Luckin Coffee warns of fraudsters using its brand name to dupe investors and franchisees
Luckin Coffee has released an official statement regarding the recent cases of social media accounts using the company’s brand name without permission to attract investors and franchisees.
“It has come to our notice that there has been a number of accounts on Weibo, WeChat, and other social media platforms registered under the name “瑞幸咖啡加盟” (translation: Luckin Coffee franchise) feigning to be a distributor of Luckin Coffee franchise in order to attract franchisees and investors, among other illegal activities,” the company said in the press release.
The company said both “Luckin Coffee” and “瑞幸咖啡” are registered trademarks and that it has pursued legal action against those who used the names illegally. The company stressed that it operates 100% under the direct sales model and has not accepted franchising of any form. The coffee startup assured that it will continue to do what it can to thwart such illegal behaviors.
Luckin Coffee started piloting its operations in January and has grown to become the second largest coffee chain in China. According to the company, it now has over 1400 stores across 21 cities in China including Beijing, Shanghai, Guangzhou, Xi’an, and Qingdao. The company previously said it plans to open 2,000 shops by the end of the year.
The coffee shop market in China was worth over $4.5 billion last year, and it is still growing at an astonishing pace. Luckin managed to reach unicorn status in less than a year after raising $200 million in Series A funding round in July.
Its strong performance threatens leading players in the coffee business including Starbucks. In July, Starbucks announced a partnership with Alibaba-owned food delivery platform Ele.me so as not to be left out of the emerging trend of on-demand delivery.
In September, the company announced that it will collaborate with Tencent on marketing, leveraging WeChat’s payment service and mini program marketing tools.