Xing Fu Tang Malaysia: We will not be bullied

Remember last week’s drama surrounding stir fried brown sugar bubble milk brand Xing Fu Tang (XFT)? This week, we’ve got quite the update for you. In a revealing Facebook post on Xing Fu Tang Malaysia’s page, the Malaysian master franchisee has finally shared their side of the story–and it’s a doozy.

According to XFT Malaysia, it all started on the 15th of October 2019 when CEO International (principal of the Xing Fu Tang brand) sent a notice requesting the local master franchisee (Collab Working Lifestyle) and all their 34 sub franchisees to purchase a special pearl-moulding machine. This machine, according to XFT Malaysia, is to make strawberry heart-shaped boba, and was priced at NTD850,000 (~RM120,000) each.

This notice, was then followed by an invoice of NTD28.9 million (~RM4.5 million) 34 machines, one for each franchisee, even though none of local outlets agreed to purchase it. To make matters worse, XFT Malaysia says that the machines would only be delivered to them sometime between the end of 2020 and 2021–over a year away.

On top of that, XFT Malaysia alleges that CEO International also requested for the payment to be made in full the next business day.

Following this, XFT Malaysia had a meeting with all their sub franchisees on the 19th of October, and together they collectively signed a letter to inform CEO International that they would not be buying the machines. After this debacle, XFT Malaysia says that CEO International proceeded to make “wild accusations” against them on Xing Fu Tang Taiwan’s Facebook page.

While this appears to be the main issue, XFT Malaysia also says that they’ve been dealing with a whole bunch of other grievances since they started, including unreliable “pearl smart cookers”, a lack of direction regarding the interior design of Xing Fu Tang stores, as well as the purchase of “egg cake machines” that have not been used since.

XFT Malaysia also continues with a rebuttal of the issues XFT Taiwan raised in their Facebook post (the English version of which has apparently been removed). This includes Collab Working Lifestyle charging more for raw materials and transportation fees, as well as the setting up of “illegal” stores and opening more than one store in the same area.

At the end of the day, XFT Malaysia claims that their conscience is clear. They maintain that they have not breached the master franchise agreement, and that both master and sub franchisees have invested “tens of millions” into the development of the Xing Fu Tang brand in Malaysia. Because of this, and the fact that they’ve signed a 10-year master franchise agreement for the exclusive rights to the brand in Malaysia, XFT Malaysia was unhappy to find that XFT Taiwan announced that they were seeking new partners in Malaysia.

“As Malaysian SMEs, we have invested a lot of resources into the Xing Fu Tang brand, and we will not be bullied,” said Collab Working Lifestyle executive director Derek Cheong in a statement to SoyaCincau. He also added that Xing Fu Tang Malaysia will continue to operate as usual and that they will continue to serve their customers their favourite drinks.

It’s interesting to see how different the stories from both parties seem to be. While it’s often hard to tell whose side is closer to the truth, I have to say that Xing Fu Tang Malaysia has presented a rather compelling account of the situation with the specificity of their Facebook post as well as the included appendices. If you want to see the full story, you can check out their Facebook post.

What do you think of this? Let me know in the comments below.

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