A small step for tea Baidao, a big step for catering to join.
Author | Editorial Department of Pinzhao
Yesterday, there was a major event in the catering franchise circle - Tea Baidao, which has 8,000 franchise stores, was successfully listed on the Hong Kong stock market! As the first share of franchised tea drinks, this also attracted the attention of the entire catering circle.
Good news, the opening market value of Tea Baidao exceeded 20 billion;
The bad news is that it fell for two consecutive days after listing, down 34%, and fell by 8.7 billion in two days.
However, although Chabaidao has suffered setbacks in the secondary market, there is one fact that cannot be ignored, that is, the catering industry is setting off a wave of franchise brand listing boom:
In addition to Tea Baidao, Mixue Bingcheng, Shanghai Auntie, Gu Ming, etc. have also submitted applications on the Hong Kong Stock Exchange, and Bawang Chaji and Xinshi Brewing have also reported that they are preparing to go to Hong Kong or go to the United States for IPO.
In stark contrast, since the listing of Jiumaojiu Hong Kong stocks in 2020, the brand of pure direct sales model has not successfully landed on the main board, and Naixue's tea, Haidilao, etc., which have been listed, have also recently announced that they will open up to join.
Last month, at the 2024 China Catering Industry Summit held in Wuhan, Li Jian, chairman and CEO of Xinliang Kee, proposed that there are only two futures for chain restaurants: partnership direct operation and high-quality franchise.
The development speed of high-quality franchise is obviously more than that of the partnership system, taking the tea industry as an example, tea is currently the catering category with the highest chain rate, with a chain rate of 49%, of which, the top 5 franchise brands alone have occupied 40.2% of the market share, and the overwhelming advantage and strong expansion of the head brand can be seen.
Therefore, the listing of Tea Baidao is not only the success of joining the tea brand, but also indicates the advent of a new era.
This is the era of product recruitment!
What is the era of catering?
In 1850, the United States Singer sewing machine first distributed the franchise rights of Singer sewing machines to merchants all over the United States, and thus developed rapidly and successfully occupied the market. It also allows people to experience the unique charm of the franchise model for the first time.
In 1987, KFC opened its first store in Qianmen, Beijing, marking the official opening of the franchise chain model of Chinese restaurants.
In the more than 30 years since the franchise entered China, this market has also experienced from the enlightenment stage to rapid development, from the mixed fish and dragons to the sickle, from the crowd to the current legal and compliant product recruitment era, during which there have also been many representative brands and typical cases.
In 2004, Little Sheep set up a franchise chain service center to standardize the franchise service, and four years later, Little Sheep successfully landed on the Hong Kong stock market.
In October 2017, Zhengxin Chicken Chop achieved more than 10,000 stores with the franchise model, becoming the first catering brand in mainland China to reach the scale of 10,000 stores.
In 2024, Haidilao, Jiumaojiu and other direct-operated brands that previously claimed that they would never open franchise announced that they would open the franchise model.
In addition to positively promoting the development of the restaurant chain industry, the quick recruitment fraud has also had a wide impact, and there are not a few criminals who commit fraud under the banner of joining.
In March 2023, the Shanghai Songjiang District People's Court issued a verdict on the relevant personnel of the Kuaizhao Company involved in the "Chazhilan" case, with sentences ranging from three years and one month to 14 years and six months.
The case was listed as a typical case by the Supreme People's Procuratorate丨Source: The official website of the Supreme People's Procuratorate
Behind the case, there were 5,800 victim franchisees, with a total loss of 440 million yuan. The average franchise fee per person is 76,000 yuan, and if the cost of opening a store is included, it can be said that this is a tragedy involving 5,800 families.
The endless quick recruitment incidents have brought an extremely bad impact on the franchise chain industry, and the word franchise has become no longer credible and even become a synonym for cutting leeks.
Until 2024, the head brands will begin to embrace the franchise, and the catering franchise industry will finally enter the era of clear and fast recruitment, and welcome the era of product recruitment, let us use a picture to distinguish the main difference between fast recruitment and product recruitment:
What are the benefits for entrepreneurs?
First, the franchise behavior is more standardized.
In the past, many franchise brands had the most common problem, that is, the franchise rules were changed at will, and it was difficult to fulfill the promises.
Nowadays, on the one hand, big brands are subject to public scrutiny, and on the other hand, companies need to undergo strict scrutiny by the China Securities Regulatory Commission after listing. This pressure has prompted brands to clarify the boundaries of their responsibilities and think deeply about what value they can provide to franchisees. This is a significant shift in the "era of recruitment". In contrast, small brands still need a long time to accumulate and improve in franchisee management.
In the past, there were many catering franchise disputes丨Source: China Adjudication Document Network
The rights and responsibilities of both parties are clear, which also indirectly improves the social identity of big brand franchisees. For a long time in the past, opening a franchise store was regarded as being cheated, but now no one will ignore a franchise store owner of Luckin or Heytea.
Secondly, joining the "product recruitment system" means more opportunities to make money.
On the one hand, premium brands tend to deepen cooperation with franchisees to promote successful replication and continuous expansion of stores.
Luckin stores have been rapidly expanded through franchisees丨Source: Photo by Red Meal
Taking Luckin and Heytea as examples, they often give priority to providing opportunities to old franchisees, and when new areas open, they will give priority to those franchisees who have already opened stores. When Haidilao selects franchisees, it also clearly requires franchisees to have funds that can provide multi-store operations. According to Gu Ming's financial report, the average operating profit of Gu Ming franchisees in 2023 will reach 376,000 yuan, and senior franchisees usually operate 3 or more stores.
On the other hand, the experience and performance accumulated by these franchisees in the business practice of well-known brands can become the key to opening the door to other high-quality brands. Many leading brands have the experience of joining other brands as a priority condition for joining their own brands.
In addition, the choice risk of entrepreneurs is reduced.
In April, the Red Meal Franchise Preferred Platform officially changed its name to "Red Meal Recruitment", which is the team's in-depth thinking about the future development of the catering franchise industry. If you want to truly achieve quality to join, only start from the quality of investment, from the source of the project to control, each brand included in the red food recruitment platform is a project that has been strictly screened by the quality recruitment standards, entrepreneurs reduce the risk of project selection, and put their energy on project matching.
There are many traditional franchise exhibition brands, which are difficult to screen丨Source: Picture Worm Creativity
In the "era of recruitment", it is inevitable that the head brand will accelerate the integration and eliminate inferior brands, and if the entrepreneur can be locked in the scope of the product recruitment from the beginning, this will greatly reduce the risk of the entrepreneur choosing the project.
In the era of recruitment, what should entrepreneurs do?
With the advent of the era of catering recruitment, the industry is becoming more and more a two-way choice, and brand screening is also competing for high-quality franchisees, and franchisees have also changed from pure entrepreneurial relationships to brand co-creation partners. For catering entrepreneurs who are committed to realizing themselves through franchise, Red Meal Recruitment puts forward 3 suggestions:
1. Join the professional community as early as possible:
In the era of recruitment, joining will eventually become professional and professional, and small white entrepreneurs are no longer suitable for this industry, entrepreneurs who are interested in deep cultivation in the sub-industry must join the professional franchisee community as soon as possible and walk with like-minded people.
In the community, you can exchange experiences and share cases with other professional franchisee partners, get the industry trends and market trends at the first time, and build a professional franchise social circle with smooth information and experience sharing.
2. Seek professional counseling:
In the era of product recruitment, the maturity of the market has been continuously improved, the threshold of the industry has gradually increased, the initial stage of rookies pecking each other has ended, and the market has entered a new era of fairy fighting. Even if they are all excellent brands, the small difference in the early stage is enough to lead to the difference in the final result.
In the era of recruitment, you can't blindly follow the so-called "expert V" on some short video platforms, but you must look for professionals with rich practical experience and real insight, because who you walk with is more important than the distance you want to go.
The scene of the previous courses of the Red Meal Growth Club 丨Source: Photo by Red Meal
3. Continuous learning:
In the era of product recruitment, the speed of product iteration and brand clearance is accelerating, forcing the brand to continue to grow, and entrepreneurs must have a lifelong learning attitude.
Only by taking the initiative to train and industry summits, carefully study the research reports of industries and categories, and become a real professional franchisee, can we become bigger and stronger in the fierce market competition.