Image source @ Visual China
Text | Meal Alliance Research
The catering industry is in full swing, and it is becoming more and more difficult for the catering enterprises in the industry, and the bitterness comes from "internal and external troubles".
The haze of the epidemic hanging over the catering industry still makes the hearts of catering people palpitate. Affected by the epidemic, the scale of the catering market in 2020 fell by 15.4%, and the number of catering enterprises decreased by 11% compared with 2019. So far, whenever the epidemic coldly kills a return gun, many diners are forced to leave.
However, the industry is sending positive signals. According to the data, last year's national catering revenue reached 4,689.5 billion yuan, close to recovering to pre-epidemic levels, and the market size is expected to reach 6.6 trillion yuan in 2024. The development space seems to be "out of reach", and the fact that cannot be ignored is that although the cake is large, the catering enterprises can really eat but do not know how much. Because the industry has long been boiling, the influx is countless.
As of last year, the number of catering stores in the mainland reached 9.3 million, and in the first 11 months of 2021 alone, the number of catering-related enterprises registered exceeded 3 million. Money and dreams poured out the enthusiasm of caterers, and together they brought about increased competition.
As far as the hot pot track that caterers "squeezed their heads" into, the overall number is nearly 400,000, 68,000 were registered last year, but in the first half of the year, 16,000 players were out, and about 30% of the hot pot companies did not survive for two years.
Behind the fiery catering industry, it has always been "knife to blood". The rise and fall of the hot pot industry is just the tip of the iceberg. There is no shortage of life and death in the dining world, both new people laughing and old people falling. According to the data of enterprise investigation, 885,000 catering enterprises were revoked last year.
Of course, there are many catering companies that have broken through the siege and worked hard for decades to create beautiful talk such as "how many old stores", but they do not have the scale and are always two or three stores in a corner of the security. In the wall, the old opponent grows, the rising star catches up, and there are still enterprises that are still unaware, and they do not know how to break through.
Even with the development trend of catering chains, prescient catering enterprises have rapidly expanded stores, seized the market, improved brand voice, occupied the user's mind, and the "lost" catering enterprises do not know how to participate, and gradually slide to the abyss of marginalization.
It can be seen that the catering industry is closely related to the external environment and cannot be left alone; the competitive pressure in the industry is large, it is difficult for enterprises to survive; and the lack of scale, chain thinking and ability of catering people are all problems facing catering enterprises. How can catering enterprises find their own problems, solve them one by one, and find the ideal development path?
Han Yuting, an expert judge of excellent franchise brands of the China Chain Store & Franchise Association and a special expert of the Restaurant Alliance Research Think Tank, shared the knowledge of franchising, and gave a trend analysis on the development of restaurant chain franchises in 2022, and explored the development and operation of catering enterprises.
01 The dilemma of restaurant enterprises
Catering is a contradiction, bringing warmth to diners, making them warm and full, and has a cruel side, carrying the industry shock and reality of "only smelling new people laughing, where smelling old people crying". The latter can only be loaded by catering enterprises.
When the environment is unfavorable and the industry is cold, the first to bear the brunt is the enterprise. In 2020, the new crown epidemic struck, and the catering industry paid a heavy price of 500 billion yuan in losses on the 7th. A large number of catering enterprises have been hit by the blow, 78% of the enterprises have lost more than 100% of their income, and 321,000 catering enterprises have been revoked throughout the year, which has also caused a situation of accelerated elimination and cautious investment.
Direct chain enterprises because of the high rent, labor costs, coupled with the past store scale advantage has become a shackle, every day of closure there are tens of thousands, hundreds of thousands of expenditures flowing. Some time ago, the tea face and pleasant public opinion turned over, which seemed to be that the salary of employees was not proportional to the payment, but in fact, the cost compression behind the impact of the epidemic and the monthly loss of the enterprise was 20 million.
The tragedy of the times is put on the individual, making it more vulnerable, the individual cash flow is insufficient, the ability to resist risks is lacking, the self-help ability is weak, and it is easier to fall. Last year, Henan epidemic, flood situation repeated outbreaks, a hot pot shop in Zhengzhou because of "too miserable" by netizens well-
A grain of ash of the times, falling on the head of an individual is a mountain. Today's restaurant businesses are embroiled in another volcano. With 3 million new players added a year, the overall volume of 9.3 million homes brought new stories to the restaurant, while competition soared.
100 meters on the street there are 8 restaurants cloth shop density is the norm, in order to rob customers, many catering companies heavy investment in marketing, please Internet celebrities, Hunan a Hunan Hunan cuisine brand stationed in Shanghai, each year out of 10 million yuan to advertise. In addition, ultra-low-price group purchases similar to 88 yuan for 6 people are emerging...
Those catering companies that only rely on traffic to beat out the position ignore the food and cannot escape the end of "seeing the light and dying". Strong catering brands can still use high-quality, multi-variety of food, appropriate marketing, brand effects, etc. to temporarily stand at the table, small and medium-sized catering enterprises are weak, no money to fight, can only be squeezed out of the track.
Some new tea brands are rapidly expanding stores, reducing prices, sinking, and developing sub-brands, which are the best examples of brand close-to-body hand-to-hand combat under the increasingly fierce competition in the tea industry. This also brings financial pressure to brands, especially direct chain brands, and the chain reaction brought about by poor efficiency or even loss often leads to layoffs and store closures.
Even so, catering companies have to endure the pain. Giving up the race is equivalent to giving up the market and giving up the opportunity to be remembered by consumers, especially the establishment of a batch of new brands in the catering industry, and catering enterprises that have not achieved scale and branding are easily forgotten.
Self-employed individuals and small and medium-sized enterprises, limited by funds, business thinking, strategic playing methods and other aspects, may only be able to circle around one store, five or six stores.
With the upgrading of consumption, when consumers see a hot pot brand or barbecue brand that has opened stores everywhere, or seven or eight tea brands are densely packed on a street, they have a greater chance of choosing a brand, or do they have a greater chance of choosing an obscure small shop? From a business mindset, it is not a virtue to open only one or two stores in twenty years. Nowadays, even consumers in small counties and towns are showing a good impression of large-scale brand stores, let alone other areas?
Under the background of new catering and new consumption, there are new brands tearing open a hole in the original track, completing a new round of user acquisition with a new story, and later attacking the city through rapid scale, just like new ramen, new baking brands...
There is not much time left for catering businesses.
02 The key to breaking the game
The key to breaking the game may be to join the chain.
Generally speaking, the development of enterprises follows the principle of first having entrepreneurial ideas, and then using technical means to create products.
Put it on the market and monetize it for profit. After finding a sustainable profitable business model, if the company only stays at the stage of how many products are sold every day, it can only be made into a small shop instead of a business.
Han Yuting said that finding a way to do things is more effective with half the effort, and the key to making small shops into enterprises and enterprises with Hengqiang is to find a way to achieve large-scale, and chain operation is the best way.
Unlike direct chains, which are under multiple pressures such as capital, operation, and management, the larger the step, the heavier the burden. Franchise chains make franchisees and enterprises a community with the nature of benefit sharing and risk sharing.
Han Yuting said that in 2022, enterprises are pursuing burden reduction and lightening, and becoming lighter is not that enterprises should "throw their hands in charge", but perform their duties, part of which is responsible for the enterprise and part of which is cooperated by franchisees.
Franchisees digest the financial pressure of catering enterprises, and the advantages of brand effect, system support, marketing promotion, management training and other advantages formed by enterprises through years of accumulation are a strong endorsement for franchisees to enter the market quickly.
"The essence of franchising must be two heads light, through the integration of resources, each taking its own responsibilities, the exchange of interests for franchisees and enterprises to reduce the burden, and ultimately achieve common profits," Han Yuting said.
In addition, the system and model are the two sharp blades brought by the franchise chain, the former is the methodology of making money, and the latter is related to the cost of the project.
As Han Yuting said, many enterprises develop to the scale of hundreds of stores, it is easy to encounter bottlenecks, restricting the enterprise is not the volume, supply chain, product problems, but management problems, that is, system construction problems.
Brand, system, support to create a complete closed loop of franchise success, in which the brand effect occupies the consumer's mind, the survival rate and profitability of the franchisee.
"We can see that the catering brand system of Wandian is relatively sound, and the products, services and dining environments they provide in different regions and different countries are highly standardized, which can effectively retain customers, and high customer stickiness means strong profitability." Han Yuting believes that the system is crucial, it points to whether the profitability can be transitioned to franchisees, and even the system is adjusted with the different stages of development of the enterprise and the different development scales.
The system is also a measure of enterprise development and self-examination. Some catering brands have the mentality of eating a fat man in one bite, and the pace is just stable, and they want to run through the country, but the development boundary is determined by the service ability of the enterprise. If it is beyond the scope of the region where the enterprise provides support and services to franchisees, the enterprise should carefully consider it. It just shows that compared with single stores and small stores, franchise chain stores have a strong backing and improve the survival rate.
The franchise chain model is diverse, divided into two types: product category and business model, the former is profitable by product price difference, the latter is profitable by intangible assets, and the model difference affects the cost of the project, which is also related to the cost of investors.
The best model has both product and model characteristics, the franchise chain of the catering industry needs to export raw materials, substrates and other products to the franchisee, but also to provide model support for it, from this point of view, the catering industry can be regarded as the best model of the franchise chain.
Therefore, whether it is for enterprises or franchisees, joining the chain is indeed beneficial.
03 Joining, the only way?
The relevant data supports the high adaptability of the catering industry and franchise chains. The data shows that in the industries that use franchising, the catering industry accounts for the highest proportion, reaching 35%, higher than education, retail, and beauty.
Especially since the beginning of this year, Baidu searches on catering franchises have grown exponentially, and more and more entrepreneurs have released relevant demand. Entrepreneurs can use the advantages of the platform to avoid risks and improve the success rate, but it does not mean that joining the chain is a must or a life-saving straw for catering enterprises.
The focus of dining is on the food. Among the factors that affect consumers' dining, the taste of dishes ranks first, followed by the cost-effectiveness of the restaurant and the internal environment. At present, there is no shortage of catering companies that take shortcuts, perhaps relying on appearance, gimmicks, and traffic to obtain temporary dividends, but the life cycle is short.
On top of quality, joining the chain is the springboard of the enterprise. Han Yuting suggested that to do a good job in joining the chain, you need to follow four principles: find a model that suits you; manage franchisees with high quality; jogging in small steps; consolidate yourself and avoid excessive marketing.
As mentioned earlier, franchising includes two types of products and models, and is subdivided into single-store authorization, regional authorization, regional second-level, regional agent, and mixed franchisor, each of which has its own advantages and disadvantages. The delicious duck neck of the wandian scale adopts a single-store authorization, and the speed of expanding the store is slower, but the guidance and management of the headquarters to the franchisees is large.
Regional authorization improves the initiative of franchisees, and will also bury the hidden dangers of a monopoly and regional protection. No matter which model, it is impossible to compare objectively, and enterprises should "teach according to their own circumstances".
"An enterprise must first clarify what type of development it belongs to, different types of franchise authorization models, profit models are different", Han Yuting also said, enterprises choose franchise models to consider barriers, resources and planning.
Macroscopically, enterprises formulate development strategies, such as setting a goal of opening 500 stores and 1,000 stores a year, and comprehensively examine whether they have strong barriers, such as my supply chain, resources, and service capabilities can support coverage of certain areas. If there are shortcomings in the enterprise, it can first split the small target and make a strong regional brand, not necessarily pursuing the blossoming of the whole country.
"Teaching according to aptitude" is also reflected in the management of franchisees by enterprises.
According to Han Yuting, the headquarters of catering enterprises generally manage franchisees through three ways: pure franchisees, franchisees direct operation, and trusteeship, and trusteeship is suitable for setting up a model in the early stage and improving the survival rate of franchisees, but it has extremely high requirements for the quality of headquarters talents. Management is the cloak, and the empowerment and support of franchisees is the core.
In Han Yuting's view, the success or failure of enterprises is not in fancy marketing, in the quality of catering, operation, support, marketing and other system construction, standardization, digital capabilities, and more importantly, small steps jogging.
In the past one or two years, hot money has poured into the catering industry, and many catering brands have been coaxed by capital, opening hundreds of thousands of stores a year.
What needs to be vigilant is that capital is a double-edged sword, on the one hand, it brings cash flow, integrates resources, and helps enterprises to run freely, on the other hand, enterprises only care about blindfolded and run wildly, ignoring problems such as the system is not yet perfect, insufficient product research and development, and short-term prosperity is caused by marketing.
"I suggest you don't go too fast in 2022. Laying a good foundation can we move forward steadily, which is the foundation of doing business and branding. ”
epilogue:
Joining this business model helps enterprises achieve scale and enhance their upstream and downstream bargaining rights, but how to use it rationally, clarify at which stage to open up and join, and what kind of franchise to implement are all important parts of enterprises that cannot be ignored.
It is worth noting that direct operation and franchise are only the mode of operation, and the job of catering enterprises is to continuously provide good meals. The meal is 1, and on this basis, the model, system, etc. are imposed to compose the following prologue.