In a bold move to mark its 10th launch anniversary, Compose Coffee, a prominent South Korean coffee brand, announced a groundbreaking collaboration with BTS's V. The celebrated partnership, however, is not without its fair share of controversy, as franchise owners grapple with the hefty endorsement fees levied upon them.
With an endorsement fee totaling ₩6.00 billion KRW (about $4.62 million USD), franchise owners are tasked with shouldering ₩2.00 billion KRW (about $1.54 million USD) collectively. This translates to a monthly payment of ₩72,000 KRW (about $55.40 USD) for the next 12 months, causing some owners to express concern over the financial burden.
One franchise owner lamented, "It's a lot. In total, I'd have to put in about ₩1.00 million KRW (about $770 USD), and I don't have that. I'd have to double sales to be able to afford sending in those fees. I don't understand the headquarters pushing their advertisement fees onto the franchise owners."
Despite these reservations, reports suggest that some Compose Coffee franchise owners are already reaping the benefits of V's endorsement. New customers, identified as ARMYs, are flocking to local Compose Coffee outlets, leading to increased sales and expressions of gratitude from franchise owners.
One franchise owner shared the positive impact, saying, "Free whipped cream on the house, in celebration of V becoming our model! Hope you enjoy and order again soon. Thank you!"
Online posts are abuzz with ARMYs ordering coffee to support their favorite BTS member, and franchise owners are seizing the opportunity to connect with this new demographic.
“I don’t doubt for a second that the franchise owners will be able to scoop back all of the 12-months worth of fees on the first day that the ads drop.”
“₩72,000 KRW (about $55.40 USD) per month to have BTS’s V advertise my franchise? I’d be so down.”
“I mean, while V is endorsing the brand, I’ll be drinking Compose Coffee as often as possible. So…”
“Give it half a day, and V will make up for the year’s worth of endorsement fees being pushed on them.”
“I saw the new strawberry menu dedicated to V. I can’t wait to try it.”
he enthusiastic response has sparked optimism among some franchise owners, who believe that V's influence will not only justify the endorsement fees but also result in a surge in profits.
While concerns persist over the financial strain on franchise owners, the prevailing sentiment is one of anticipation for the marketing boost that V's association with Compose Coffee promises. The brand confirmed that the endorsement decision was made after surveying franchise owners, with a resounding 75% expressing their approval of bringing BTS's V on board.
As the countdown begins for the launch of the highly anticipated advertisements featuring V, Compose Coffee finds itself at the intersection of financial scrutiny and newfound success, with both franchise owners and fans eagerly awaiting the impact of this groundbreaking collaboration.