article | "Financial World" Weekly Yang Qiao
editor | Yang Jie
The new tea market is still hot, but many milk tea franchisees are starting to get anxious.
Behind the boom in the tea drinking industry, chaos in the milk tea franchise industry is emerging. Milk tea "Quick Recruitment Companies" under the banner of "celebrity endorsement" have been making waves recently, including "Cha Zhilan" endorsed by Ma Yili, "Tea Anchor" endorsed by Zheng Kai, "Happy Formula" endorsed by Li Weijia, Milk tea brands such as "Monkey's Rescue", which is known as "Monkey's Rescue" co-founded by Zhang Jike , have exposed the problem of franchisees' stores losing money and being unable to get refunds.
Some franchisees who have joined regular milk tea brands and enjoyed the benefits in the early years have also found that it is becoming increasingly difficult for them to make money amid fierce competition on the milk tea track. When young people are willing to spend 100 yuan a week to drink milk tea, joining a milk tea shop has become a "difficult" business.
Milk tea franchisee who fell into the "pit"
Huang Ke, who has been engaged in restaurant chain brand management, saw the craze of opening tea drink stores in 2019, and couldn't help but be moved and wanted to participate. He noticed that at that time, a new milk tea brand "Monkey's Rescue" appeared in the new tea drinking industry and was vigorously promoting and expanding stores in second- and third-tier cities.
Huang Ke said that he went to Beijing at the time and when he came into contact with this milk tea brand, all he heard was that "Sports star Zhang Jike is our co-founder", " Wang Sicong , Xu Xiaoping have all invested", " We will also hold a brand launch conference in September to promote the brand" and other remarks, which made me even more excited. Coupled with the brand promise, the company headquarters can help regional agents recruit single stores to join, and can guarantee 70% to 80% gross profit. This business, which sounds like a "guaranteed profit, no loss", made Huang Ke choose to join 4 single stores on the spot, and won the I took the position of district agent in Fengze District, Quanzhou, Fujian Province.
Huang Ke told " Finance World " weekly that he paid nearly 270,000 yuan in fees at that time, including an agency fee of 88,000 yuan, a deposit of 20,000 yuan, and four single stores totaling 40,000 yuan. Deposit, management fee of 24,000 yuan and advance deposit of 100,000 yuan for goods.
In June 2019, Huang Ke’s two stores opened for business. But after he waited until September, the brand launch conference that the company had promised was delayed, and his own account on the company platform was suddenly closed. Huang Ke said that there was still more than 60,000 yuan left in the account at that time. He asked the brand employee who ordered the order, and the answer he got was: "The company has no money, and we are still doing things."
At the beginning of 2020, Huang Ke said that he Received a notice from the company headquarters that the company intends to allow agent franchisees to voluntarily sign an agreement to withdraw from the franchise. At that time, Huang Ke still had two stores that were not open. He signed an agreement to withdraw from one of the stores, but nothing happened next.
According to Huang Ke, after he joined the brand, due to lack of brand promotion and sparse customer traffic, the two existing stores currently suffered a direct loss of more than 600,000 yuan. In addition, he complained that although the company charged a high franchise fee, the later operation and management were not in place, and he could only operate it on the food delivery platform; what made him even more helpless was that although he got a "regional "Agent" title, but he found that there was a franchisee of the same brand opening a store downstairs from his home, but he himself did not receive any news from the brand.
Huang Ke told Caijingtianxia Weekly that in May 2021, the company headquarters once again asked agent franchisees to withdraw. Huang Ke wanted to clear out all franchise stores and get at least 60,000 yuan in deposits and security deposits, so he signed another agreement. However, after the agreement was sent back to Beijing, there was no further movement.
Huang Ke, who wanted to get his deposit back, joined the rights protection group of brand agents and single-store franchisees. As far as he knows, there are currently hundreds of single-store franchisees in the franchisee rights protection group.
Another franchisee Zhou Qi is considered "lucky" compared to Huang Ke.He also came into contact with "Monkey's Rescue" in 2019. At that time, driven by the brand's vigorous publicity, he only paid a deposit and management fee of more than 50,000 yuan. But then he discovered that starting from July 2019, many franchise stores had closed one after another. At the same time, the brand launch conference had not been held. He realized that "something was wrong", so he did not open a store, but directly chose to go to the store. The company applied for a refund.
But until now, like Huang Ke, Zhou Qi has not gotten back his 50,000 yuan.
"Financial World" weekly found that the current "Monkey's Rescue" brand's official Weibo note is Henan Monkey's Rescue Catering Management Co., Ltd. The official Weibo also released information in June this year that "Monkey's Rescue" is a tea brand founded by sports star Zhang Jike as a partner in 2019; Zhang Jike himself also posted on the Weibo on June 8 Posted a related Weibo. However, according to Tianyancha App, the company operating the "Monkey's Rescue" brand is Monkey's Rescue (Beijing) Catering Management Co., Ltd., and its legal representative and actual controller is Zhao Zikun. There is no connection with Zhang Jike in the company's public information.
There are many similar milk tea brands on the market, using various "celebrity endorsements" and other banners to recruit franchisees, but after charging fees, they do nothing. The industry generally refers to such brands as "quick hire companies." Since the beginning of this year, many quick recruitment companies have become popular.
Not long ago, some media reported that the "Happy Formula" brand endorsed by Hunan Satellite TV host Li Weijia ran away. Franchisees who suffered heavy losses had no choice but to denounce Li Weijia to defend their rights. In May this year, the "Cha Zhilan" brand endorsed by celebrity Ma Yili was involved in a "routine franchise" milk tea shop fraud case, with a suspected fraud amount of up to 700 million yuan. The Shanghai police intervened in the investigation, and Ma Yili's studio had to apologize on Weibo.
Why is milk tea franchise so popular?
Countless franchisees hope to realize their dream of "making money while lying down" by opening milk tea shops.
The new tea drinking track has become increasingly popular in recent years. Nayuki's tea was successfully launched this year, and brands including Hi Tea , Mixue Bingcheng , Tea Momodo and other brands have also been reported to have been launched. Although some tea drink brands have denied this, it is difficult to conceal the enthusiasm for investment in new tea drinks. According to Tianyancha data, so far, about 22 financing events have occurred on the new tea drinking circuit in 2021, with a total financing amount of more than 6.5 billion yuan.
The market size of new tea drinks continues to expand. According to Tianyancha information, as of September 16, 2021, there are currently more than 378,000 companies in my country whose names or business scopes include "tea beverages, milk tea, food and beverages", and their statuses are "active, existing, moving in, moving out" "A new type of tea beverage related enterprise. Among them, most of the new tea beverage companies are small and medium-sized enterprises established in the past five years. More than 90% of the new tea beverage companies are individual industrial and commercial households, and 24.4% of the new tea beverage companies were established within one year.
Northeast Securities data shows that the consumption of new tea drinks is high-frequency and highly sticky, with more than 53% of consumers consuming 2 cups or more per week. New tea drinks have become a lifestyle for the younger generation. Data from Meituan Data shows that nearly 20% of those born after 95 spend more than 100 yuan on milk tea every week, and nearly 50% of those born after 95 drink 2-4 cups a week.
Small and medium-sized franchisees are also rushing to join in and get a piece of the pie.
As early as 2016, Teng Yi saw the huge potential of the milk tea market in Guangdong. “When I was in Shenzhen, I found that the milk tea shops on the roadside were generally open for a long time. In addition, I could intuitively feel the popularity of milk tea brand stores on the group buying platform at that time, and saw their sales and consumer reviews. "It was also that year that the milk tea industry overturned the previous image of milk tea in one fell swoop, and new tea drinks that combined tea, fresh milk, fresh fruits and other ingredients appeared.
In the new tea drink market, high-end tea drinks, mainly Heytea, Naixue's Tea, and Lele Tea, occupy the first- and second-tier city markets, but these high-end new tea drink brands are basically self-operated; Mixue Low-end tea drinks, mainly Bingcheng, are dominant in third- and fourth-tier cities and lower-tier markets. Mid-range tea drinks brands are in full bloom, and they have also become the targets of franchisees.
Teng Yi saw the popularity of tribute tea in Guangdong and chose to join the brand. To invest in a 25-square-meter tribute tea franchise store, Teng Yi said that he spent a total of 350,000 yuan. "The first reason I chose to join the brand was to enjoy the brand effect it brought, and the second reason was that they provided raw materials to ensure the taste of milk tea," Teng Yi said.
Brand marketing expert Chen Xuan also believes that from 2017 to 2018, the milk tea industry was at the forefront. After the opening of Teng Yi's franchise store, the turnover skyrocketed. For example, he said that in April of that year, the store's turnover was 40,000 yuan, and it increased month by month. It would reach 110,000 yuan in November. In that winter, the store could maintain a monthly turnover of 80,000 to 90,000 yuan. state. Although the store needs to pay rent of 10,000 yuan, water and electricity bills of about 6,000 yuan, and employee wages of about 12,000 yuan every month as costs, it can still maintain profitability.
In the second half of 2020, Teng Yi opened two more tea shops. One is a franchise store of a local brand in Guangdong, with an initial investment of more than 600,000 yuan; the other is his own brand.
Mixue Bingcheng, the "overlord" of the low-end market, has become the first brand in China's local tea market to have more than 10,000 stores. In 2021, Mixue Bingcheng plans to expand to 20,000 stores by the end of the year. However, industry insiders revealed that the franchise fee is currently about 10,000 yuan, and franchisees who want to participate are "overwhelmed" and need to go through layers of interviews before they can obtain franchise qualifications.
"First-line high-end brands cannot join, and Mixue Bingcheng's franchises are screened at all levels. There is a gap in the middle; but there are so many entrepreneurs who need good projects. This is a structural contradiction." Chen Xuan believes.
Therefore, under the banner of "celebrity endorsement" and "sub-brand under a big brand", Kuaishou companies began to "harvest" franchisees in third- and fourth-tier cities.
However, the seemingly huge milk tea market is gradually becoming saturated. The business of milk tea franchise stores is becoming increasingly difficult.
Milk tea franchise stores, it is getting harder and harder to make money
Even for Nayuki’s tea, the leading new tea brand, its prospectus also revealed the current situation of the brand’s “difficulty in making money”. According to the prospectus, Naixue suffered a cumulative loss of more than 300 million yuan in three years from 2018 to 2020.
Some people in the industry said that "recruiting franchisees" is a very profitable business for milk tea brands.
Tea shop business is difficult to do. According to the "2020 New Tea Drinks White Paper", as of the end of November 2020, more than 130,000 tea beverage companies have ceased operations, accounting for 43% of the total number of companies in the tea beverage industry. Tianyancha data shows that nearly 60% of domestic tea beverage companies will not survive more than three years. The proportion of tea beverage companies that survive within one year is 24.4%, and the proportion of tea beverage companies that survive between 1 and 3 years accounts for 35.0%.
The best days of business for milk tea franchisees are over.
Teng Yi said that none of his three milk tea shops currently make money. The Gongcha store he first joined had a monthly turnover of 50,000 yuan, but after other costs and expenses, there was not much left. He told Caijingtianxia Weekly that a large part of the 50,000 yuan in revenue was generated by the food delivery platform. “The platform charges a commission of 20%, plus delivery fees, promotion fees, etc., even though in this food delivery platform, The turnover on the platform is about more than 80,000 yuan, but the actual purchase price is only more than 30,000 yuan. "
In addition, Teng Yi opened two other lemon tea brand stores. Teng Yi said that he needs to join the brand now. The brand owner is paid 1,500 yuan per month and 1 point of monthly turnover, and the rent is less than 10,000 yuan.
As for self-operated brands, Teng Yi said that it is difficult to expand in the market, and "the price of lemons has become quite ridiculously expensive." According to him, the local perfume lemon in Guangdong was still 3.5 yuan per catty in 2020, but in March 2021, it had risen to 40 yuan per catty. "Last winter, fruit trees were affected and the number was scarce. This year, the lemon tea industry market exploded. Various brands are focusing on lemon tea. Lemon tea has become the main battlefield of the milk tea industry, and the price has also gone up." Teng Yi said, "Every time I Although it can achieve a monthly turnover of 40,000 to 50,000 yuan, there is no profit. "
A Guangzhou Mixue Bingcheng franchisee who was previously interviewed by "Financial World" also bluntly said that he joined Mixue Bingcheng a few years ago. , a store with a well-selected location can basically pay back its investment in 1-2 months. But "the unit price of Mixue Bingcheng is too low, and now the rent and labor costs are high. It's not like the situation two years ago where you could make money by just lying down."
The seemingly "profitable" milk tea industry, for franchisees, high rent costs, management fees, and raw material prices have become the biggest problems. Chen Xuan also said that the decisive factors for the profitability of the milk tea industry are rent and location selection. "Site selection determines more than 80% of the survival rate. If the location selection is not good, there is a high probability that it will face losses."
Teng Yi was also a little worried. The store is not profitable, but he said that since he has already opened three stores, wanting to cross other industries is tantamount to starting from scratch.
But more often than not, franchisees fall into the "trap" of the quick recruitment company. Some franchisees told Caijingtianxia Weekly that since they chose to join the milk tea brand of Kuaishao Company, the brand did not provide any experience in operation and management after receiving the money, which was the main reason why they lost all their money later.
But the “franchise trend” of milk tea brands may continue. Chen Xuan said that in the future, milk tea stores will tend to be more sinking in the low-end market. "After all, compared with other catering retail entrepreneurial projects, the cost structure of milk tea stores is better than , and the cost investment is low." He also It is believed that the following development trends may emerge in the future: "The milk tea industry begins to harvest the sinking market, enter third- and fourth-tier cities, and expand the brand; the subcategories of milk tea will continue to increase, such as adding tofu, glutinous rice and other raw materials to launch new products; third, In the future, the country may implement stricter supervision in response to the current problems in the industry.”
(At the request of the interviewees, Teng Yi, Huang Ke, and Zhou Qi are pseudonyms)
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