Source of this article: Times Weekly Author: Tu Mengying Li Xinting
Standardized stores, conspicuous brand names, crowned with the concept of "herbal new tea", 1828 Wang Laoji's foreign investment looks very attractive to the market.
1828 Wang Laoji positioned the new tea of brewed herbs, and the offline store began to land in 2016. According to the official website, the operating body of 1828 Wanglaoji is Guangzhou Wanglaoji Catering Management and Development Co., Ltd., which is a holding enterprise of Guangzhou Wanglaoji Investment Co., Ltd., a wholly-owned subsidiary of Guangzhou Pharmaceutical Group.
1828 Wang Laoji declared on the official website that the "super ingredients" and "fresh flavor" possessed by the new herbal tea are because the raw materials provided by its supply chain are strictly selected in the world, and the quality, taste and freshness are strictly controlled, coupled with years of research and development, food safety risk control and other multi-dimensional experience, which is an important guarantee for brand development.
1828 Wang Laoji offline store franchise investment is still in progress, but in recent days encountered a number of franchisees backlash. In a 61-person franchisee WeChat group, a number of franchisees accused 1828 Wang Laoji of exaggerating publicity, false investment promotion, and refusing to fulfill investment promotion commitments, resulting in continuous losses for franchisees.
A number of 1828 Wang Laoji franchisees complained to the Times Weekly reporter that the 70% profit margin, store operation guidance, product development and brand promotion support promoted by the brand side in advance were not cashed. The Times Weekly reporter repeatedly called the relevant people of Guangzhou Pharmaceutical Group and Wang Laoji, but as of press time, there was no clear response.
Verbal promises of a profit margin of up to 70%
On August 26, Chen Jing (pseudonym) told the Times Weekly reporter that she joined 1828 Wang Laoji in 2020 and opened two offline stores in a prefecture-level city in Zhejiang.
Under the brand aura of Wang Laoji, Chen Jing only took 4 hours to decide to sign a contract to join. The two stores she runs are located in the city center, surrounded by strong enemies, and there are competitors such as Little Point, Gu Ming, and Mi Xue Ice City next to the store. Only one year after opening, Chen Jing invested more than 1 million yuan, but the operation was still unable to make ends meet, and finally had to choose to close the store.
Chen Jing's experience is not unique, and many other franchisees have complained about similar situations to the Times Weekly reporter in recent days.
Li Chao's (pseudonym) franchise store opened in the core business district of Zhuhai City, Guangdong Province. "The franchise fee was paid 160,000 yuan, and the cost of decoration and equipment purchase also cost 300,000 or 400,000 yuan, and the total investment was almost 600,000." Opened for more than three months, when the daily turnover was the lowest, it was only more than 400 yuan. Li Chao told the Times Weekly reporter.
He also revealed that another franchisee in Zhuhai has entered the local shopping mall, and the operation has not improved, and the deposit must be refunded when it expires. "The mall is expensive, and after nearly two years of business, the owner of the franchise store lost a house and a car." Li Chao said.
One of the reasons why Li Chao and Chen Jing decided to join was the verbal promise of the 1828 Wang Laoji brand merchants: the comprehensive cost of the brand franchise store only accounts for 30%-40% of the total revenue, and the profit margin of opening the store can be as high as 70%. In 1828, Wang Laoji and two investment workers also told the Times Weekly reporter that the profit margin of opening a store can be as high as 70%.
In actual operation, franchisees found that 70% of the profit margin could not be achieved at all. Li Chao said that every month, his store's monthly rent, water and electricity and labor costs totaled more than 35,000 yuan, and "the cost of materials alone accounted for 50%-60% of the total income."
The same goods, 1828 Wang Laoji franchisees to take the price is even higher than the dealer. "Wang Laoji's turtle paste sells for less than 100 yuan / box online, but our price is 111 yuan / box." Li Chao said that whether it is food raw materials or basic materials, they must be purchased from the brand side, such as private procurement, and they will be deducted if they are found.
"An ordinary bucket of disinfectant water, Taobao only needs 30 yuan, but the brand side quotes 280 yuan." A franchisee said. In Li Chao's view, franchisees have become the "leeks" of Wang Laoji in 1828.
Franchisees complain of false publicity
"It is not surprising that a franchisee loses money and goes out of business, dozens of franchisees are like this, is this still the fault of a single franchisee?" One franchisee was upset when he talked about it.
On August 26, a number of franchisees told the Times Weekly reporter that long-term losses have become the norm, and the brand side not only failed to fulfill its previous commitments, but also responded perfunctorily to franchisees. "The reason why franchisees continue to lose money is that the brand side does not operate with care." A Franchisee in Jiangmen, Guangdong Province, complained about 1828 Wang Laojido.
Recently, the Times Weekly reporter contacted the 1828 Wang Laoji investment staff in the name of joining. According to the other party, the 1828 Wang Laoji offline store is divided into direct operation mode and franchise model, and the franchise model is subdivided into two types: one is a single store franchise, there are three types of platinum stores, diamond stores, and flagship stores; the other is a regional agent, which is divided into provincial and municipal generations.
The investment staff told the Times Weekly reporter that the franchise prices of platinum stores, diamond stores and flagship stores ranged from 168,000 to 278,000 yuan, and a deposit of 20,000 yuan was also paid. The brand franchise fee includes 3 years of brand usage fees, equipment fees, and a series of guidance from store opening to operation (online and offline). There are three types of single stores, with differences in store size, product type, and operational services.
1828 Wang Laoji also said at the investment stage that the follow-up will vigorously promote the brand, ensure new product research and development, supply chain support, event planning, etc. The "1828 Wang Laoji 2021 Brand Planning and Action" provided by the franchisee to the Times Weekly reporter includes a variety of plans such as brand upgrading, star endorsement, digital marketing, and cross-border and IP cooperation, and star spokespeople include Huang Shengyi, Mao Xiaotong and other well-known artists, and cross-border cooperation also gives a time node.
On August 27, the Times Weekly reporter searched on the Internet, and there was no information that Huang Shengyi and Mao Xiaotong endorsed 1828 Wang Laoji, and the cross-border cooperation promised before August was not fulfilled.
"There is no advertising, and many people do not know this 1828 Wang Laoji brand." "Pinxuan can't keep up, and research and development can't top it." Many franchisees believe that the actual promotion situation is far from the investment manual. "This is a false investment." Li Chao said.
Lawyer: 1828 Wang Laoji may have been in breach of contract
Under the pressure of loss, some franchisees close their stores to stop losses, and some franchisees choose to terminate their contracts. "I can only sign a unilateral termination application and admit that I can't continue to operate the store due to my personal reasons, in order to get back a deposit of tens of thousands of yuan." A franchisee told the Times Weekly reporter.
In the 1828 Wang Laoji "Unilateral Termination Application" provided by him, the franchisee was required to guarantee that it would resolutely safeguard the Wang Laoji brand and voluntarily give up all the expenses incurred in the franchise contract.
"In 1828 Wang Laoji may have breached the contract." On August 27, Huang Zhiming, director of Guangdong Juntian Law Firm, analyzed to the Times Weekly reporter. He told the Times Weekly reporter that in addition to joining the signing contract, the investment policy provided by Wang Laoji in 1828, the 2021 brand planning and other contents can also be regarded as part of the contract under the condition of complying with the law. If 1828 Wang Laoji fails to cash in, the franchisee may require 1828 Wang Laoji to bear the contractual liability for breach of contract or compensation liability.
The Times Weekly reporter noted that in the contract of Wang Laoji's investment in 1828, there was also a company called "Guangzhou Totem Enterprise Management Co., Ltd." (hereinafter referred to as Guangzhou Totem). A franchisee's contract to the Times Weekly reporter shows that the intention to join the fee is collected by Guangzhou Totem.
Guangzhou Totem has Hu Fenglou, Ancient Pottery Tea Stack and other catering brands, the main business for brand planning, marketing promotion, investment and franchise and other chain franchise integration services, 1828 Wang Laoji is a cooperation project between Guangzhou Totem and Wang Laoji. According to Tianyan, Guangzhou Totem was established in January 2014 with a registered capital of 1 million yuan. Regarding the investment situation of the 1828 Wang Laoji brand, on August 27, the Times Weekly reporter called Guangzhou Totem, and the other side's staff did not give a substantive response.
Wang Laoji frequently lays out catering
Most franchisees look at wang laoji's brand awareness when signing the contract, and 1828 Wang laoji is indeed deeply tied to the Wang laoji brand.
In 2019, 1828 Wang Laoji upgraded the positioning of the original "freshly brewed herbal tea" to "herbal new tea", and the products covered fresh tea, milk tea, desserts and so on. In 2020, Zhang Xiaoqiang, then deputy general manager of 1828 Wang Laoji, said in an interview with the media that after 2 or 3 years of model precipitation, it is planned to make the scale of 1828 Wang Laoji stores reach 3,000-5,000.
Actual expansion progress is not promising. According to the content released by the official WeChat of 1828 Wang Laoji in January 2021, the number of 1828 Wang Laoji stores is only more than 80, distributed in Guangdong, Shanghai, Zhejiang, Jiangsu, Fujian and other places.
On August 27, a reporter from the Times Weekly searched on the Meituan app, located Shenzhen, Zhuhai, Haikou and other cities, and found that most of the 1828 Wang Laoji stores had been suspended. A franchised merchant who was randomly contacted also revealed to the Times Weekly reporter that the store had just opened for one year and was still in a state of loss.
In addition, Wang Laoji has also joined hands with american brand Fred Segal to launch Fred Segal Compound Cafe; in addition, there are hot halogen brand "Ji HalogenTang • Herbal Fresh Brine", hot pot ingredient brand "1828" Wang Laoji Xiaoji Pot Pie and so on.
"The consumer market where Wang Laoji herbal tea is located, the growth space has been relatively limited, which is a potential risk to the company, so it is necessary to develop new growth poles for business." Wang Laoji has a layout in a series of popular catering formats such as new tea, brine, coffee and so on, which is normal. On August 27, Zhang Yi, chief analyst of Ai Media Consulting, analyzed to the Times Weekly reporter.
The track that Wang Laoji cut into is already a red sea, and the competition is particularly fierce.
According to ai media consulting "China's new tea industry development status and consumption trend survey and analysis report in the first half of 2021", from 2018 to 2020, China's new tea brand stores expanded rapidly, the market has become saturated in the past two years, and the growth rate of tea stores in Heytea and Nesher is also declining.
The brine and coffee categories have become the new darlings of financing. In the first half of this year, well-known VCs such as Sequoia China and Today Capital have entered the halogen track; in the first seven months of this year, more than 10 coffee brands have announced new financing. "Wang Laoji is an old brand, but the advantages of entering the catering are not obvious. Wang Laoji's layout of catering must set up an industry threshold in terms of service or brand in order to quickly seize the market. Zhang Yi analyzed.