Spicy hot is not unfamiliar to the majority of consumers, belongs to the hot pot products, originated in Sichuan, but grew and prospered in the northeast.
According to Tianyancha data, as of September 2021, the number of spicy scalding-related enterprises in mainland China exceeded 170,000; of which about 21,000 in Jilin Province ranked first, and 16,000 in Heilongjiang Province ranked second.
It is worth mentioning that In Bin County, Harbin, which is known as the "hometown of spicy hot", there are more than 330 spicy hot related enterprises. It is also the birthplace of the two giants of spicy scalding, Yang Guofu spicy hot and Zhang Liang spicy hot.
Red Star Capital Bureau noted that the China Securities Regulatory Commission recently disclosed that "Yang Guofu Spicy Hot" has submitted an application to the CSRC. This means that once it is accepted, Yang Guofu Spicy Hot will soon be able to submit a prospectus on the Hong Kong Stock Exchange and is expected to become the "first hot stock".
In the 19 years since its establishment, Yang Guofu has gone from Harbin to the whole country, from small workshops to capital, with more than 6,000 stores. However, behind the rapid expansion of the franchise model, Yang Guofu's spicy scalding has been repeatedly exposed to food safety problems, hiding many hidden dangers. For the chain catering business with a low threshold and a relatively single profit model, can Yang Guofu tell some new stories?
Founded for 19 years, it has moved from the northeast to the whole country
Its stores have exceeded 6,000
Yang Guofu was born in Harbin, and in 2000, Yang Guofu was still selling porridge and small dishes at a roadside stall in Harbin. This year, he accidentally found that there was a spicy hot stall opened by Sichuan people in Harbin, so he became interested in the spicy hot business.
After more than two years of observation and research, in 2003, Yang Guofu opened a shop in Harbin called "Yang Ji Spicy Hot", which is also the predecessor of Yang Guofu Spicy Hot.
Yang Guofu made great adjustments and innovations to the taste of spicy hot, he did not choose the red oil soup base used in the traditional Sichuan spicy taste, "Yang Ji spicy hot" soup pot is boiled from bone broth, and milk and sugar are added to the soup, and the soup base is milky white - this spicy hot soup that can drink soup is also more suitable for northeast consumers who do not like to eat spicy.
Due to the taste of the people in the northeast, the high quality and low price, to meet the demand for fast food, Yang Guofu's spicy hot shop business is hot, his relatives and friends have also joined, within two years the number of stores opened to 70, but also achieved the brand's initial "barbaric expansion".
In 2007, Yang Guofu registered his name as a brand name and officially established the company. After that, Yang Guofu began to use the franchise model to quickly run a race in the national market.
In 2008, Yang Guofu spicy hot went out of Heilongjiang and opened franchise stores to Inner Mongolia; in 2009, the number of Yang Guofu spicy hot franchise stores exceeded 900; in 2010, the total number of franchise stores exceeded 1,000, covering the three eastern provinces, Inner Mongolia, Hebei Province, Beijing, Tianjin and other regions; in 2017, Yang Guofu's spicy hot franchise stores have exceeded 5,000, and spicy hot has also changed from regional snacks to national cuisine.
In addition, since 2017, Yang Guofu spicy hot has expanded overseas. Up to now, Yang Guofu spicy hot has covered the market to canada, Australia, Japan, South Korea and Singapore and other five countries.
Source: Yang Guofu spicy hot official website
At present, Yang Guofu spicy hot has more than 6,000 stores around the world (most of which are in China). Of course, the company's ambitions are far more than this, Yang Guofu has previously proposed a plan for the company's five-year development: the number of domestic stores will increase to 9,000 in 2025, and the overall revenue of the group will reach 10 billion yuan.
The main revenue comes from "harvest" franchisees
Entering self-heating food looking for a second growth curve
Regarding the revenue structure of Yang Guofu's spicy hot, according to public information, Yang Guofu said in 2019: The company's revenue is expected to be 1.3 billion yuan in that year, of which the franchise fee accounts for 20%, and most of the income comes from the business module, such as the sale of seasonings, ingredients, kitchen equipment, restaurant furniture and so on to franchisees.
First of all, look at the franchise fee income, according to yang Guofu merchants to join the official WeChat public account, the current latest franchise fee is: the first-tier cities in the north, Shanghai, Guangzhou, and Shenzhen are 27900 yuan / year, other prefecture-level cities and municipalities directly under the central government are 23900 yuan / year, and the township and county-level cities are 19900 yuan / year; in addition, 10,000-30,000 yuan of brand deposits are also charged.
Source: Yang Guofu merchants joined the official WeChat public account
The franchise fee is indeed only a small part of the company's revenue, and Yang Guofu's spicy hot more income also comes from the sale of seasonings and kitchen equipment and restaurant furniture to franchisees.
In 2018, Yang Guofu Spicy Hot Spent 400 Million Yuan to build a self-built R&D factory, and the main task of the R&D center was to produce the spicy hot base and seasonings required by Yang Guofu Spicy Hot Shop.
In contrast to competitor Zhang Liang Spicy Hot, Zhang Liang Spicy Hot has not established a complete supply chain system, and most of the bases and seasonings are purchased from external suppliers.
According to public data, compared with Yang Guofu's revenue of 1.3 billion yuan in 2019, Zhang Liang's spicy hot revenue in the same year was only 60 million yuan (Zhang Liang's spicy hot and Yang Guofu's spicy hot stores are comparable). The revenue gap between the two is so large, in addition to the fact that Zhang Liang's spicy hot franchise fee itself is lower than Yang Guofu's spicy hot, the main reason is that the external raw materials have reduced the profit margin of Zhang Liang's spicy hot.
Source: 36Kr, the company's official website
In addition, Yang Guofu's spicy scalding for franchisees to provide kitchen equipment, restaurant furniture is also a lot of income. According to the "Finance and Economics World" weekly, a franchisee of Yang Guofu spicy hot said: to join Yang Guofu spicy hot, in the early stage of the store investment needs 400,000, of which various equipment is a lot of expenditure, take the display cabinet, Yang Guofu's price is more than twice as expensive as the same manufacturer, the same model, a store requirements must be standard with two.
In addition to relying on franchisees to obtain various incomes, at the beginning of 2021, the official flagship store of Tmall Yang Guofu was officially launched, and the main products include self-heating hot pot and hot pot base. Yang Guofu's spicy hot pot launch of hot pot base and self-heating products is obviously also trying to broaden its own revenue structure.
Source: Screenshot of Tmall Yang Guofu's official flagship store
Overall, as a hot pot-like snack fast food, Yang Guofu spicy hot sauce has rapidly moved from the northeast to the whole country through the universal taste and franchise model, and has also obtained large profits through franchisees.
It is worth mentioning that although Yang Guofu spicy scalding already has supply chain advantages, most of the vegetables, frozen products and other products other than base materials and condiments are still self-collected by stores, so they have not been able to achieve unified distribution of raw materials, and it is still difficult to fully standardize. And now Yang Guofu spicy hot try to take the road of e-commerce, in the face of Haidilao, zi hi pot and other industry competitors, Yang Guofu spicy hot can find the second growth curve of the enterprise, it remains to be seen.
Food safety issues are frequently exposed
There are hidden dangers behind rapid expansion
Generally speaking, the franchise model can enable enterprises to achieve rapid expansion of asset-light; but at the same time, the rapid influx of franchisees has also made enterprises fall into the predicament of food safety-related problems due to difficult quality control. Yang Guofu's spicy scalding has also been exposed to food safety-related problems many times before and has even been named by regulators.
In 2018, a spicy employee of Yang Guofu in Guangzhou sat on a high stool to cut meat, his feet on the board, and his feet were full of garbage such as meat residue. After the video was exposed, it triggered extensive discussion among netizens, after which the person in charge of the store admitted that the video did occur in his own store, but said that the male employee was a temporary worker, and the store would strengthen management in the future.
In July 2021, a video blogger secretly visited Yang Guofu and found that the ingredients in the warehouse continued to be used after being bitten by rats, the kitchen rag was washed both vegetables and shoes, and the pig lungs were not cleaned and boiled directly. Soon, Yang Guofu spicy hot Weibo issued an apology statement, saying that the company recently paid attention to the reports on the food safety problems of individual franchise stores on the Internet and set up a project team to investigate.
On December 11, 2021, the Beijing Municipal Consumers Association sorted out the list of enterprises with food safety problems in response to the recent food safety problem notice issued by the municipal and district market supervision bureaus, and Yang Guofu was spicy and hot because of food safety problems in stores.
In addition, the black cat complaint shows that most of Yang Guofu's spicy and hot consumer complaints are also related to food safety and other issues.
Source: Black Cat Complaint
In the face of stores being exposed, named, and complained, Yang Guofu needs to "carry the pot" for franchisees, which is also the imbalance between the company's eager franchise expansion and the ability to control franchisees.
Why is the food safety problem more critical to today's Yang Guofu spicy scalding: on the one hand, food safety is the life and death line of the catering industry, if Yang Guofu spicy scalding is successfully listed, such related events will have a greater chain reaction on the enterprise; on the other hand, the spicy scalding itself is low, it is difficult to build technical barriers or corporate moats, And Yang Guofu's only sharp weapon is pinned on word of mouth.
After nearly 20 years, Yang Guofu's spicy scalding has gone from Harbin to the whole country, from small workshops to capital. However, for this kind of chain catering business with low threshold, single profit model and greater operating risk, whether Yang Guofu spicy hot can tell some new stories may be the most concerned by capital.
Red Star Capital Bureau will also continue to follow up on the listing progress of Yang Guofu's spicy hot sauce.
Red Star News reporter Yu Yao Liu Mi
Edited by Yu Dongmei
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