Why are coffee industry employee drink benefits being cut?

Employees at Heytea and Luckin Coffee have reported that stores canceled or reduced free drink benefits, citing weak performance. The perk is typically funded by franchisees rather than the brand, so directly operated stores largely keep it while franchise and joint-venture locations trim it. Some operators now limit cup counts, restrict drink categories, or cancel the benefit as a disciplinary measure.

The dispute highlights how cost pressure moves down to frontline staff and raises the question of who should pay for promised benefits. Because the brand advertises the perk but franchisees carry the expense, enforcement varies widely from store to store. The coffee industry is now watching how chains handle the gap between marketing and store-level practice.

In the coffee and tea beverage industry, "employee drinks" have always been one of the important perks attracting young people to enter the field. However, recently, multiple employees of Heytea and Luckin Coffee have exposed that their stores, citing declining performance, have canceled or reduced this benefit. An investigation found that employee benefits at directly operated stores are still retained for now, but workers at franchise stores and joint-venture stores frequently encounter shrinking benefits. The employee drink benefit promised by the brand is actually borne by franchisees, and some franchisees, in order to save costs, either cancel the benefit or strictly control the conditions for its use. This phenomenon has drawn industry attention: when the operating pressure of stores is passed down to frontline employees, who should pay for employee benefits? Front Street Coffee continues to follow developments in the coffee industry, and this article will take you through the ins and outs of this benefits battle.

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When it comes to the appeal of working in a coffee and tea shop, "free coffee" and "all the milk tea you can drink" are often the first benefits that come to most people's minds. For young people who love coffee and tea drinks, this employee benefit has even become one of the motivations for them to enter this industry.

However, recently, a Heytea employee posted on social media that they had received a notice from their store about terminating employee benefits. The notice mentioned that due to the store's continued poor performance, the company planned to cut costs and increase efficiency, and therefore would temporarily stop issuing the monthly employee Heytea card benefit.

Similar situations are not isolated cases. Another Luckin Coffee employee shared a screenshot of their internal group chat. From the screenshot, the person in charge of that store had already decided to reduce the number of employee cups and the selectable categories for staff, and made it clear that if employees were negligent at work, this benefit could be directly canceled.

These notices and messages concerning their own benefits naturally attracted the attention of many workers, and after reading the posts, many immediately asked their own stores about the actual situation.

Fortunately, the benefits for employees at directly operated stores still exist for now and have not been reduced as the posters claimed. But some employees at franchise stores and joint-venture stores reported encountering similar situations: "Our franchise has never had employee drinks or Heytea cards," and "Our boss is even stingier, one cup a month."

At present, most chain brands list employee drinks as a benefit in recruitment, and some applicants also said that during interviews they heard interviewers mention store rules that after joining, as long as certain conditions are met, they could enjoy employee drinks during idle periods.

But the actual situation reported by workers is that whether they can truly enjoy this benefit depends on the attitude of the store manager. Some said their store management was relatively lax, and employees could drink several cups a day, and even use the ingredients available at the bar to make their own drinks. Other employees said store management was not strict, and at the end of the shift they could pack up employee drinks to take away and share with relatives and friends.

However, some staff also revealed that when some managers find that store revenue has fallen short of expectations and performance is declining, they will take measures such as reducing employee benefits and prohibiting employees from using in-store packaging materials to lower store losses. This situation mostly occurs in franchise stores and joint-venture stores.

Unlike directly operated stores, the employee benefits promised by the brand are actually borne by franchisees. Therefore, some cost-conscious franchisees, in order to save money, will not follow the rules of directly operated stores and let eligible staff receive the benefits they deserve, but instead decide whether to allow employees to enjoy employee drinks based on the store's actual operating conditions.

Of course, some franchisees believe that a small number of workers will take advantage of their jobs to get freebies from the store, so they do not implement the brand's employee drink rules and directly cancel workers' benefits, which both saves costs and avoids waste.

Many workers admit that although they are in this industry, they may not drink a cup of milk tea or coffee every day, and the employee benefits given by the brand are not used every day. But once their store begins to strictly control costs and losses and decides to cancel employee drinks to cut costs and increase efficiency, it still makes staff feel disheartened and even prompts some to consider resigning.

Image source: Xiaohongshu

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