Starbucks Landlords Sue Over 'Buddy Pass' Discounts, Claim Lost Rental Fees
Creatrip Team
3 months ago
A trial began in Seoul as 37 landlords who lease buildings to Starbucks operator SCK Company sued for unpaid rental fees. Landlords argue that discounts from Starbucks' prepaid subscription 'Buddy Pass' (a paid subscription service offering daily 30% drink and food discounts, free delivery and shipping coupons) and partner card promotions reduce the sales base used to calculate rent, and thus the company underreported total sales. They claim rent should be calculated on the pre-discount (gross) amount because subscription fees and partner commissions effectively form part of sales. Starbucks counters that the dispute is about how to define net sales and that subscription fees pay for corporate promotions and related costs. The court framed the main issue as contract interpretation — whether such discounts and coupons are deductible from gross sales — and explored the possibility of settlement, which Starbucks is open to but landlords currently resist due to precedent concerns. Landlords also requested the court to compel Starbucks to disclose detailed sales data and sought permission to present a short PPT demonstrating in-store payment processes at the next hearing scheduled for March 5. The outcome will hinge on contract wording and whether subscription and partner payments are considered part of total store revenue or promotional costs to be kept by the operator.
