What do beverage chain closures mean for coffee shop growth?
HEYTEA has closed multiple stores across China since early November, including a decade-old location in Zhangye and a campus store at Zhejiang University. The company's September internal letter said it would stop chasing short-term store-opening speed and focus on store quality, and a partner has described tighter franchise approvals and higher build-out costs.
The closures span Gansu, Zhejiang, Shandong, Guangxi and Sichuan. For anyone weighing how much it does cost to open a coffee shop, the case shows how chain economics shift after rapid expansion: prime retail space gets returned, equipment is recycled, and franchise terms tighten. Beverage brands are consolidating rather than adding doors.
Since early November, HEYTEA has been reported to be closing stores in multiple cities, sparking widespread attention. Some netizens reported that their frequently visited stores suddenly shut down—not for renovation or upgrades, but permanent closure. According to statistics, stores closed in November include the Ganzhou Market store in Zhangye, Gansu; the Lanzhou Guofang Department Store store; the Zhejiang University Zijin'gang Campus store, and several other locations—among them both a decade-old established store and a new store open for less than half a year. This phenomenon is believed to be related to an internal letter HEYTEA released in September, in which the company stated it would no longer pursue short-term store-opening speed and would instead focus on store quality and operational excellence. Meanwhile, a blogger claiming to be a city partner revealed that HEYTEA's franchise policy is being adjusted: application difficulty has increased, store-building costs have risen, and there is even a trend of "restricting new store openings and encouraging closures."
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Since early November, HEYTEA has been successively reported to be closing stores in multiple regions.
Recently, a netizen posted on social media that a HEYTEA store they frequently visited suddenly closed without warning. After inquiring with the person in charge, they learned it was not renovation or upgrading but a complete cessation of business—even the benefits group was about to be disbanded.
Based on posts across social media, HEYTEA stores closed in November include the Ganzhou Market store in Zhangye, Gansu; the Lanzhou Guofang Department Store store; the Zhejiang University Zijin'gang Campus store; the Shandong Jiaozhou Liqun Shopping Center store; the Guangxi Nanning Impression City store; and the Emeishan Wannian Huadi Wealth Plaza store, among others.
Among these closed stores, some were the first store in the area with a decade-long presence, while others were new stores open for less than half a year—the latter even saw long queues during their initial opening. Although the reasons for each store's closure differ, they now all face the same outcome: signs being removed, equipment being recycled, and prime retail spaces being put up for rent, leaving many loyal customers feeling regretful.
In response, some speculate that these closures are most likely related to an internal letter HEYTEA made public in September this year. At that time, HEYTEA stated in the letter that in the future it would no longer make homogenized products or engage in pure low-price competition, but instead launch more differentiated products and brand activities. At the same time, HEYTEA made clear it would not pursue short-term store-opening speed and quantity; in the coming months it would control store density and focus more on opening quality and store operational quality.
Not long ago, a blogger claiming to be a HEYTEA city partner posted that HEYTEA's franchise policy is being adjusted—for example, application difficulty has increased, qualifications are harder to obtain, store-building costs and requirements have risen, requiring good locations and good image, while year-end subsidy policies have also been canceled to accelerate survival of the fittest: "restrict new store openings, encourage closures."
The post also mentioned that the approval rate for applying for HEYTEA store-opening qualifications is currently very low; even for existing franchisees, submitted reports are basically not approved. In the first half of the year, closing stores was difficult—the brand would provide subsidies to keep franchisees alive as much as possible—but now it is exactly the opposite: applications to close stores are basically approved instantly.
At the same time, the brand has set higher requirements for the location, size, and image of newly opened stores: locations lean more toward integrated commercial complexes, kiosk-style stores are no longer allowed, the area is 60–80 square meters, decoration standards are raised, and costs increase. "Calculated at 80 square meters, the decoration cost is now estimated at 250,000–300,000 yuan, and the total investment for full implementation is about 800,000 yuan, or even 1 million. However, for some smart machine equipment, the brand no longer requires mandatory purchase."
This post, combined with the continuously emerging closure reports recently, seems to corroborate what HEYTEA's public internal letter mentioned: no longer pursuing involution, and expanding stores prudently.
Image source: Xiaohongshu screenshot
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The above content is compiled by CoffeeHunters, a coffee news website.
