Xing Fu Tang Malaysia and Taiwan are fighting online – and it’s allegedly over heart-shaped boba machines worth RM4.5 million

The Xing Fu Tang dispute has gotten ugly, with both sides publishing damning posts about one another.
Rachel Chia/Business Insider
  • Taiwanese bubble tea brand Xing Fu Tang is currently involved in a highly public spat with its Malaysian master franchisee, Collab Working Lifestyle.

  • The two companies have taken to Facebook to publish long posts accusing each other of bad behaviour.

  • The Taiwan brand said its “greedy” partner breached contract terms to squeeze out profits from outlet owners.

  • The Malysian firm said it was being defamed because it refused to pay RM4.5 million for special machines to make heart-shaped pearls.

  • Netizens said that the spectacle reminded them of last year’s dispute between Chatime and Tealive.

Thirty-four boba machines worth RM4.5 million are now at the centre of an ugly public spat between Taiwanese bubble tea chain Xing Fu Tang and its Malaysian master franchisee Collab Working Lifestyle, with their working relationship teetering on the brink of collapse.

Both companies took to Facebook to air their grievances in lengthy and strongly-worded posts within a  week of each other.

The first post, published by Xing Fu Tang Taiwan last Monday (Oct 21), accused Collab Working Lifestyle of breaching contractual terms to earn itself extra profits.

It threatened to terminate its master franchisee contract, adding that it was “heartbroken” to have its reputation “smeared” by a “greedy” partner.

幸福堂是引領世界潮流的品牌,因目前有許多馬來西亞加盟商向台灣總部投訴馬來西亞代理只有提供加盟商幾張照片、幾張紙做參考,讓加盟商自行處理店面的裝潢設計卻「未給完整的資料協助加盟商裝修」之外還將原物料以昂貴的價格販售給加盟商,導致加盟商在營運上…

Posted by 幸福堂Xing Fu Tang 西門町全球旗艦店 台灣第一品牌古法手炒Brown Sugar Bubble Tea創始品牌 on Monday, 21 October 2019

According to Xing Fu Tang, its Taiwan HQ had received numerous complaints about the master franchisee from outlet owners in Malaysia.

Among them were accusations that Collab Working Lifestyle did not help sub-franchisees set up their outlets, but only provided a couple of photos and print-outs.

In addition, it shipped them bubble tea ingredients at unreasonable prices, and even publicly said it did this “because it could”.

Collab Working Lifestyle also lied to sub-franchisees that it would only allocate one bubble tea outlet per zone, and charged them monthly marketing and brand maintenance fees, instead of once a year per the contract, the post added.

Xing Fu Tang said the fees Collab Working Lifestyle demanded far exceeded the sum it paid for master franchisee rights to the entire country.

Last, the Taiwanese brand called out the Malaysian firm for hatching plans to set up its own bubble tea brand with Xing Fu Tang’s Indian franchisee, adding that both these franchisees had failed to meet contractual obligations.

“We are deeply concerned about the livelihood of our Malaysian sub-franchisees once the new brand is established,” the post added.

In the week Xing Fu Tang Taiwan’s post was published, two outlets in Klang Valley were vandalised with red paint five times.

“We have lodged police reports and submitted the CCTV footage to authorities. We don’t know who did it, but we refuse to bow to thugs,” Xing Fu Tang Malaysia said.

❌ Defamation ❌Compromising We will not bow to thugs ‼️From Oct 17 to 26, two Xing Fu Tang stores in Klang Valley…

Posted by Xing Fu Tang Malaysia 馬來西亞幸福堂 on Monday, 28 October 2019

“Our conscience is clear”: Malaysia master franchisee

Days after the incident, Collab Working Lifestyle responded with its own Facebook post on Sunday (Oct 27) on the Xing Fu Tang Malaysia page.

It accused the Taiwanese chain of defaming it as retaliation for refusing to buy expensive boba machines.

According to the post, Xing Fu Tang’s principal company, CEO International, had on Oct 15 asked its Malaysia business to order 34 special machines to make strawberry heart-shaped boba.

The machines, due to be delivered between end 2020 and 2021, cost RM4.5 million in total, with payment due on Oct 16, it said.

⚠️【𝐗𝐢𝐧𝐠 𝐅𝐮 𝐓𝐚𝐧𝐠 𝐓𝐚𝐢𝐰𝐚𝐧 𝐡𝐞𝐚𝐝𝐪𝐮𝐚𝐫𝐭𝐞𝐫𝐬 𝐦𝐚𝐤𝐢𝐧𝐠 𝐮𝐧𝐟𝐨𝐮𝐧𝐝𝐞𝐝 𝐚𝐥𝐥𝐞𝐠𝐚𝐭𝐢𝐨𝐧𝐬 𝐚𝐠𝐚𝐢𝐧𝐬𝐭 𝐌𝐚𝐥𝐚𝐲𝐬𝐢𝐚 𝐦𝐚𝐬𝐭𝐞𝐫 𝐟𝐫𝐚𝐧𝐜𝐡𝐢𝐬𝐞𝐞 𝐟𝐨𝐫 𝐫𝐞𝐟𝐮𝐬𝐢𝐧𝐠 𝐭𝐨 𝐛𝐮𝐲 …

Posted by Xing Fu Tang Malaysia 馬來西亞幸福堂 on Sunday, 27 October 2019

Describing the price tag as “sky high”, Collab Working Lifestyle said it called for a meeting of all Malaysian sub-franchisees, and the group collectively decided not to buy them.

In its post, Collab Working Lifestyle added it had previously bought induction cookers for RM40,000 each, and egg cake machines for RM150,000 each.

It claimed CEO International sold it “drastically inflated” equipment, such as track lights and machines that frequently broke down.

Collab Working Lifestyle also called Xing Fu Tang Taiwan’s various accusations “unfounded” and “wild”, but acknowledged it did have plans to start its own bubble tea brand.

It did this for “business survival”, as its ten-year master franchisee agreement was now under threat, it said.

“Our conscience is clear. We have not breached the master franchise agreement,” the post read. “As Malaysian SMEs, we have invested a lot of resources into the Xing Fu Tang brand, and we will not be bullied.”

Addressing fans, it added: “Xing Fu Tang Malaysia will continue to operate as usual. We will continue to serve you your favourite drinks.”

Online, many netizens commented on the similarity of this saga to last year’s high-profile franchise dispute between Chatime and Tealive, with many professing feelings of deja vu.

Others said the outlets’ poor financial performance meant the “bubble tea bubble” was reaching its breaking point.

“The craze has ended, pal. The boba has burst,” commented a Facebook user named Alfred Ng. “People won’t pay for diabetes over and over again.”

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