Be careful, fall into the pit of the star franchise brand on the list

文 | 蓝鲨消费，作者 | 陈世锋，编辑 | 卢旭成

Franchise is the hottest way of operation in recent years, and the most intuitive manifestation is that from first-tier cities to eighteenth-tier small counties, and even townships, there are various chain brands "crazy involution".

Today, many chain brands have broken through the scale of 10,000 stores, such as Michelle Bingcheng, Luckin Coffee, Wallace, Zhengxin Chicken Chop, Pot Rings, etc., and more chain brands are rapidly moving towards 10,000 stores, such as Gu Ming, Shanghai Auntie, Tea Baidao, Snacks are very busy, etc.

For some people who want to start a business, they want to seize those opportunities at their fingertips and realize their entrepreneurial dreams by joining certain brands. For example, some female entrepreneurs in their 30s choose to join and open a small but exquisitely decorated beauty shop, whose business includes nail art, eyelash art, and basic medical beauty projects to meet the beauty needs of girls......

Joining, it seems that the threshold for people to start a business has become lower, but it is not "as soon as you join and win". Not long ago (April 12), in the "2023 Top 100 Chinese Catering Franchise Brands" officially released by the China Chain Store & Franchise Association and Meituan, many brands have certain problems.

Source: China Quality News Network, Black Cat Complaints, Blue Shark Consumption Collation

In a tough competitive environment, there is a brutal statistic that about 80% of franchisees are in the red. For franchisees, "avoiding pitfalls" is a key issue.

The potholes are all different

"How happy I am when I drive, how embarrassed I am ...... later."

A Xiaohongshu blogger who is suspected of being a franchisee of Cudi Coffee, with just two sentences, has exhausted the bittersweet and sour of the franchise coffee track.

In October 2022, Lu Zhengyao founded Cudi Coffee, and in just about a year, he brought Cudi to the doors of Luckin and Starbucks, making the number of Cudi stores second only to Luckin and Starbucks. According to the data of Narrow Door Catering, up to now, the number of stores of Cudi Coffee is 6,820, and it took 16 months. Compared with Luckin Coffee, when it was established 16 months ago, the number of its stores was only more than 2,000, and in terms of store opening speed, Cudi far exceeded Luckin that year.

But at the same time as the rapid opening of stores, Cudi Coffee closed a lot of stores. According to the "Blue Book on the Development Trend of Chain Catering Brand Stores in the First Half of 2023", in the first half of 2023, Cudi ranked first in the number of stores opened, but also ranked first in the number of store closures.

In November last year, a franchisee posted a "letter to the management of Cudi Coffee Company" on social platforms, which mentioned "low gross profit margin", "poor quality of operation managers", "the company only has managers, and there are no professional people to do training". Since the beginning of this year, Cudi's expansion rate has also slowed down significantly. The number of new stores added by Cudi hit a new low in March, with just 98 new stores, a sharp decline from the peak of 1,625 in July last year.

What is even more concerning is that under the strategy of crazy expansion, the founder Lu Zhengyao is deeply mired in the quagmire of "old lai". Although Cudi said in an interview with the reporter of "Daily Economic News", "There is no impact, and everything is normal at present." However, Bao Yuezhong, a new retail expert in FMCG, pointed out that as the main controller, Lu Zhengyao's "height limit" will have a certain impact on the Cudi coffee brand. "Including investors, raw material suppliers, related related traders, etc., it is inevitable to worry. ”

Entrepreneurial stars are not necessarily reliable, and franchise brands blessed with star halos may be more "pitted". Xianhezhuang, which once had more than 800 stores across the country, has now shrunk sharply in stores across the country. According to the data of Narrow Door Restaurant, the number of stores is only 98.

Since the beginning of May 2022, Xianhezhuang has been sued by many franchisees for rights protection, and Chen He and Xianhezhuang have also stood on the cusp, On May 12, Chen He quietly withdrew from the list of shareholders of Xianhezhuang, once again "stimulating" the damaged franchisees, resulting in further fermentation of public opinion. But Chen He is a mascot at all, and the franchisee rushed him to join, in fact, behind the scenes of the brand is Sichuan Zhishan in operation.

It is worth mentioning that Sichuan Zhishan has attracted more than 50 celebrities such as Huang Xiaoming, Chen He, Guan Xiaotong, Sun Yizhou, etc., and has operated countless star catering projects, involving more than 4,000 stores of various brands. In addition to Xianhezhuang, there is also a natural stay associated with Guan Xiaotong, who was also sued by the franchisee to the court. Franchisees want to make consumers' money by relying on star catering, and Sichuan Zhishan wants to make money from franchisees by relying on star halo, but they lack the ability to operate catering.

The half-heavenly demon known as the "Haidilao of the grilled fish world" was also "planted". During the epidemic, when other brands were closing stores and losing money, Bantian Demon opened more than 1,000 stores, which is an existence that many brands have to learn, but it is finally "planted" in food safety issues. At the 315 party in 2022, the half-day demon who fished for meals in the trash can was publicly named, and for a long time after that, the passenger flow of the half-day demon decreased sharply, and other franchisees followed suit.

The CCTV commented that the "joint operation model" and "full shareholding" of Bantian Demon have achieved deep interest binding and formed a "community of interests". However, this can also easily lead to the disorder of daily management, induce the disadvantage of "profit is the only move", do everything to make money, and even "as long as it does not stink, you can continue to use it", and finally become a "pit customer community".

But in fact, it was not exposed by 315, and the taste of the half-heavenly demon was also criticized for a long time. One-third of the black cat complaints and Meituan's negative reviews are complaining: the fish will scatter as soon as it is touched, and no matter how heavy the seasoning smell is, it can't cover the fishy smell of the fish, which is because Bantian Demon replaces live fish with frozen fish in order to improve the turnover rate. In the case that consumers are paying more and more attention to health and taste, the competition in the grilled fish industry has reached the stage of high-quality retention, and the "money scene" of joining Bantian Demon does not seem to be clear.

During this year's "3.15" period, some media revealed that there were chaos in Baiguoyuan stores such as using rotten fruits to make high-priced fruit cuts, and overnight fruits being used as fresh fruit sales. Later, Baiguoyuan said that it had verified and verified it as soon as possible, and closed the franchise store involved for rectification and a comprehensive and thorough investigation. It emphasized that although it is a problem of individual stores, it also highlights the loopholes and flaws in the company's management.

At the same time as the food safety problems were exposed, it was becoming more and more difficult for the franchisees of Baiguoyuan to make money. In 2023, the revenue of Baiguoyuan's main franchised stores will decrease from 8.851 billion yuan in the previous year to 8.5 billion yuan, a year-on-year decrease of about 4%. This means that the average annual revenue of the franchised stores supervised by Baiguoyuan is in a state of decline, and this indicator will drop from 2 million yuan in 2022 to 1.8 million yuan in 2023, a decrease of 9.8%.

The "money" of a store does not mean that the entire brand has a competitive advantage. Long Zhen, a franchise evaluation expert and founder of Jiameng Data, told Blue Shark Consumption that he once saw a tea brand called "Heqi Taotao" in the third-tier city of Luoyang, and the customer flow was more than that of Mixue Bingcheng, and the queue was particularly fierce. But in fact, the performance of Heqi peach in the country is not outstanding, and it can even be described as "trough cake". In the case of increasingly fierce competition in the tea track, franchisees also need to keep their eyes open.

How to avoid pitfalls?

Judging whether a famous brand is worth joining, there are many factors to consider, first of all, whether the brand has franchise qualifications, according to the Ministry of Commerce of the People's Republic of China on February 1, 2012, the implementation of the "commercial franchise record management measures", requiring enterprises to carry out franchise activities to carry out the record and information disclosure - truthfully disclose the status quo of brand management, chain layout, business resources (trademarks, patents, etc.), investment calculations and other important information. Multiple channels such as Tianyancha and Qichacha can query the detailed information of relevant brands to avoid the risk of joining to a certain extent. From the current point of view, many franchisees are "tricked", often because they have joined the non-compliant brands of "Touch Porcelain" big brands (such as Mixue Bingcheng, Heytea, Master Bao, etc.).

Secondly, category selection is also important. Long Zhen, a franchise evaluation expert and founder of Jiameng Data, told Blue Shark Consumption, "In the past few years, Japanese-style matcha was very popular. At that time, Wuxie, one of China's largest Japanese matcha brands, had a monthly turnover of 700,000 yuan at its Blue Harbor store in Beijing, but then the turnover began to shrink gradually. The category cycle is an unavoidable pain point. "The same goes for crispy pork belly, cheesecake, Swiss rolls, etc., all of which have very short life cycles. In this case, some franchise brands are frantically promoted at the most glorious time, seeking to cut a wave and run, and franchisees should have the expectation of being "cut leeks".

Furthermore, look at the brand potential energy. "For example, Ice and Snow Time and Honey Snow Ice City, the price is about the same, and some items of Ice and Snow Time are better than Honey Snow Ice City, but the brand potential energy is not as good as Honey Snow Ice City," Long Zhen said, "mainly because of the lack of store expansion and marketing capabilities." ”

The same brand will also have different store types to adapt to various consumption scenarios. For example, if the community and the shopping mall are the same, the franchisee's income may be very different. Therefore, for franchisees, they must find a store type that suits them and settle accounts according to this store type. "Joining is not copying, not moving the tree somewhere else. Joining, in fact, is moving the tree and the surrounding soil to other places. It's not just about the trees, it's about the soil and the environment. Only move the tree but not the soil, and the franchisee will not be long," Long Zhen said.

How many people are in the brand headquarters and how the personnel are distributed is also a particularly important thing. For example, 80% of the people in the headquarters are engaged in attracting investment, and the problem of this brand will be relatively big, and it may be insufficient in R&D, supply chain, and marketing, and the development model will be unhealthy. In addition, the more brands in the headquarters are, the more dispersed its efforts are, and it may be a typical quick-recruitment company, which is very prone to big problems.

The ability to integrate the supply chain is also a factor that franchisees need to investigate in depth. "Actually, if you only have a brand with 200-300 stores, there is no need to do factories. If you want to make money from the supply chain, you may increase the cost of ingredients and other things, which will lead to thin margins and lose the price war. Long Zhen told Blue Shark Consumption, "The more the headquarters wants to earn money from franchisees, the faster franchisees will die." "There is another example, if a brand wants to make money from the supply chain, it may shrink to a certain geography. For example, Jiuduo has a lot of meat, and only opens stores in a few cities such as Luoyang in Henan. With more than 7,000 stores, Gu Ming also initially expanded step by step from Fujian. On the other hand, franchisees should also inspect the brand on the spot to see whether the supply chain supports the opening of stores locally.

Consumers' evaluation of brands also has important reference value. For example, consumer complaints and feedback on platforms such as Black Cat and Meituan can also be observed through offline stores to see their foot traffic, consumption, and consumer satisfaction.

In fact, consumers are all about the new and the old. "Brands that are more than 5 years old basically have some problems, because the current consumption environment has changed, and the entire consumption is downgrading, resulting in the mainstream price band moving down, which means that the original product structure needs to be reshaped, and the product portfolio has to be reversed. Long Zhen said, "For example, like Zhang Liang and Yang Guofu, their problems are very serious, and they are affected by the cross-border impact of new products such as self-service hot pot, Thai spicy hotpot, and steamed vegetables." ”

For catering and other practitioners, they may never know what kind of store of the same category will be opened next to it. In the current competitive environment, if you consider it from the certainty of joining, the probability of success of choosing a certain strong energy brand is higher. If you choose a new brand, you need to do fine calculations, with the expectation of fast in and fast out, and bet that the brand can return on its cost in a very short time. "It's just a matter of fire, it's stressful, and only veterans can understand it," Long Zhen said.