Coffeeebanada Accelerates '24-Hour Unmanned Store' Business... Launch Scheduled This Month

[Vitamin Junggi] Interview with Im Eunseong, CEO of Coffeeebanada
Franchise Fee and Royalty-Free Policy... Surpasses 900 Franchise Stores
Successful Development of Smart Vending Machine... Promoting Unmanned Automation

[Asia Economy Reporter Kim Bo-kyung] Celebrating its 10th anniversary, the domestic franchise coffee specialty store 'Coffee Evanhada (Keoban)' is reinventing itself by expanding its 24-hour unmanned stores. Lim Eun-seong, CEO of Keoban (pictured), said in an interview with Asia Economy on the 8th, "The competition for low-priced coffee is intensifying, and profits have decreased compared to before due to COVID-19," adding, "We believe that 'automation' is the way to reduce costs while increasing sales, so we are focusing on technology development and research."

CEO Lim started the business in 2011 with a 5-pyeong (approximately 16.5 square meters) cafe in a shopping district in Paju, Gyeonggi Province. Selling cheap and delicious coffee quickly gained word of mouth. By June last year, the number of franchise stores surpassed 900. The rapid increase in the number of stores can be largely attributed to the '4 No (無) Policy.' All burdensome factors for startup franchisees, such as franchise fees, royalties, deposits, and renewal costs, were eliminated. "Seeing other franchise headquarters around us hitting limits shortly after starting their businesses, I thought we needed to go against the existing policies."

In the summer of 2018, a crisis hit. The number of franchise stores opening monthly dropped sharply from 10-20 to just 3, and inquiries about startups noticeably decreased. This was due to fierce competition in low-priced coffee. Although a restructuring was carried out to reduce the number of employees, it was not a fundamental solution. After much deliberation, CEO Lim launched a bold promotion offering 'free interior construction.' For two years, the headquarters provided free interior work for small stores ranging from 33 to 66 square meters. With startup costs halved, the response was explosive. About 180 stores opened annually, and growth recovered. CEO Lim said, "Even if profits are not seen at the time of opening, I believed that in the long term, supplying ingredients would increase sales."

CEO Lim's management keywords are 'trust' and 'people.' Driving 90,000 km annually, he personally traveled nationwide for startup consultations and ensured decision-making was not delayed through a remote approval system. From the CEO to employees, they maintain a horizontal culture by calling each other by nicknames. Another characteristic is active communication between headquarters and franchise stores. Six regional representative franchisees are selected to hold monthly meetings with headquarters. These representatives convey the opinions and suggestions of franchisees in their regions.

CEO Lim plans to accelerate the unmanned store business in response to the contactless era. The idea was inspired during his 2017 training in Japan by the various vending machines placed on streets. He said, "I sensed that the aging population and labor cost issues Japan was experiencing would soon hit South Korea as well." He even bought a single bean coffee vending machine placed in a subway station, took it apart, and analyzed "why it tasted bad."

Preparing early for the unmanned era, they succeeded in developing a smart vending machine that delivers high-quality, consistent coffee at an affordable price. Equipped with an expensive German espresso machine to maintain quality, the beverage menu includes about 100 items. A showroom will open at the end of this month in Samseong-dong, Seoul, to showcase it to the public. CEO Lim said, "We are striving to create stable profits by minimizing labor costs with smart multi-devices," adding, "This will provide high profits to franchisees and convenience to customers."

CEO Lim's long-term goal is the 'daily life of coffee.' Just as ordering chicken delivery comes with a cola, he envisions a world where ordering meal delivery comes with coffee. This too requires unmanned automated coffee production. To realize this goal, CEO Lim is currently in talks with a delivery agency.