Vietnam’s famed Highlands Coffee chain sued for 5-month unpaid rents

30-Nov-2021 Intellasia | TuoitreNews | 5:02 AM Print This Post

The operator of a building in HCM City has taken legal action against Highlands Coffee, a popular cafe chain in Vietnam, for failing to pay nearly five months of rents, shortly after a similar controversy between the coffee shop brand and another building owner in Hanoi.

In its denunciation letter sent to the police bureau of Ward 25 in Binh Thanh District, HCM City, Hoa Binh House Corporation (HBH) accused Highlands Coffee Service JSC of illegally trespassing on Pax Sky building, which belongs to HBH, disrupting security and order, and hindering HBH’s business activities at the building.

Highlands Coffee has owed up to VND500 million (US$22,000) worth of rents from July to date for the space of its outlet inside Pax Sky building, which is located at 26 Ung Van Khiem Street in Ward 25, Binh Thanh District, according to a sales manager of HBH.

Before submitting the denunciation letter, HBH had discussed the issue with representatives of Highlands Coffee by documents and phone calls for several times.

While the coffee brand tried to negotiate for a 50-percent rent reduction from July 1 to 8 and a rent-free period between July 9 and 15 during the respective applications of prime minister’s Directives No. 15 and 16 in HCM City to curb the COVID-19 spread, HBH only agreed to a 20-percent cut for a three-month period.

Prime minister’s Directive No. 15 specifies that non-essential businesses and services will remain closed and all citizens must only go outside when necessary, while Directive No. 16 requires all residents to stay home and can only go outside to buy food, supplies, medicine, and other essential goods and services.

As the negotiation failed, HBH sent an official dispatch announcing the termination of the leasing contract between the two sides from November 12, after which HBH started cutting off electricity and water supplies and recovering the leased space.

However, Highlands Coffee then used a generator to continue the operation of its outlet at Pax Sky building, according to HBH’s denunciation letter.

“With a large number of strangers in the building, Highlands Coffee continuously threatened, obstructed and protested fiercely when Hoa Binh House’s staff attempted to recover the space that Highlands Coffee was using in the building,” HBH stated in the letter.

A representative of HBH said that the firm has yet to seal off the venue to avoid another attack similar to the previous incident that previously occurred at Artemis building in Thanh Xuan District, Hanoi, where another Highlands Coffee store is located.

HBH forced the closure of the Highlands Coffee store at the Artemis building after the coffee brand had also failed to pay rents for six months, which have amounted to around VND1 billion ($44,000).

After the shutdown, many people, believed to be Highlands Coffee employees, gathered in front of the lobby of the building to clash with its security guards.

A representative of Highlands Coffee refused to talk with Tuoi Tre (Youth) newspaper regarding the issue, just saying that the chain was working with its partner on the case.

According to Tuoi Tre correspondents’ observation, the Highlands Coffee store at Pax Sky building was still in operation on Saturday, using a generator for electricity supply.

Few customers used its in-store service, while more food delivery workers picked up online and take-out orders.

Meanwhile, the building’s security guards turned away both people intending to park their motorbikes at the venue’s parking lot to seat down at the cafe and the food delivery workers.

Originating as a packaged coffee business in Hanoi in 2000, Highlands Coffee currently operates 160 cafes under its brand across Vietnam, according to its website.

https://tuoitrenews.vn/news/business/20211127/vietnams-famed-highlands-coffee-chain-sued-for-5month-unpaid-rents/64408.html

 

Category: Business, Vietnam

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