Recently, a media report called "Undercover Wallace's Kitchen" became a hot search and aroused heated discussions among netizens.
The report revealed the production process of Wallace's back kitchen, the fryer that only changed the oil in three days, the operating table frequented by cockroaches and flies, and the staff who did not wear masks and gloves, all kinds of problems were shocking.
For Wallace's health problems, in fact, it has long been a cliché, whether it is online ridicule, unannounced interviews, or the public punishment of Wallace by relevant departments, Wallace's food safety problems have always existed.
However, what is puzzling is why Wallace, which has been criticized constantly, was able to open 20,000 stores in China and become the head restaurant brand with an annual income of 7 billion?
What is the "special" thing about this store?
In the early 90s, KFC and McDonald's entered the Chinese market one after another, and the opening was unprecedentedly hot. Since then, KFC and McDonald's chain stores have blossomed everywhere in first-tier cities, and "foreign fast food" has become all the rage.
With the growing popularity of "foreign fast food", two brothers, Hua Huaiyu and Hua Huaiqing, from a farming family in Wenzhou, seized the business opportunity, and the two brothers scraped together 80,000 yuan to set their sights on the second- and third-tier cities that have not yet been fully developed.
In January 2001, Fahrenheit Brothers imitated the decoration and business model of KFC and McDonald's, and opened the first "foreign fast food" store at the gate of Fuzhou Normal University, named Wallace.
With a similar fried chicken burger, a similar price, and a children's playground of the same size, they thought they could make a career, but the brothers soon discovered the problem.
With the products overpriced and unsatisfactory sales, and the average daily turnover after deducting costs, they barely made any money, and the brothers realized that imitation alone might not take long, and they couldn't afford it.
Since imitation can't be made, can you make a low-profile version of a cheap burger?
With the mentality of fighting against the water, the two brothers launched the "Special 123" promotion to fight a price war with giants such as McDonald's and KFC.
Coke 1 yuan, chicken leg 2 yuan, hamburger 3 yuan, a few dollars can eat delicious "foreign fast food" in Wallace, at that time can be described as unprecedented.
Such a cost-free style of play is almost crazy in the eyes of peers.
But it was this madness that turned Wallace around. As soon as the "Special Price 123" was launched, there was an endless stream of consumers in the store, and the turnover also doubled day by day.
The market has run through, but the profit model is still worrying, in this regard, Fahrenheit Brothers believes:
Whether it is McCann's siege or Wallace's "special price 123", it shows that there is a market for "foreign fast food" itself, but the consumption power of most ordinary people is not enough to support it.
To put it simply, the 10-dollar burger is not that I don't like it, but I can't afford it.
If you want ordinary people to afford "foreign fast food", then the low-price strategy must be indispensable.
Therefore, after Wallace canceled the "special price 123" activity, the price was still controlled below half of McCann's, and from time to time special activities would be launched, such as 10 yuan for 3 hamburgers, 9.9 yuan for a set meal, all of which made ordinary consumers flock to it.
However, there is no charity in the business battlefield, and if you want to make a profit at a low price, you must learn to reduce costs.
In order to make a profit, Wallace tried to reduce costs as much as possible, such as using cheaper chicken breasts, adding more flour, and maintaining a competitive price even at the expense of taste.
In terms of site selection, Wallace chose to compete in a dislocation position, KFC and McDonald's mainly attacked first- and second-tier cities, and Wallace avoided its edge and launched it into the sinking market.
In third- and fourth-tier cities, Wallace avoids the more expensive rents in the core of the city and opens stores in neighborhoods or secondary roads.
The store focuses on a small area, which can meet the dining conditions, and no longer sets up a children's playground inside, reducing all the costs that can be reduced.
Wallace gradually stepped out of a set of its own "affordable foreign fast food" operation model. With this style of play, Wallace opened 100 stores in Fuzhou in only 5 years.
In 2013, Wallace had more than 4,800 stores nationwide, more than 200 more than KFC stores in China at that time
。 In 2016, Wallace was successfully listed on the New Third Board, becoming the top chain restaurant company in China.
As of 2023, according to narrow-door catering data, Wallace has 20,326 stores nationwide, more than KFC, McDonald's, Burger King, and Tex combined.
Such results can't help but make people wonder, is Wallace's counterattack really just based on low cost and low price?
In fact, the low price is only the beginning of Wallace, in order to maintain a sustained low price, it is necessary to expand rapidly and run the volume.
As we all know, chain restaurants generally have two business models, one is to rely on capital transfusion to open direct stores, and the other is chain franchise.
However, both models have their own drawbacks, such as the model of relying on capital to open a direct store, which has a high cost of opening a store and is easy to be controlled by capital.
Another kind of chain franchise seems to achieve low-cost expansion by charging franchise fees to franchisees, but once the franchise store has an accident, the headquarters will always be the first to suffer, and the faster the expansion, the faster the brand will get out of control.
In these two models, Wallace has carved out a new path, that is, the "store partnership model".
What is the "Store Partnership Model"?
Neither rely on capital transfusion to open franchise stores, nor do they casually release franchises. Wallace adopts a new model of "store crowdfunding and partnership store opening".
Do not join, but can partner to open a store, Wallace through this way to delegate shares to the store partners, everyone risk sharing, the same interests, many employees from the identity of workers to partners, work is no longer to earn a dead salary, but to save for their own future, work motivation is naturally getting stronger and stronger.
Not only employees, but also external collaborators such as landlords and suppliers have joined in to become partners in the store. At this point, everyone is tied together and working towards a common goal.
The greater advantage of this model is that it can not only ensure the quality of direct sales, but also achieve the efficiency of joining.
As more and more stores opened, Wallace's headquarters provided more and more equipment and ingredients to the stores, ranging from chicken nuggets and ketchup to restaurant equipment, tables and chairs, which were all purchased by the stores from the headquarters, which was also Wallace's main source of income at that time.
According to the 2022 financial report of Wallace's parent company, Wallace Food, Wallace's total revenue is 7.144 billion yuan, of which raw material revenue accounts for 97.55%.
As of June 2023, Huashi Food's revenue was 3.371 billion yuan, a year-on-year increase of 17.04%.
In addition, for each store Wallace opened, the headquarters charged the store a consulting fee of 10,000 yuan. According to statistics, from 2013 to 2017, Wallace collected a total of 17.0272 million consulting fees in five years.
In the past three years, many catering companies have disappeared, and even the top brands are losing money, but Wallace has been able to expand against the trend.
In the three-year catering winter, Wallace has opened more than 8,000 new stores, and the total number of stores has exceeded 20,000 in one fell swoop.
However, while Wallace was expanding rapidly, problems related to food hygiene also broke out.
In July 2021, a blogger sent Wallace to the hot search.
In the original video, it was recorded that after the blogger went undercover with Wallace, he found that the chicken nuggets fell on the ground and would not be thrown away, but were picked up and put back by the kitchen staff.
When cleaning the range hood, the kitchen staff did not do the slightest protection, and the cleaning agent dripped directly onto the oil pan directly below.
To this end, Wallace urgently issued a public statement to suspend the stores involved for rectification, and at the same time attached great importance to food safety issues.
As early as March 15, 2019, reporters have repeatedly exposed Wallace's health worries, cockroaches crawling all over the ground, selling overnight or even expired food, and soy sauce-colored frying oil are still in use.
According to common sense, food safety is a serious topic, and it is related to the health and safety of every consumer. Wallace's operation will also form waves of brand crises.
However, Wallace still became the number one takeaway seller. Even these crisis events eventually converged into a meme called "Splatoon", which was used by netizens to commemorate the time spent with the toilet after eating Wallace.
At first, only a small number of people complained on the Internet that eating Wallace would make people have diarrhea, but then more and more netizens joined in, and some even went out of their way to buy Wallace to verify whether it was as squirting as the legend suggests.
Some netizens actually matched Wallace's various products to see which one sprayed more powerfully, and in order to judge whether it was a problem with meat or bread, they also ate bread alone.
Many netizens began to use Wallace as a good medicine to clear the stomach and treat constipation, after all, laxatives are not as delicious as fragrant fried chicken burgers.
is obviously an "inferior food" that makes people have diarrhea after eating, shouldn't it be criticized by the whole network?
But the fact is that Wallace's sales have not had a significant impact, and the number of stores has increased unabated.
Why is that? A Zhihu Q&A seems to give the answer.
Under the question "Why did eating Wallace diarrhea become a meme", a high praise replied: "Honestly, as long as it's cheap and legal, I don't care what kind of meat it is." ”
It's too cheap, this is the answer given by most netizens.
Some netizens recalled that their favorite thing when she was a child was Thursday, because every day, her mother would buy her a Wallace burger for 10 yuan and 3 pieces, which was the best memory of her childhood.
Wallace seems to have been put under a filter under the cheap price, and the food safety problems hidden behind it are gradually covered up.
Many people have justified Wallace's name: can they expect it to be as clean as they spend this little money? Just like no one would ask for how healthy and delicate the food is when buying a roadside stall and a takeaway of a dozen yuan.
Some netizens said, "We just grew up eating cheap garbage." "It's not just Wallace, it's that the vast majority of foods are probably unhealthy, and people have long been Xi to it.
Just like the sentence that netizens said when the food problem broke out in Mixue Bingcheng, "It doesn't think I'm poor, I don't think it's dirty".
In addition, some netizens are worried that the price of Wallace after rectification will inevitably rise with the cost, and many people may lose the opportunity to taste a "foreign fast food" at a low price.
Just yesterday, McDonald's announced price increases for some of its products and packages. Presumably, after this move, more people will pour into Wallace.
But can a low-cost product be blatant, justifiably equal to low quality?
Write at the end
For the catering industry, health and safety issues are the cornerstone of ensuring the long-term healthy development of the industry.
Here, every business has a compulsory course, which is to learn how to better meet the needs of consumers under the premise of ensuring food safety and hygiene.
Today, Wallace has long since become China's local fast-food chain giant, and consumers should be given a better answer.
Reducing costs is a condition for a business to survive, but it should not be used as a reason for failing to meet health and safety standards.
Consumers should not assume the low quality of products when they seek low prices.
Because no matter how cheap the price is, food hygiene is the bottom line that cannot be crossed in the catering industry.
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Resources:
1. Chengdu Business Daily: "Sinking and Low Price, Wallace Stores More than 20,000 Rank among the "Four Heavenly Kings"
2. Sina Technology: "My Brother Wallace's Kitchen: How to Elaborate a "Channeling Package"?
3. Hydrogen consumption: ""Jet Warrior" Wallace earns 7 billion a year by selling ingredients and equipment
4. Zhihu: "Why is Wallace Fried Chicken Called Splatoon?"
Author: Xiaogua
Editor: Willow Leaf chatter