"At present, we have more than 300 stores, and it is expected to grow to 1,000 by the end of the year. In March and April, the growth rate of more than 100 stores per month was maintained on average." Li Wenyang, head of the brand growth center of the chain catering brand Xiong, told Lieyun.com.
Faced with the recurrence of the epidemic, some catering companies did not choose to treat it negatively, but instead showed an expansion trend. In addition to Mr. Xiong, Yu Niu also said, "From January to April this year, the number of contracted investment promotions nationwide increased by 18.1% year-on-year, of which the North China region increased by 43% year-on-year."
Although the epidemic has cast a layer of shadow on the catering industry, after entering the reshuffle period, it has also accelerated the chainization of the catering industry. The previous direct store sales model of large stores has suffered even greater losses due to the impact of the epidemic. Haidilao, which wanted to buy at the bottom during the epidemic, lost billions due to underestimating the recent recovery period of the epidemic. Such a result of damaging muscles and bones has been given an answer. The store has weak risk resistance and is difficult to survive the epidemic. In contrast, the advantages of light operation of the franchise model and sharing risks with the headquarters are highlighted.
Qing Yong, founder of Tomato Capital, also said that during the entire epidemic, the difference between direct sales and franchise resistance is huge. To this day, it is very difficult for most of the direct chains in China to be in China. Although brands that have joined the franchise chain have been greatly affected by the epidemic, they still maintain good net profits, and some may even achieve very good growth. So in fact, after being impacted by the epidemic, Tomato Capital found that the flexibility of its business model was extremely different.
consulting company PricewaterhouseCoopers has said that the epidemic has accelerated the chainization of catering companies. According to data, the "chain rate growth rate" of the catering industry has increased by as much as 240% from 2019 to 2021.
While the industry is unpredictable, after three years of hardening of the epidemic, these franchise chain catering brands have also actively adjusted their strategic direction and explored a path of expansion.
formulates a new franchise policy to compress the investment return cycle
"In the past, franchisees' investment budgets would be higher, and it is expected that the investment return cycle will be between 1 and a half years to 2 years. Now the investment return cycle of most franchisees has been compressed to 10 months." Li Wenyang told Lieyun.com that in the past year, franchisees' franchise decision-making links are longer and the budget control is lower. Among them, the most core focus is the profitability of the project.
Faced with the increasingly cautious franchisees, Mr. Xiong, a chain catering brand that mainly sells handmade dumplings and wontons, gave franchisees a "peace of mind".
Li Wenyang told Lieyun.com that within three months after the new store opened, Mr. Xiong will ensure that the daily order volume is more than 60 orders.
To achieve this goal, Mr. Xiong will now prepare orders for franchisees in the early stages when the new franchise store is opened, and lay a solid foundation for their future daily operations. In addition, Mr. Xiong’s headquarters has a special store explosive group, from site selection to subsequent promotion and distribution, helping franchisees to build customer penetration and repurchase around the store in the early stage and build a good traffic foundation.
"At present, our average store performance across the country is around 100,000. Pragmatically speaking, there will be any increase or decline in performance after the store is opened. First of all, we do not recommend the performance curve of high opening and low closing." Li Wenyang said that the decline in store performance is due to the epidemic or the problem of franchisees' lack of focus on business ideas. In this regard, Mr. Xiong has established a special multi-channel performance responsibility group to help franchise stores improve performance in multiple dimensions from stores, takeaway, group purchase reviews, private domains, third-party group purchases and other channels.
’s early order quantity guarantee, coupled with subsequent multi-channel assistance, Mr. Xiong greatly compressed the investment return cycle of franchisees. This also means lowering the entry threshold for franchisees. According to official data from Mr. Xiong, 22 new stores were added in one week in May alone.
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Fish You use the combination of "rice + pickled fish" to achieve fast food, and adopt the business model of "small stores, large chains, and full supply chain". With the annual increase of more than 300 stores, more than 1,400 stores have been opened.During the epidemic, the rapid expansion of the store opening pace was still maintained.
First of all, Yuyou reduced the franchise fee from 129,800 to 60,000 yuan. Secondly, the single-store model is continuously optimized to reduce the overall investment of franchisees in the early stage. At the same time, Yuyi proposed the "fighting-free" policy together. For example, a series of policies such as completing the location selection within two months after joining the franchise and refunding the location selection fee.
For store marketing, Yuyou will do it through two aspects: early opening + daily operation promotion. "During the opening of the store, we did a lot of down-to-earth opening activities and marketing, and then during the opening, the store will explode the area and accumulate customers to lay the foundation for subsequent operations." In the daily operation and marketing of franchise stores, Yu Ni will provide precise empowerment in membership, takeaway, reviews, Douyin, community, store activities, etc., to help the store continuously improve its performance. "During the epidemic, we provided Dianjin promotion and support in terms of takeaway, and helped franchisees increase traffic according to a 2:1 subsidy."
lowers the entry threshold for franchisees and enhances daily operation training. It is the consensus of most companies in the industry to expand their businesses. The Qiandian chain catering brand Wuye Mixed Noodles have also made adjustments to the epidemic, and the policy of "free management fees in the middle-risk areas of the epidemic across the country." In addition, all franchisees under the Wuye Noodle Brand have unified management fees, from 5% to 3%. The headquarters team is also tutored in daily operations.
Judging from these countermeasures, for chain catering brands, they should not treat negative thoughts, but should actively treat the impact of the epidemic. After all, while the epidemic is normalized, brand development is also normalized. Only by adjusting measures in a timely manner can we explore a certain development curve and continue to expand in an uncertain market environment.
seizes all channels to make up for the loss of offline dine-in
The traditional catering channels mainly rely on offline store business, but at the moment when epidemic prevention and control is normalized, many cities have adopted the suspension of business in intensive industries such as the service industry. A series of tightening measures regarding the catering industry have caused damage to the sales of stores.
However, there is no doubt that catering is a gold industry. Although the epidemic has reduced the sales of dine-in business, brands can still make up for the losses of dine-in business through new profit models. Qing Yong also said, "The urgent need for food will not be affected by the epidemic; the impact of the epidemic is the eating scenario."
"In response to the situation where dine-in in some cities cannot be done, we will quickly formulate and support stores to carry out channels such as takeout, delivery, guaranteed meals, corporate and community group meal services, and make full use of brand private and public domain traffic for publicity." Yu Ni told Lieyun.com that through the development of takeout and group meal business, the average daily turnover in Beijing has recovered to about 60% before dine-in during this period, and some stores have a daily turnover that is the same as before dine-in.
"In the past two years of the epidemic, we have been deeply engaged in the field of takeaway. After supporting platform resources, promotion and promotion, menu optimization, business training, etc., we achieved an annual growth of more than 70% in 2021 compared with 2020." Yu Niu mentioned in the interview that through refined takeaway operations, increasing the sales of franchise stores in the takeaway channel can stabilize the basic market of the store. In addition, the headquarters has opened up channels for store order sources through Taobao live coupon sales, Douyin live coupon sales, etc. to resist the impact of the epidemic.
According to public data, before the epidemic, takeaway accounted for only 18% of the overall revenue of the catering industry, while after the epidemic, this figure increased to 63%. This shows that the importance of online channels to merchants under the epidemic can also reflect the awareness of the ability of online channels to improve sales. In this context, as a brand owner, we should do a good job in online channels and empower franchisees.
From the perspective of the market environment, current consumers have a wider source of information to obtain. It is unreasonable to still only focus on the channels that have been lost at this time. One of the solutions to stabilize sales is to explore channels with stronger risk resistance and wider customer acquisition scope.
Li Wenyang told Lieyun.com, "Mr. Xiong is currently a model of separation of management and sales. Through the marketing planning of the headquarters, it supports the performance of franchisees." During the epidemic, Li Wenyang said, "As long as the store does not require the store to be closed due to control, sales will increase."
The dumplings made by Mr. Xiong have the attributes of fresh retail + dine-in + takeaway. Based on the fresh food retail attributes of the category, Mr. Xiong started Douyin live broadcast, helping franchisees further acquire customers through online live broadcasts and offline verification. In addition, Mr. Xiong’s official Douyin account has also started a group buying business and live broadcasting the scene of making dumplings on site, consolidating the brand image and enhancing users’ trust in the brand.
