Xing Fu Tang has recently been in some hot water with the headquarters in Taiwan. A lot of issues have been raised between the Malaysian franchise and CEO International which is the principal of the brand.
Xing Fu Tang Malaysia
On the 28th of October, Xing Fu Tang Malaysia took to their Facebook page to explain to us in detail about the situation.
Expensive Machines
Firstly, CEO International is threatening to terminate the agreement with Collab Working Lifestyle Sdn Bhd. This is because the Malaysian franchisee and sub-franchises are refusing to buy pearl-moulding machines worth RM4.5 million.
It all began when CEO International requested the franchises to purchase the machines to make strawberry heart-shaped boba. Each machine was going to cost about RM120,000 each.
Later on, an invoice of RM4.5 million was sent to the Malaysian brand despite the fact that there was no agreement of purchase. A total of 34 machines were listed in this invoice for each franchise and sub-franchise.
Without any discussion between HQ and Collab Working Lifestyle, CEO International asked for the payment. They even threatened to terminate the Malaysian franchises if the machines were not bought.
The strange part is that even if Xing Fu Tang Malaysia made the payment in full, the machines would only arrive between the end of 2020 and the start of 2021.
Moving on, Collab Working Lifestyle called for a meeting with all sub franchisees to discuss the matter. Everyone agreed to sign a letter informing CEO International that the machines would not be bought.
Upon the disagreement CEO International has been accusing Xing Fu Tang Malaysia of various things. All of which Collab Working Lifestyle has actively been denying these accusations that would harm the brand image.
Sudden Tests
Secondly, the headquarters in Taiwan invited Xing Fu Tang Malaysia for a trip. They were even announced as their best agent. In Taiwan the team was meant to go for training and sit for a test but no guidelines were given.
In fact, if anyone failed the test then they would no longer be allowed to operate their outlets. This is seen to be unfair because they have already made a huge investment in their shops. Renting a shoplot, purchasing the machines and equipment, and hiring staff is no light investment.
Because of this, nobody actually wanted to go for the training and test. Unfortunately, they were accused of preventing the sub franchisees from going to Taiwan.
Next, the pearl smart cookers that they were instructed to purchase have been breaking down within a few months. Instead of providing assistance in warranty claims, CEO International told them to buy new machines. This is quite a costly solution which can be avoided.
What Xing Fu Tang Malaysia Is Doing
There are also a few other smaller problems that have Xing Fu Tang Malaysia has been facing with CEO International. The whole post on Facebook highlights and explains all the situations in detail.
One thing we can say is that the Malaysian franchise is being as transparent as possible with the situation. Taking to Facebook and explaining everything as well as providing visual proof is a good step.
Because of this, many Malaysians have been showing their support for the bubble tea brand. Suggestions include that Collab Working Lifestyle take a page out of Loob Holdings book and create their own brand.
In the meantime the bubble tea brand will still continue operations as normal. The Facebook page is strongly showing that serving us is their priority at the moment.
