What the T97 Coffee Closures Say About Franchise Risk

T97 Coffee's livestream once drew 8.09 million views; it now runs a four-hour evening slot with few viewers. Founder Li Xiao pledged 1,001 stores in a year to surpass Luckin, but official data shows the count rose from 48 to 87 and then fell to 85, with several stores closing. Li Xiao attributes closures to franchisees' personal issues.

Franchisees counter that the brand offers little management and support, product quality varies, and operations became unsustainable once the hype faded. The episode highlights the gap between traffic-driven franchise promises and day-to-day store economics, and gives anyone weighing a coffee franchise a concrete case to study before signing.

The T97 Coffee livestream, which once drew 8.09 million views, has now shrunk to a four-hour evening slot with only a handful of viewers. Founder Li Xiao once boldly claimed he would open 1,001 stores in a year to surpass Luckin, but official data shows store numbers rose from 48 to 87 before falling back to 85, with multiple stores closing one after another. Li Xiao attributes the closures to franchisees' personal issues, but many franchisees report that the brand provides little management and support, product quality is inconsistent, and once the hype faded, operations became unsustainable. This article examines the current state of T97 Coffee franchisees, explores brand responsibility and franchise risks behind the high closure rate, and offers reference for those considering joining.

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At the time, livestream interaction continued throughout the day, with peak viewership reaching 8.09 million. Now the livestream has been compressed to four evening hours, with only a few dozen viewers at most. Meanwhile, the comments section of T97's franchise recruitment account is flooded with doubts and negative reviews.

What exactly happened? Why did T97's popularity suddenly cool down?

Facing what was once high traffic, T97 Coffee founder Li Xiao publicly declared he would open 1,001 stores within a year, with surpassing Luckin as his goal. The reality, however, is that last October there were only 48 offline stores, which grew to 87 by February this year, then shrank to 85 by April (according to official data).

Store numbers declining instead of growing, yet Li Xiao sees nothing wrong with it. In a short video posted in February, he discussed T97's real situation, saying roughly: "Fuzhou closed 2, Nanning closed 1, Shijiazhuang closed 1, Anhui closed 1, Hefei closed 1, Zhejiang closed 1. Don't you want to ask why these 6 closed? We opened over 80 stores in total and 6 closed—is that (closure rate) high?

We (T97) have been open for half a year and 6 closures—is that high? These (franchisees who closed) lack the most basic understanding of this industry, so out of over 80 stores only 6 closed. You think the brand is bad—I (Li Xiao himself) don't agree. As for the reasons for the closures, I'll discuss that later. Once T97 truly grows strong, I (Li Xiao himself) will explain to everyone.

He also mentioned that Changsha's beverage market is highly competitive, yet he could still open 5 stores there. If you say the closures are entirely my (Li Xiao himself) responsibility, then I (Li Xiao himself) won't admit it. In fact, it's largely related to the partners themselves—most closures are due to their personal reasons."

The video ends there. Since then, Li Xiao has never posted content discussing T97's current situation, and T97 has not grown strong as he wished. The video data from February 21 is also long out of date.

As early as the beginning of February, netizens had already revealed that a store in Shanghai had closed. The line in the video—"Over 80 stores and 6 closed, is the closure rate high?"—on the surface the number isn't high, but against the backdrop of total store numbers declining rather than growing, this ratio is clearly not optimistic.

At the same time, some netizens pointed out that Li Xiao only talked about the closure rate but never mentioned the situation of franchisees still operating—one could say most of them are barely keeping afloat. Most franchise stores operate for only about two months, with none lasting more than half a year.

After the February video was posted, subsequent content drew little attention. Even though Li Xiao persisted in livestreaming daily and answering calls on air, viewers were few and far between. Everyone remains cautious about his past grand claims and later explanations.

Moreover, the product quality at each store struggles to retain customers. Many netizens report that products vary greatly between stores—even those without high standards for coffee find the taste poor... They buy coupons but don't want to use them, letting them expire and auto-refund, so they have no desire to redeem drinks at all.

On top of that, after Big Mouth Girl stopped appearing in the livestream, other hosts performing the same rap lacked soul and emotion, completely lifeless, which also made consumers lose interest in the livestream.

Why is T97's store closure rate so high?

Many franchisees were drawn in by the brief surge in popularity. But after signing, the brand barely fulfilled any management duties toward the stores, and most franchisees were unfamiliar with coffee-making and store operations, which directly dragged down the entire brand's reputation and consumer trust. Ultimately, a large number of stores closed at a loss due to high costs, low profits, and fading hype.

The inability to profit is more a problem of the brand itself. Absent management, lack of product innovation, and no strong product competitiveness—how easy is it to win business in competition? Yet Li Xiao says this is the partners' personal problem, with little to do with him.

As the old saying goes: when joining a brand that hasn't yet gotten on track, everyone must be a hundred times more cautious!!! Setting aside whether franchisees can quickly turn a profit after opening, opening franchises when a brand's foundation is not yet solid is itself something worth pondering.

Image source: Internet

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