Haidilao Hotpot Introduces Franchise Model

Haidilao, a popular Chinese hotpot chain operator, is expanding its store network through a new restaurant franchise model. The company will carefully select franchisees based on factors such as brand recognition, experience, and financial stability. By maintaining unified operational and quality standards across all stores, Haidilao aims to ensure a consistent customer experience.

Franchisees will receive support from Haidilao in areas such as personnel training, supply chain systems, and marketing services. The company believes that introducing franchising at this time will help facilitate moderate expansion and enhance its market presence. Haidilao has established a dedicated franchise division to oversee these operations.

Analysts view the move towards franchising as a way for Haidilao to expand quickly while minimizing asset-heavy investments. However, they caution that proper management is essential to maintain the brand’s reputation and consumer trust.

Despite reporting a significant net loss in 2021, Haidilao is expected to have seen a substantial increase in net profit and revenue in the past year. With 1,382 stores in operation as of June 2022, the company remains a key player in the Chinese catering industry.

In addition to Haidilao, other brands under Jiumaojiu International Holdings have also adopted the franchise business model. This approach is seen as a way to tap into China’s expanding foodservice market, which still has significant room for growth compared to the US.

Overall, Haidilao’s foray into franchising represents a strategic move to accelerate growth and increase its market share. By maintaining strict standards and providing support to franchisees, the company aims to continue delighting customers with its popular hotpot offerings.

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