Just a year after making national headlines for successfully attracting US$5.5 million in foreign investment, Hanoi-based fusion food chain The KAfe has ended its operations in both the capital and Saigon.
Over the last few months, many Saigoneers have noticed the gradual closure of several of the franchise's stores at prime locations around the city such as Le Loi, Huynh Thuc Khang and Ly Tu Trong Streets. In Hanoi, two of the chain’s original, and biggest, stores on Dien Bien Phu and Ha Hoi Streets have also been shuttered.
At the moment there is much speculation about why the famous startup tanked, but the prevailing opinion is that The KAfe expanded too quickly. The sudden resignation of original founder Dao Chi Anh didn’t help maintain its brand image either.
CafeF reasoned that Anh’s departure was because she couldn’t satisfy Hong Kong stakeholders’ expansion goals. At times, in order to obtain investment, entrepreneurs tend to agree to business development promises that exceed their ability. Moreover, if foreign investors hold the majority of the business’ shares, founders risk being ousted should things go sour.
Ex-CEO Anh shared in a previous interview with the news source that she regretted making rash decisions in the early days of running the chain.
“If I could turn back time, I would be more assertive during the negotiation process with investors and more strong-willed in deciding whether or not to accept the requirements they suggested,” she told the online news outlet.
Some have also attributed the brand’s downfall to Dao Chi Anh herself. Throughout its one year in business, her success story became so intertwined with The KAfe that once she was out of the picture, the franchise couldn’t stand on its own.
Last but not least, the final nail in the coffin for the food chain was the lack of a promotional campaign after Anh’s departure to keep customers interested. The radio silence quickly made the chain forgettable in two already cutthroat markets – Saigon and Hanoi – when it comes to food and beverage services.
[Photo via The KAfe Group]
