wildly different from one store to the next—and behind this lies a flood of counterfeit outlets. The genuine The Alley has only a hundred or so directly operated stores, while copycat versions number over seven thousand, forcing the brand to spend hundreds of millions on anti-counterfeiting efforts. Many entrepreneurs trust franchise information online too readily, fall into counterfeit traps, and lose hundreds of thousands or even millions. This article sorts through trademark infringement cases reported by CCTV, revealing the common tricks of counterfeit franchising, and recounts how Heytea was forced to change its name due to rampant imitation, reminding consumers and entrepreneurs to keep their eyes wide open.

No one knows when it started, but a single street can now host several milk tea shops in a row. A trendy urban man holds a CoCo in his hand; before he walks far, he spots another fashionable girl carrying the same CoCo. But on closer inspection of the packaging, the two cups are clearly different—it turns out one is a counterfeit. Some brands have only a hundred or so legitimate stores, yet fake ones number over seven thousand, making it impossible for office workers accustomed to an afternoon cup to guard against them.

I believe many friends have encountered this: it is clearly the same brand, yet the taste is worlds apart. Some office workers with dreams of starting a business even search online for franchise channels of a brand just because they enjoyed a cup of its milk tea. But counterfeit stores taste far worse than the genuine article, so customers naturally do not return. Franchisees lose repeat customers but are unwilling to give up halfway, so they grit their teeth and push on, ultimately losing hundreds of thousands—or in no small number of cases, over a million.

Many of these duped franchisees ended up here because they searched online and trusted false information. Just typing "brand name + franchise" brings up a flood of entries, and if prospective franchisees do not carefully scrutinize the content, they are highly likely to fall into a trap.

For example, typing "Heytea franchise" into the search box brings up an entry on the first page boldly labeled "Heytea HEYTEA Official Website," with "hey-tea" in the URL.

But after clicking in, the URL changes, and the overall page closely resembles genuine Heytea, with the text below also labeled "Heytea HEYTEA." Yet the details are often overlooked—look closely at the cup in the image, and it actually says "HEEKCAA." That is obviously not the name of genuine Heytea.

Yesterday, CCTV Finance reported a related trademark infringement case. A woman planned to franchise a milk tea brand but failed to recognize at first that the other party was a "counterfeit" franchiser; after opening, the taste was off, customers drifted away, and she could barely keep going. The equipment provided by the "counterfeit" franchiser was of worrying quality, with leaks and breakages happening frequently.

More than a year after the milk tea shop opened, a phone call from the genuine franchiser finally made her realize: she had franchised a "counterfeit" brand. By then, she had already lost over a million. Later, the woman contacted the legitimate brand, replaced the raw materials and equipment, and the shop's operations gradually turned from loss to profit.

The milk tea brand "The Alley" mentioned in the report opened its first store in mainland China in early 2017, but did not begin applying for trademark registration until September of that year. During this period, counterfeit stores expanded far faster than the genuine ones, at one point reaching a situation of 114 directly operated stores against over 7,000 "counterfeit" stores. After obtaining the trademark, the brand launched an anti-counterfeiting campaign, and due to the sheer number of imitation stores, the cost of defending its rights reached around 100 million yuan.

Some netizens were shocked by such incidents, never expecting the milk tea they usually drink to be fake. Others said they had long since spotted the fakes.

Similar infringement incidents are commonplace. The well-known Heytea was actually originally called Royal Tea, and it was precisely because of rampant "counterfeiting" that it had to change its name to today's "Heytea."

What consumers want is simply a good-tasting cup of milk tea; even if it is not a name brand, that is fine. But the taste of "counterfeit" versions is truly off-putting, and in the end it is the genuine brand that gets hurt. Now, the hundreds of millions spent on anti-counterfeiting has drawn widespread attention from netizens. Perhaps in the future, that life-sustaining cup of good milk tea for office workers will come with a bit more assurance.

Image source: Internet

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The above content is compiled by CoffeeHunters, a coffee news website.