Poaching Baristas, Snatching Franchisees... Lu Zhengyao Accused of Undermining Luckin Coffee

Time Finance recently reported that the "close-quarters battle" between Cotti Coffee, founded by Lu Zhengyao, and Luckin Coffee is intensifying, and has now extended to competition for personnel.

According to the report, some potential merchants who originally intended to franchise with Luckin have accepted Lu Zhengyao's olive branch, drawn by the reputation of the "former Luckin founder" and favorable franchising policies, and have instead joined Cotti Coffee's camp.

At Cotti, references to the "former Luckin founder" are everywhere. The designation appears not only in the franchise recruitment proposal on the official website but also on promotional banners in stores, and can even be heard through megaphones during local promotions. Within Cotti, everyone — founders, executives, franchisees, store managers and baristas — has a connection to Luckin. After leaving Luckin, Lu Zhengyao first brought along his "disciple" Qian Zhiya, who became Cotti's CEO, then poached several Luckin executives, including the team that built Luckin's store monitoring system, to design a new system for Cotti.

Time Finance noted that in some coffee franchising groups Cotti has become the most discussed brand, even coming up among Luckin franchisees. Some experienced potential franchisees who had planned to join Luckin were put off by Luckin's overly strict franchising requirements. Cotti claims not to charge franchise fees, operating instead on a joint-management model that collects service fees from store operating profits, with a return on investment in as little as a month — branded the "Coffee Dreamer" program. Compared with Luckin, Cotti appears to have a lower entry barrier, prompting some to switch to the new camp.

In addition, Daily People Media published an article on March 16 reporting that a franchisee who had previously opened 7 Luckin branches also left Luckin at the end of last year and converted the stores to Cotti. They initially converted 3 stores, kept seeking new locations and have since opened more. They also renamed their official social media accounts, including the "Linyi Luckin" Weibo, Xiaohongshu and Douyin accounts with 121,000 followers, to "Linyi Cotti," running them as Cotti's official accounts.

Targeting Lower-Tier Cities

The same article interviewed a Cotti Coffee investment manager from a third-tier city, who revealed that Cotti's initial target market was small third- and fourth-tier cities — which overlaps with Luckin's current "sinking" strategy into county-level areas. In the commercial districts of the same small city, then, Luckin and Cotti are inevitably headed for confrontation.

Not far from every newly opened Cotti store there is already a Luckin location, with distances of up to roughly 100 meters, and some even right next door. The investment manager said, "Cotti is specifically targeting Luckin's customer flow. By choosing nearby locations, surrounding them strategically and far outnumbering them in quantity, the goal is to fight right alongside the competitor."

According to Time Finance, besides franchisees, baristas are another group Cotti seeks to recruit. Some baristas who previously worked at Luckin have been "poached" by Cotti, citing limited advancement opportunities at Luckin, in order to obtain better pay and positions. Cotti promised one barista a direct promotion to store manager, and told her she could refer former Luckin colleagues, saying "anyone who joins will start as an assistant store manager." At a Cotti Coffee store in Luozhuang District, Linyi, for instance, the new store manager was poached directly from the nearby Luckin store by the franchisee.

Motivation and Objectives

A Cotti expansion manager told Tech Planet in an interview that the main motivation for joining Cotti was "to prove ourselves." Meanwhile, a major Cotti franchisee repeatedly mentioned that his and his team's common goal is to "take down Luckin." Lu Zhengyao's desire for revenge is unmistakable this time.

As netizens have put it, Cotti's strategy is to capitalize on Luckin's popularity while grabbing Luckin's territory and business — and now it is poaching Luckin's people too.

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