Why Is Luckin Coffee Warning About Fake Franchise Offers?

Luckin Coffee issued a formal statement on August 22 saying it has not opened any form of franchise cooperation and has suspended partner recruitment. All online offers involving franchising or agency for Luckin and its sub-brands are false. The warning follows counterfeit Luckin stores, including outlets in Bangkok, Thailand, and copycat names that sound similar to the brand.

The statement also addressed the brand's history: after the 2020 financial fraud crisis, Luckin suggested that Little Deer Tea partners convert their stores, and by May 2021 Little Deer Tea was merged into Luckin Coffee under unified management. For anyone considering opening a coffee store, the takeaway is to verify franchise information through official channels and treat unsolicited agent offers as a warning sign.

Recently, news about Luckin Coffee opening franchising has been circulating online, drawing attention from many consumers and entrepreneurs. However, Luckin officially clarified quickly: it has not opened any form of franchise cooperation at present, and all so-called franchise and agency information is fake. From counterfeit stores in Bangkok, Thailand, to scam tricks using homophone accounts, the problem of copycats keeps emerging. This article will sort out the key points of Luckin's official statement, the history of the Little Deer Tea brand's merger, and informed interpretations of the franchise suspension, to help coffee lovers and potential investors distinguish truth from falsehood and avoid traps.

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Some people feel a sense of familiarity when they unexpectedly encounter "Luckin Coffee" on the streets of Thailand in a foreign land; some stay in the office and order "Ruixin Coffee" to refresh themselves and satisfy their cravings; others stay at home, searching everywhere for franchise entry points, full of expectation of becoming part of Luckin. Just as many consumers were enthusiastically supporting these "Luckin" outlets, the real Luckin Coffee stepped forward and clearly pointed out that these are all "counterfeits" and "fake franchises."

On August 22, Luckin Coffee issued a formal statement regarding the chaos of "counterfeits" and "fake franchises." The statement emphasized that Luckin has currently suspended the recruitment of partners, and the specific timing for reopening should be subject to official announcements. At the same time, Luckin Coffee has not developed any sub-brands, and all information online involving franchising or agency for Luckin and its sub-brands is classified as false information.

This statement led many consumers to think of the "Little Deer Tea" brand that Luckin Coffee launched in 2019.

Looking back, after Luckin Coffee suffered a financial fraud crisis, the company suggested to Little Deer Tea partners that Little Deer Tea stores should gradually be converted into Luckin Coffee stores. By May 2021, the Little Deer Tea brand was officially merged into the Luckin Coffee brand, achieving unified management.

Luckin Coffee also specifically reminded in the statement that only accounts verified with the corporate blue V on major platforms are Luckin Coffee's official accounts. All other "non-V" accounts, as well as accounts and stores using homophone names (such as Ruixin, Ruishen, luckoncoffee, lckincoffee, etc.), are all counterfeit.

In addition, Luckin also stated that the official side will not proactively contact users for part-time recruitment, gift card recharge rebates, and similar operations. If consumers receive such calls, they should verify them through official channels.

According to The Beijing News, a relevant informed source revealed that Luckin Coffee's current situation may not actually be a suspension of franchising. On the one hand, the number of previous applications for Luckin Coffee franchising was relatively large and is still being gradually processed, with new stores opening one after another; on the other hand, Luckin Coffee may be preparing for cities it plans to newly open, because each time it enters a new city, warehousing, logistics, management, and other links all need to be arranged in advance.

It is understood that Luckin Coffee was previously rumored to have opened its first overseas store on the streets of Bangkok, Thailand. According to netizens, the "Luckin Coffee" in Bangkok, Thailand, opened on December 20, 2020. It was not until January 2022 that Luckin Coffee released a video clarification regarding the counterfeit "Luckin Coffee" store on the streets of Bangkok, clearly stating that Luckin Coffee had not yet opened a store in Thailand.

Finally, on August 9 this year, Luckin Coffee issued another statement confirming that the Luckin Coffee store in Thailand was a counterfeit, and that the relevant Luckin departments had already taken legal measures to defend their rights.

According to data from Luckin Coffee's previously announced second-quarter 2022 financial report, among more than 7,000 stores, more than 2,200 were affiliated stores, and the growth rate of affiliated stores was higher than that of directly operated stores. Luckin's development momentum is strong, which has also led many counterfeit franchisers and stores to take the opportunity to free-ride and make money.

In the rapidly developing coffee and tea beverage tracks, battles between the real and the fake are common. The emergence of pirated copycats not only damages brand value but also affects the brand's future development.

Image source: Luckin Coffee official Weibo, Luckin Coffee WeChat public account, internet

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