Restaurant Says Starbucks' Exclusive Sales Clause Is Causing It To Lose Business
Posted January 31, 2018 5:13 p.m. EST
SACRAMENTO COUNTY, Calif. — A David vs. Goliath showdown is unfolding in Sacramento County. A local mom and pop shop says it's losing business after a nearby Starbucks banned it from serving certain items to go.
The business, on Calvine Road just outside Elk Grove, serves Asian fusion and specialty tea drinks, but Starbucks won't allow that tea to leave the building. Some are calling it a case of a big business bully, sucking up sales and inconveniencing customers.
It's a brewing battle between big and small.
"We cant serve the tea in a to-go cup," said Andy Ha.
Ha is the owner of Nubo and mOO mOO, an Asian food and specialty Boba tea shop, that in the 10 months of opening, has become a hit with customers. But it's also become an apparent threat to a nearby Starbucks which is now limiting what customers can carry out. Typically, Boba drinks are served in plastic cups that can be taken home, but if the drink has tea in it, it can not leave the premises.
One customer said, "It was inconvenient at first. I was like now I got to sit here and drink my the tea."
At one time, tea could be taken to go, but when the coffee giant located a few doors down found out, it had an ax to grind. Ha says he was told he was violating an exclusive sale clause that Starbucks had signed with the landlord. Ha always knew there were some restrictions but didn't think Boba tea was an issue since Starbucks doesn't even sell it.
"We're a mom and pop shop. We're trying to do our best and go to work every day," said Ha.
One customer says she thinks the restrictions are ridiculous, and says Starbucks should take it easy on small businesses.
"I'm like, you guys are already like a billion-dollar corporation why do you care about that," he said.
It's a bitter inconvenience as big business affects his bottom line, but Ha says to go or dine in, the cup is always half full.
Starbucks did respond to this issue saying it has been in business at its location for 15 years. It also said, "As with all of our locations, we continually work with our landlords to determine what makes the most sense for our stores (as is the case here). "
A commercial real estate developer in the area told KOVR-TV that exclusive sales are extremely common among many different types of businesses but did say in his experience, Starbucks is the most notorious for writing them into its leases.