Using Coffee Machine Insight to Read Luckin's Franchise Move

Luckin Coffee announced a bring-your-own-store franchise model through its official WeChat account, opening joint-operation partnerships to investors who already operate stores or own commercial property. The first batch covers 241 cities nationwide, split into North, Central, and South regions, deliberately focusing on third- and fourth-tier markets rather than saturated first- and second-tier cities.

Specific franchise conditions and revenue-sharing terms have not been announced, but building requirements are clear: a mall, street-level, or office building location, at least 40 m² of area, a storefront of at least 4 m, and distance from pollution sources of at least 30 m. The move may pull investors who had planned to franchise with Cotti Coffee or other brands, as Luckin expands through self-operated stores, joint operations, and this new model.

Luckin Coffee recently announced through its official WeChat account the launch of a "bring-your-own-store franchise" model, opening joint-operation partnerships to investors who are currently operating stores or own commercial properties. Specific franchise conditions and revenue-sharing plans have not yet been announced, but building requirements such as store location, area, and storefront signage have been clearly defined. The first batch covers 241 cities nationwide, with a deliberate focus on avoiding saturated first- and second-tier markets. This move is seen as helping Luckin seize more prime locations and attract investors who had originally planned to franchise with Cotti Coffee or other brands to "flip" and join Luckin instead. Against the backdrop of intensifying competition in the coffee market, Luckin has officially entered the era of ten thousand stores, accelerating its expansion through a combined strategy of self-operated stores, joint operations, and bring-your-own-store franchising.

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A few days ago, Luckin Coffee announced through its official WeChat account the launch of a "bring-your-own-store franchise" model.

The "bring-your-own-store franchise" being offered this time is a new joint-operation partnership model based on the existing joint-operation framework, targeting investors with stores currently in operation during their lease term or with owned commercial properties. However, Luckin has not yet announced specific franchise policies and revenue-sharing terms.

According to the specific requirements, those who wish to become this type of franchisee must meet the following conditions: the store must be located in a shopping mall, street-level shop, office building, or similar location; area ≥40 m², storefront ≥4m, distance from pollution sources ≥30m, and other construction details; and the ability to independently apply for a business license and food business permit. The first batch of areas open for "bring-your-own-store franchise" has been divided by Luckin into the North Region, Central Region, and South Region, covering 241 cities nationwide. The vast majority of these bypass the nearly saturated first- and second-tier cities, focusing mainly on third- and fourth-tier cities.

It is understood that the advantage of this "bring-your-own-store franchise" model lies in seizing more market locations in advance and potentially rescuing stores with weak profitability. It typically appears in industries such as convenience stores, real estate agencies, and telecommunications services, but is actually uncommon in the food and beverage industry. It seems that in order to capture untapped markets, Luckin has really "pulled out all the stops" this time.

Luckin stated that the main reasons for opening the bring-your-own-store franchise model this time are as follows: the current Chinese coffee market is still in a period of rapid growth; Luckin is about to become the first chain coffee brand in the Chinese coffee market to reach a scale of ten thousand stores, with considerable advantages in scale and cost; after years of practice, the business model has matured. Since opening the joint-operation model, more and more investors have hoped to cooperate with Luckin, so this franchise policy is intended to provide more investors with an opportunity to quickly start a coffee business.

After Luckin introduced this policy, it immediately attracted the attention of some investors, including merchants who had previously wanted to join Luckin but turned to franchising other brands due to condition restrictions. Fundamentally, the "bring-your-own-store franchise" policy can make investors who have already franchised other brands turn their attention back to Luckin.

In response, on social media, an investor who is in the process of franchising Cotti Coffee said that the extra expenses were too high, and after seeing Luckin's new policy, felt very tempted and would consider "flipping to Luckin." Some netizens also pointed out that another intention behind Luckin's launch of bring-your-own-store franchising might be: "If your Cotti store can't survive and is about to close, you can just swap the sign and keep running with the coffee machines, equipment, and store as Luckin."

Under the "bring-your-own-store franchise" model, if franchisees of Cotti Coffee or other coffee and tea beverage brands fail to achieve stable revenue and their operations are unsatisfactory, directly switching to Luckin with their existing coffee machines and other equipment and stores is also an option worth considering.

In the continuously competitive Chinese coffee market, major brands have now reached a critical period of competing on speed and staying power. Facing competition in lower-tier markets, good locations and franchisees will be very key bargaining chips. Now, Luckin has officially entered the "era of ten thousand stores," not only seizing the market through self-operated plus joint-operation models, but also combining the "bring-your-own-store franchise" model to tap into other physical stores and push more offline shops to become part of its own camp.

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