Haidilao
If you are a Daniel Zhang, the entrepreneurship has achieved initial success, but at this time you find that the management ability of partner Shi Yonghong has not been able to keep up with the development of the company, but you do not have absolute controlling rights, what will you do? Forcefully depriving him of his equity and kicking him out again? The result of this is most likely to be a lose-lose situation.
Text/Yi Liu
Regarding the entrepreneurial history of Haidilao, there is a story circulating on the Internet Daniel Zhang "iron fist grabbing equity".
In 2007, when Haidilao was preparing to go public, the financial adviser at the time suggested that the company had an absolute controlling shareholder, which was conducive to listing.
As a result, Daniel Zhang "bought" 18% of the equity from Shi Yonghong and his wife at the price of 1,000 yuan of the original capital contribution.
Why 18%? Because Daniel Zhang husband and wife already own 50% of the equity, plus 18% is 68%, and they have absolute control.
Haidilao Daniel Zhang
In 2007, the 13-year-old Haidilao was already the top catering brand in China.
This can be illustrated from the side.
In 2009, "Haidilao's Management Wisdom" written by Professor Huang Tieying of Peking University's Guanghua School of Management became the Chinese edition of the Harvard Business Review, and it has been the most influential case in China in eight years, and since then, almost all business schools in China have begun to teach Haidilao. Two years later, "Haidilao You Can't Learn" was officially published.
According to the brand value and financial data at that time, 18% of the equity, the valuation of at least hundreds of millions, but at a symbolic price of 1,000 yuan was transferred.
One dares to ask and one is willing to give, both need courage and wisdom, and even more need a big pattern.
If you are Daniel Zhang, you may not have such a thick skin. If not, you won't be able to make Haidilao more brilliant.
If you are Shi Yonghong, you may not be able to give up such a big benefit easily. And if you are not willing to give up, Haidilao may sink in the sea.
The result of this is most likely to be a lose-lose situation. After all, having a partner in Shi Yonghong's pattern is too rare.
Is there a safer way? Perhaps we can find the answer from the later stories of Haidilao Daniel Zhang and Shi Yonghong.
Here we first introduce a company, Yihai International Holdings Co., Ltd., the exclusive substrate supplier of Haidilao, which has the exclusive and permanent free use of the haidilao trademark franchise, and the products can be sold to third parties.
Yihai International was originally established in 2005, specializing in the production of hot pot base, located in the upstream of Haidilao, and Haidilao is a prosperous relationship.
Yihai International is currently listed in Hong Kong, with Daniel Zhang husband and wife owning 35.59% of the equity, and Shi Yonghong and his wife owning 16.94% of the equity. This is the equity structure of Yihai International after its listing in 2016, and it is not clear as to the equity structure of 2005 and 2007 and before the listing.
However, as a "subsidiary" of Haidilao at that time, it can basically be determined that Daniel Zhang and Shi Yonghong each own 50% of the equity.
Haidilao has many affiliates, and here are only Yihai International.
Let's take stock of Shi Yonghong's resume.
Shi Yonghong
From 1994 to 2001, he served as the deputy general manager of Haidilao. It is still in the sub-center of haidilao's rights.
From 2001 to 2009, he served as a supervisor of Haidilao. Basically, the stake sale took place in 2007.
As a director of Haidilao since July 2009, we can understand that rights have begun to return.
Shi Yonghong has been a director of Yihai International since December 2015, a non-executive director in March 2016, the chairman of the board of directors of Yihai International on November 14, 2017, and a year later as the CEO.
The current market value of Yihai International is about HK$50 billion, and Haidilao is about HK$130 billion.
Now, let's go back to 2007, if Shi Yonghong is not willing to transfer the equity, what else can Daniel Zhang do? Does he have a plan b?
If there is, perhaps it looks like this:
Daniel Zhang husband and wife own 68% of the shares of Haidilao, and Daniel Zhang serve as chairman and general manager of Haidilao.
Mr. and Mrs. Shi Yonghong can own 68% of the equity of Yihai International, and Shi Yonghong serves as chairman and CEO.
Each side is in charge of a company and holds shares in each other, which will make the cooperation more stable.
Such "equivalent exchanges" may be more fair, reasonable, more in line with human nature, and easier to achieve.
Shi Yonghong was willing to give up at that time, and the good results today are indeed commendable, but what if the ending is not so beautiful?
What would you do if your partner asked you to be the second Shi Yonghong?
I'm a Liu, follow me and unlock more passwords.