Introduction:The fierce competition between Luckin and Cotti is still unresolved, yet Cotti’s founder Lu Zhengyao has announced that Cotti will cross over into the milk tea market, sparking widespread concern and unease among its franchisees. This article delves into the challenges Cotti currently faces, including long payback periods for franchisees, difficulties in store operations, and the reasons behind the wave of store transfers, while analyzing whether the new brand “Tea Cat” can bring a turning point for franchisees.

The market competition between Cotti and Luckin continues to intensify, but even before a clear winner emerges, Cotti’s founder Lu Zhengyao has dropped another bombshell — Cotti will venture into the milk tea sector. This move has caused an uproar within the franchisee community, with many expressing anxiety about the brand’s future direction.

Recently, an open letter allegedly written by a Cotti franchisee has been widely circulated on social media. The letter details six major aspects, including supply stability, R&D capabilities, and operational strategies, listing Cotti’s current operational shortcomings and proposing specific improvement suggestions. The content directly points out deficiencies in Cotti’s supply chain management, product innovation, and operational support, resonating with many in the industry.

In the comments section, not only do fellow Cotti franchisees share their own experiences, but consumers also offer their views on their actual experiences at Cotti stores. Most feedback confirms that the operational and product issues mentioned in the letter do exist and have persisted for some time, severely affecting daily store operations and profitability.

For many franchisees, their biggest concern right now is: is it still profitable to continue operating a Cotti store? According to netizen estimates, the initial investment for opening a Cotti coffee store is around 400,000 RMB. Even if the store sells 500 drinks per day, it would still take approximately54 months (about four and a half years)to break even. However, the actual daily sales of many stores are far below this standard, with some selling as little as around 100 cups, potentially extending the payback period to over ten years.

One franchisee bluntly stated: “If you’re only selling a hundred or so cups a day, breaking even is as difficult as reaching the heavens.” Even though Cotti offers some subsidy policies, these subsidies often fail to truly offset high rents, labor, and ingredient costs, leaving overall operations in a loss-making state.

Since Lu Zhengyao announced that Cotti will launch a new milk tea brand “Tea Cat,” industry discussions have been ongoing. Some consumers hope Cotti can reignite a “price war” through the milk tea market, but many others question whether milk tea aligns with Cotti’s existing brand positioning. Some franchisees are even more concerned that Cotti’s shift toward the milk tea market may signal a gradual abandonment of coffee store operations, thereby affecting the future development of existing franchisees.

As 2023 draws to a close and the official launch of “Tea Cat” draws nearer, some franchisees choose to wait and see what the brand’s next move will be, but others have already lost faith in Cotti’s prospects. Recently, on social platforms, transfer listings for Cotti stores have appeared frequently, with timeframes ranging from just over a week to more than half a month. The increase in these transfer posts reflects that some operators are trying to exit early to minimize losses.

The franchisee who publicly wrote to Cotti’s management originally hoped that the brand would face up to the difficulties faced by franchisees and propose substantive improvement measures to stabilize morale and enhance the consumer experience. However, as of press time, Cotti’s official team has not made any public response to this letter, leaving many franchisees’ doubts and dissatisfaction to continue to accumulate.

Overall, Cotti is currently facing multiple tests from market competition, internal operations, and franchisee trust. Whether the new brand “Tea Cat” can become a turning point remains to be seen. But for many franchisees who have already invested substantial capital, finding a way out as quickly as possible has become their most urgent priority.

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