Korean coffee chain Caffe Bene has collapsed, filing for a court-led restructuring scheme on Friday. Caffe Bene applied for court protection from bankruptcy early this year having struggled in both its home market and abroad and is closing domestic stores. Seven-year-old chain Cafe Droptop, which has 240 stores, has cut its employee count by about one fifth. Local chains have been cutting store networks and staff numbers to remain competitive. The country’s 1000+ Starbucks stores are not included in the data because they are company owned. South Korea coffee franchises are being hit by convenience stores developing takeaway coffee services at prices as low as 1000 won (US90 cents) in the case of 7-Eleven, or about a quarter of the price of a Starbucks coffee. Of those, 11,198 were coffee and beverage stores, representing the third largest sector of the South Korean franchise market behind convenience stores and fried chicken restaurants. “While restaurants and even convenience stores are adding coffee on the menu to sell, the coffee war is intensifying as now even offices own espresso machines,” he said.Ĭiting local corporate tracker CEO Score, the paper reported that the number of franchisees in Korea hit 87,540 as of the end of last year, based on a list of 118 franchise brands registered with the Korea Franchise Association. Lee Kyung-hee of the Korea Business Strategy Institute described the situation as “a coffee war”. According to a report, one in 10 South Korea coffee shops closed their doors last year – the equivalent of more than 1000 stores. South Korea’s once burgeoning franchised coffee shop market has reached saturation point – and the fallout has become extreme.

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The company also appears to have exited the Canadian market. Three outlets remain trading there, but it is not clear if they are franchised or company-owned. In Vietnam several stores have opened and closed, including its downtown flagship which drew huge queues when it opened in 2014. The Cambodian store has already closed and the last Facebook post by the Singapore cafe is dated February last year. It has opened in Vietnam, the US, China, Canada, Brunei, Singapore, Japan, Indonesia, the Philippines, Saudi Arabia, Malaysia, Cambodia and Mongolia.īut the international foray has met with mixed success. While its US website claims it has opened 1600 stores worldwide, the exact number still trading is difficult to ascertain. Launched in 2008, Caffe Bene expanded to become one of South Korea’s largest coffee franchises, opening more than 1000 stores in five years, but lost ground in the saturated coffee market.

Caffe bene