Arshad Khan, Pakistan’s famous Chaiwala, is currently facing significant financial challenges with his London-based café, which opened its doors just a year ago amid much fanfare.
The café’s UK franchise owners have failed to uphold their agreement to pay royalties to Arshad Khan, leaving him in a precarious financial situation.
Despite his efforts to negotiate with them, they have refused to pay, citing business losses and inability to pay rent for the café’s location.
The café, located in East London on 229 Ilford Lane, was launched by two cousins, Nadir Khan Durrani and Yaver Akbar Durrani.
They registered their company, Cafe Chaiiwala Ltd, in early 2021, and the café is still operational. However, from the beginning, the café has faced operational challenges.
The ground floor has never been opened to the public due to reported poor quality of service, which has likely impacted its customer base and revenue.
Initially, the café enjoyed a surge in popularity, attracting customers from all over the UK eager to sample its Chai. The initial excitement soon waned due to issues related to poor quality, mismanagement, and hygiene standards at the café. These factors contributed to a decline in customer satisfaction and retention, ultimately affecting the café’s profitability.
The Durrani cousins have also run into legal disputes with the building owner over unpaid rent spanning more than six months. They have requested a rent reduction, citing business losses and claiming that the rent is too high.
Yaver Akbar Durrani, one of the owners, initially promised to pay the pending royalties to Arshad Khan but later reneged on this commitment, stating that he would only pay once the café becomes profitable. Moreover, he has accused Arshad Khan of not delivering the full recipes as originally promised.
The deteriorating relationship between Arshad Khan and the Durrani brothers has escalated to the point where both parties are now considering legal action against each other.
The strained relations have also affected other planned ventures, such as Arshad Khan’s proposed visit to London to meet fans and serve his signature Chai, which had to be canceled due to the financial disagreements.
Arshad Khan’s rise to fame began in 2016 when a candid photo of him serving Chai went viral on social media. His striking looks, particularly his blue eyes, captivated the public’s attention, earning him the nickname “Chaiwala.”
This sudden fame led to numerous opportunities, including magazine covers, television appearances, and the establishment of the café brand bearing his name.
The financial troubles faced by Arshad Khan’s London café highlight the challenges associated with franchising and maintaining brand integrity across international borders.
The dispute between Arshad Khan and the Durrani brothers underscores the importance of clear contractual agreements, effective communication, and mutual trust in business partnerships.
