Introduction:T97 Coffee, which once achieved record-breaking live-streaming viewership, has seen a sharp decline in popularity. The number of its stores has dropped from a peak of 87 to just 85, with multiple franchise outlets closing in various locations. The founder attributed the closures to individual franchisee issues, but many franchisees reported insufficient brand support and inconsistent product quality. This article provides an in-depth analysis of T97’s franchise model and uncovers the key reasons behind its high closure rate, aiming to help potential investors avoid potential risks.
Looking back at T97 Coffee’s glory days, its live-streaming room once hit an astonishing 8.09 million views, with broadcasts covering the entire day. However, today that same live-streaming room is limited to just four evening hours, with a drastically reduced audience—often just a few dozen viewers online at most. Meanwhile, the comments section under T97’s franchise recruitment account is flooded with negative reviews and skepticism.
What exactly caused T97 to cool off so quickly after such a high fever? Founder Li Xiao publicly stated the goal was to open 1,001 stores within a year, even boldly claiming they would surpass Luckin Coffee. But according to official data, T97’s physical store count grew from 48 in October last year to 87 in February this year, only to fall back to 85 by April.
Faced with a decline rather than growth in store numbers, Li Xiao explained in a short video he posted in February: “Two stores closed in Fuzhou, one in Nanning, one in Shijiazhuang, one in Anhui, one in Hefei, and one in Zhejiang. Over 80 stores were opened, and only six closed. Is that a high closure rate?” He also mentioned that T97 had only been in operation for half a year, and with over 80 stores, only six had closed, which he didn’t consider a high ratio. He further pointed out that these franchisees who closed their stores lacked basic knowledge of the industry, so he disagreed with claims that the brand was performing poorly—instead, he believed the main reason for closures was individual franchisee issues.
Li Xiao emphasized, for example, that despite the competitive beverage market in Changsha, T97 still managed to successfully open five stores there. He questioned whether attributing all closures to the brand was reasonable, suggesting more responsibility lay with the partners themselves. However, after the release of this video, T97 did not grow as he had expected, and the data presented in the video was not up to date.
In fact, as early as early February, netizens had exposed the closure of a T97 store in Shanghai. Although Li Xiao responded with, “Out of over 80 stores, only six have closed. Isn’t that a low closure rate?” the overall trend of a decline in total store numbers clearly indicates this ratio is far from optimistic. Some netizens also pointed out that Li Xiao only talked about the closure rate while ignoring the fact that many operating franchisees were actually struggling—most stores only lasted about two months, with none lasting longer than six months.
Since the release of the video in February, T97’s subsequent content has continued to receive little attention. Even though Li Xiao insisted on daily live-streams and answering questions on the spot, viewer numbers remained extremely low. The public has generally adopted a skeptical attitude toward his previous high-profile promotions and subsequent explanations.
Aside from short operating lifespans, many franchisees also faced issues with inconsistent product quality. Numerous consumers reported significant differences in taste across different T97 stores, with even those not particularly picky about coffee finding the flavor subpar. Some customers who purchased discount vouchers chose to let them expire and be automatically refunded due to disappointment with the products, rather than redeeming them for drinks.
Moreover, with the absence of the signature streamer “Big Mouth Sister” from the live-streaming room, other hosts—despite singing the same RAP—failed to attract audiences due to a lack of emotion and distinctiveness, resulting in a significant drop in the live-stream's appeal.
So why is T97’s store closure rate so persistently high? Investigations show that many franchisees were initially attracted to join by the brand’s short-lived spike in popularity. However, after signing contracts, the brand provided almost no effective management or operational support. Most franchisees lacked experience in both coffee preparation and store management, further dragging down the brand’s overall reputation and consumer trust. Ultimately, high operating costs, low profit margins, and waning popularity became common factors leading to losses and closures for many stores.
Industry experts point out that joining an immature emerging brand requires extra caution. Rashly opening franchises when the brand foundation is not solid can not only affect franchisee earnings but may also harm the brand’s long-term development. For prospective investors, in addition to focusing on the brand’s promotional figures, it’s crucial to deeply understand the actual operational conditions and brand support policies to avoid falling into operational difficulties.
The above content is compiled by CoffeeHunters, a coffee news website.
