Introduction:Luckin Coffee recently launched a new "store-with-store franchise" strategy, targeting existing operational stores and property investors, with the first phase opening in 241 cities nationwide, particularly focusing on third- and fourth-tier markets. This article provides an in-depth analysis of the core conditions, regional layout, and market strategy of this franchise model, and explores how franchisees of competitors such as Cotti evaluate the feasibility of "rebranding," offering practical insights and considerations for transition.

Through official channels, Luckin Coffee announced the launch of a new "store-with-store franchise" program. This new policy, based on a joint operation model, is primarily aimed at two types of candidates: current shop owners leasing and operating existing storefronts, and investors who own property with commercial rights. Although Luckin has not yet publicly disclosed detailed franchise thresholds or profit-sharing ratios, it has clearly outlined key store construction requirements, including details such as store location, size specifications, and signage dimensions. The program was first rolled out in 241 cities, deliberately avoiding the highly competitive first- and second-tier markets.

According to the published information, prospective franchisees must ensure that the store is located in high-traffic areas such as shopping malls, street-front shops, or office buildings. The store area must be at least 40 square meters, the storefront width must be a minimum of 4 meters, and the location must be at least 30 meters away from any pollution sources. In addition, applicants must be able to independently obtain a business license and a food operation permit—these are essential prerequisites before joining the franchise.

The first batch of "store-with-store franchise" areas is divided into the northern, central, and southern regions, covering 241 cities nationwide, with the vast majority of selected locations concentrated in third- and fourth-tier cities, deliberately avoiding the already saturated first- and second-tier urban areas. This move indicates Luckin’s intention to expand its market presence by securing high-quality yet less competitive locations.

This "store-with-store franchise" model is relatively common in the retail, real estate agency, and telecommunications service sectors, but it is a relatively innovative strategy in the food and beverage industry, especially within the coffee market. Through this approach, Luckin can quickly fill market gaps and even revive underperforming existing stores, demonstrating its flexibility and determination in market expansion.

Luckin officials stated that the multiple considerations behind launching this franchise model include: the Chinese coffee market is still in a phase of rapid growth, and the brand is on track to become the first domestic chain coffee operator to exceed 10,000 stores, thus enjoying significant advantages in economies of scale and cost control. Coupled with a mature business model developed through years of operation, as well as positive feedback from investors attracted by the joint operation model, Luckin has decided to further open up the "store-with-store franchise" to provide more aspiring coffee entrepreneurs with an entry opportunity.

This new policy has quickly drawn market attention, especially attracting potential franchisees who previously turned to other brands, such as Cotti, due to eligibility restrictions. Some investors have admitted that, considering the additional costs of other brands, they are now seriously evaluating the possibility of "rebranding" to join Luckin after seeing its flexible policies. Online discussions also suggest that Luckin’s move may be aimed at attracting franchisees from struggling brands, encouraging them to switch signage before closing down, thereby continuing to use existing equipment and premises by simply replacing the brand logo.

For existing franchisees of Cotti or other tea and coffee brands facing unstable revenue or operational challenges, transitioning their current stores and equipment (such as coffee machines) to Luckin as a whole could be a pragmatic transformation option. This strategy not only reduces the capital investment required for reopening a store but also allows them to seek a more stable operational model through Luckin’s brand influence and market strategy.

In the increasingly competitive environment of China’s coffee market, brand competition has entered a critical stage of speed and endurance. Securing high-quality locations and maintaining the quality of franchisees have become key factors in winning the market. After officially entering the era of 10,000 stores, Luckin, through a combined strategy of company-operated, joint-operated, and store-with-store franchises, is actively seizing market gaps and integrating more offline stores into its system, further solidifying its leading position in the market.

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