(Yicai) April 8 -- Cotti Coffee, a fast-growing Chinese coffee chain founded by Charles Lu, former chairman of Luckin Coffee, is operating normally, staff said after a court in Beijing ordered him to repay debt of CNY1.9 billion (USD260 million).

Lu's financial issues are unrelated to Cotti Coffee, employees of the Beijing-based company said to Yicai yesterday.

The serial entrepreneur owes a total of nearly CNY2.6 billion and has multiple court orders against him restricting his consumption and freezing his equity, according to corporate information platform Tianyancha.

After an accounting scandal in 2020, Luckin Coffee's founding team, including Lu and Jenny Zhiya, former chief executive, established Cotti Coffee in 2022 with USD100 million in registered capital. Luckin Coffee, which was listed on the Nasdaq, restructured after filing for bankruptcy in the United States. Both Lu and Zhiya left the troubled business in 2020. 

Cotti Coffee is borrowing from Luckin Coffee's playbook to expand rapidly. Its stores, mostly located near office buildings, offer discounts and coupons so that drinks cost as little as CNY9.9 (USD1.40) per cup. The chain attracts new franchisees with zero franchise fees and zero brand usage fees. 

Cotti Coffee has slowed its new store openings this year, adding only 400, after opening 6,500 last year, including more than 1,500 in a single month, according to data provider Zhaimencanyan.

Editor: Emmi Laine