Why some coffee shop owners are miffed at BTS’s V being the face of their brand

Compose Coffee announced Dec. 20 that it had selected V as its model for next year. Some franchisees aren’t too happy as they must shoulder part of the advertising fees worth billions of won.

BTS member V poses in a Compose Coffee poster ad. [COMPOSE COFFEE]

Some affordable coffee shop franchisees aren’t too happy with superstars V of BTS and Son Heung-min gracing their brand posters, as they must shoulder part of the advertising fees worth billions of won.

Compose Coffee, the second largest affordable coffee chain in Korea by sales, announced on Dec. 20 that it had selected V as its model for next year in anticipation of the brand’s 10th anniversary. Its headquarters also notified franchisees on the same day that they must split costs to pay two billion won ($1.54 million), one-third of the total advertising fees worth six billion won. There are approximately 2,300 Compose Coffee franchisees nationwide, which means each store must pay 72,000 won monthly, for a total of 860,000 won more than a year.

Advertisement stickers to be pasted on store windows also need to be bought separately and cost between 200,000 won and 300,000 won each.

The company explained that 78 percent of the franchisees agreed to use V as the brand’s model. According to the Fair Transactions in Franchise Business Act, the franchiser can proceed with advertisements for all stores if more than 50 percent of franchisees agree in advance. With promotional offers, more than 75 percent must agree.

However, some of the franchisees who have not agreed to the deal think the franchise headquarters, which earns tens of billions of won in operating profits annually, should not be making the franchisees shoulder the costs.

It is not the first time that affordable coffee chain franchisers have been accused of unfairly charging their franchisees for their expensive marketing. Leading affordable coffee chain Mega MGC Coffee came under fire in December last year after asking its franchisees to pay half of six billion won, the fees for using football player Son Heung-min for advertising.

Each store had to pay 120,000 won monthly for a total of 1.44 million won more than a year. Individual poster stickers cost 300,000 won each.

BY KIM JU-YEON [kim.juyeon2@joongang.co.kr]