Editor's note: Towards the first year of opening up the joint venture, Hefu pressed the button to speed up and expand.
Before the arrival of 2024, Hefu Lao Mian has a new look.
On December 22, in Rugao, Jiangsu, Li Xuelin, the founder of Hefu Lao Mian, officially disclosed brand 20 upgrade plan, in short, the upgrading of Hefu Lao Mian products will focus on "health, green, and inclusive", with further broadening, layering, highlighting the quality and cost performance, and putting forward the strategic direction of "finding friends, sinking, going to sea, and deep layout".
The aforementioned statement of the Chinese noodle restaurant chain brand looks ambitious, and a series of important business actions have also been revealed. The core is reflected in the store side, and the brands of Hefu Lao Mian are expected to accelerate their expansion in an all-round way, open up the joint venture partner model, and maintain their original intention on the basis of the current 500+ directly operated stores, open the next decade, and move towards the long-term goal of 20,000 stores.
Behind the strong growth expectation, the upcoming 2024 has a special milestone significance for Hefu Lao Mian. Previously, in 2013, Hefu Lao Mian opened its first store in Rugao, Jiangsu, and as of the first ten years of 2023, they updated the number of stores to 500+. This may not be a staggering number, but it is worth noting that they are direct sales and are high-potential stores in high-tier cities.
500+ stores are obviously not only a numerical result, the first decade, is the 1 of the Hefu Lao Noodle brandAt stage 0, they used the "study to nourish their hearts" and redid the traditional business of noodle restaurants. Among them, it includes the creation of a new model of "slow life" noodle restaurant, a digital model of stores with a base of 2000+ million members, and a complete set of high-standard chain and product system in the industry.
The development achievements of Hefu Lao Mian have been fully recognized by the market. According to the latest data from the "Blue Book of China's Noodle Industry" released by Sullivan, a world-renowned growth consulting company, as of September 2023, in the domestic noodle market, Hefu Lao Mian is the first in direct revenue, and the growth rate of direct revenue and the number of directly operated stores are both leading the industry, ranking first in Chinese noodle restaurants.
In ten years, a bowl of Chinese-style health noodles and Fulao noodles have quietly grown into a Chinese-style casual fast food faucet. At the beginning of the new decade, Hefu Lao Mian hopes to move faster and take 2024 as the "first year of opening up joint ventures". This also means that, compared to the previous 10 stage of the direct sales model, and Fu Lao noodles will be in 2At stage 0, the first chain and brand management system were officially opened to the society.
Certainty for 10,000 stores
20,000 stores is not a simple slogan, but a definite opportunity for growth.
Different from the common street fast food noodle restaurants, Hefu Lao Mian is a remake of the noodle restaurant in the way of casual fast food. "Fast food solves the problem of being full, and casual fast food solves the problem of quality justification," Li Xuelin told 36 Krypton, maybe 50%-60% of people eat noodles to be full, but there are also some people who "eat well while being full".
In China's casual fast food market, KFC and McDonald's are quite prominent representatives, with a total of nearly 20,000 stores, and the product is about 30-35 yuan, and the aforementioned brands are still expanding, and the new decade is exploring the second 10,000 stores. From the perspective of the overall industry, the 35 yuan ** belt and 20,000+ stores have been verified. Hefu quality has been adhered to for ten years, and now the quality of the first exploration is not reduced, and there is a trend of 10,000 stores.
In fact, the market base of Chinese casual fast food to which Hefu Lao Mian belongs is much larger than that of Western casual fast food. According to Sullivan's relevant statistics, Chinese fast food has long accounted for about 70% of the entire fast food market. In terms of taste habits, the frequency of noodles is much greater than that of hamburgers, but the chaining rate of the former is still in the early stage, and the branding potential is huge. In addition, for different market formats, Hefu Lao Mian will also be flexibly configured in a multi-store model, such as the transportation hub version, the Sichuan-Chongqing regional version, etc.
The reason why it was able to run out successfully is that Hefu Lao Mian has also stepped on the first window period of the chain of the Chinese restaurant industry. According to relevant statistics, in the past decade, China's fast food chain rate has nearly doubled. With the help of consumption upgrades, digital capabilities, and innovative channel development opportunities such as takeaway and live broadcasting, a large number of new catering brand forces have been born.
In the face of the opportunities of the times, Hefu Lao Mian chose to take a more difficult road.
Western-style fast food, represented by KFC and McDonald's, has built a Western-style fast food industry chain with chicken and hamburger as the core at the same time, paving the way for latecomers. As for the Chinese-style quality noodle restaurant business done by Hefu Lao Mian, many of the industrial chain was still blank at that time, and everything needed to be established from scratch. In addition, compared with the uneven catering franchise, the direct sales model adopted by Hefu Lao Mian is more difficult to expand, and it also puts forward extremely high requirements for the talent system, operational efficiency and first-chain capabilities.
Hefu Lao Mian can run faster. They have always been favored by the capital market, and in 2021, when they raised Series E, they won the largest single financing amount for a noodle restaurant that year, and this still rejected the premise of more expensive investment. A widely circulated story in investment circles is that the founder Li Xuelin finally chose a valuation of 7 billion yuan instead of an investment of 14 billion yuan, in his words, "People should know themselves, look in the mirror, and squeeze water." It's yours and yours, don't be greedy, choose the right one, not the expensive one."
At that time, the financing boom of Chinese food was at its peak, and the noodle restaurant category was also heavily bet on by capital, and the valuation level of "100 million yuan per store" was often used. And this choice of Hefu Lao Mian made them look more like an outlier at the time. However, this calm decision was soon verified to be forward-looking, and then in 2022, catering investment and financing cooled down in an instant, coupled with the impact of the epidemic, some catering brands that were crazy to expand with a halo of high valuations quickly declined or even collapsed in an instant.
People must be self-aware, and they must know how to refuse when they are faced with **. The right one is the best, but the right scale must be known. Talking about this decision at that time, Li Xuelin told 36Kr that Hefu Lao Mian may do better than ordinary brands, but if you look at it according to the standards of the world's top brand companies, Hefu is actually far behind.
This judgment stems from Li Xuelin's cautious optimism. He told 36 Krypton that in the process of brand development, it is inevitable to experience "a lot of uncertainties" such as economic cycles, policy changes, brand aging, and channel changes. Entrepreneurs need to take into account uncertainties and anticipate solutions.
You already knew what a black swan looked like, and you weren't afraid when you came, because you had already thought of 100 solutions in your heart. Li Xuelin told 36Kr that when he encounters major problems, he will consider them from two perspectives: first, he has never looked at what should be done today that will have an impact on the future? Are today's difficulties fatal to the future? Second, from the perspective of a third party, whether the issue is a fair judgment made without interest.
This kind of "precaution" is necessary compared to the blind optimism of some practitioners, and the harsh reality is that despite the continued prosperity of the restaurant industry, the mortality rate is not low. Li Xuelin realized early on that "the most difficult thing in catering is sustainability." "And as early as 8-10 years ago, I knew that the black swan would always come this day.
Li Xuelin emphasized to 36Kr that Hefu Lao Mian used to follow the trend, that is, the wave of consumption upgrading, "At the beginning, I didn't think it was so big, and I felt very happy to open hundreds of stores." He told 36Kr that now Hefu Lao Mian is also replanning a new development direction, and has set a longer-term goal, "to be a global, inclusive boutique service brand", to serve more Chinese people, so that every street in the world has a Chinese taste. In his view, this is a "responsible transformation".
Spend your money where it counts
"10,000 store model" is the annual hot word of the catering industry this year, corresponding to the industry development model of large-scale, large-scale single product and efficient operation. Although there are not a few catering brands that shout the slogan of 10,000 stores, judging from the results, "10,000 stores" is not an absolute barrier, and there is even no shortage of similar head brands.
Growth must be logical, the result of planning, not the result of brutal growth. Li Xuelin told 36Kr that the core of the out-of-control expansion problem is the lack of product innovation ability and personnel control.
The catering industry is a typical labor-intensive industry, and the mobility of personnel is large, in the process of scale, how to manage personnel, standardized output of products and services, is a thorny problem that most catering enterprises have always faced.
In 1During the 0 development period, Hefu Lao Mian chose to focus on the line of sight and create a high-standard store type around the high-potential energy scenes of transportation hubs and shopping malls. One of the key issues is to reduce dependence on people, and many years ago we achieved "controllable scale".
For Hefu, opening 1,000 stores a year is the same as opening 100 stores," Li Xuelin told 36Kr, and now Hefu Lao Mian has a wealth of functional modules and a powerful automated business system, "We want a small number of people to design the system, and most people implement the system, rather than the system depends on everyone." ”
For example, according to different seasons, stores need to establish a set of temperature management mechanisms, and Hefu has realized the networking of store equipment, and the headquarters uniformly controls temperature and humidity. In addition, the background, problem early warning, goods and equipment and energy consumption systems are all realized by the visual management of the headquarters, store staff control and training, and many business decisions, which are also completed by system automation.
Back in. Four or five years ago, everything from ordering to scheduling to daily management was basically done automatically by the system," Li Xuelin stressed to 36Kr, adding that Hefu has always regarded itself as a retail company, "making a restaurant like a convenience store." ”
This series of investment began on the first day of opening the store, and has never stopped, and now the relevant investment is "tens of millions of yuan" every year. It's a cost-effective investment to set up a flexible organization and an efficient automation system. Because of this, the human efficiency of Hefu Lao Mian is up to 80,000 yuan, which is a level only available in some high-end Japanese restaurants.
It is worth mentioning that this investment is based on the healthy cash flow of Hefu Lao Mein. It is reported that except for the epidemic period, Hefu Lao Mian has maintained a positive cash flow, "the funds are very safe and sufficient," Li Xuelin told 36Kr at the same time, but Hefu is open to capital cooperation with industrial resources.
The "generous investment" of Hefu Lao Mian is also reflected in the employee incentive level. "Hefu is not a very stingy company, the premise is to think big", Li Xuelin told 36 Krypton, and Hefu's money and profits have maintained the top level in the industry.
In the Chinese food market, Haidilao's mentorship system and process assessment are a model of industry innovation in the incentive mechanism, and help solve the problem of store service outside the first chain. Li Xuelin said that he admires Daniel Zhang's big brother and is grateful to his team, "We also have a group of like-minded employees to complete their mission, and the government will give enough freedom to the capable soldiers."
It is reported that the latest organizational structure of Hefu is divided according to the type of channel, and the regional team not only operates regional Hefu stores, but also operates acquired and incubated sub-brands to carry out regional multi-brand management. Li Xuelin emphasized that the premise of supporting this is that the business of each restaurant in Hefu has been extremely simple and systematic, "a person in an area can take root like a nail." ”
In the past ten years, Hefu Lao Mian has established a modern food industrial park of nearly 100,000 square meters, and built one of the largest first-class kitchens in the country, which can support the basic operation of thousands of stores and the cold chain distribution needs of the whole country. Before the announcement of the new expansion target, Hefu Lao Mian had already laid out at the top of the chain, and announced at the beginning of this year that it would continue to invest in the construction of four major base centers for production, research and development, logistics and management.
A series of investments have enabled Hefu Lao Mian to create a very high organizational efficiency and resource integration and mobilization capabilities. While it takes about one year to renovate the menu of a traditional Western-style fast food brand, it takes about 20 days to simplify the menu. As a store proof, Rugao's first store completed the "miracle" from dismantling to redecoration and opening within 7 days, while the industry usually takes almost 45 days.
If there are 1,000 stores in Hefu, there will be nothing, but if you want to open 10,000 stores in China, the previous road may not work," Li Xuelin told 36 Krypton, and this road must be built very wide. In the future, Hefu will realize three-legged walking, namely catering, retail, and ** chain.
Open the battle with "altruism".
In the fast food industry, Hefu Lao Mian has always been a low-key existence, but it does not prevent the industry from paying high attention to and affirming them. There are senior practitioners of fast food, and they even evaluate Hefu Lao Mian as the "ceiling of the fast food industry".
The high quality of the noodles and service is what distinguishes them from most noodle restaurants. It is worth mentioning that Hefu Lao Mian also released the store flight inspection report on the official website, and random inspections were carried out every month, and this matter has been done for many years.
We want to give consumers more trust, as a leading enterprise, must have social responsibility and long-term mission. Li Xuelin said that food safety is the bottom line, not the standard for top students. The reason why "Alan Family", a sub-brand of Hefu Lao Mian that focuses on beef noodles, is positioned hygienic and clean is also because the hygiene of many small and medium-sized restaurants is not trusted by consumers, "Even if a bowl of noodles costs more than ten yuan, everyone can eat enough, but it can't be dirty." ”
It is reported that Hefu Lao Mian has also participated in and promoted the construction of various catering industry standards, and has formed 70 special food safety inspection processes, 24 sets of food safety management systems, and more than 200 food inspection and inspection standards within the enterprise, among which the relevant standards for raw and wet noodles are at the top level of the industry.
In terms of positioning, 30-35 yuan is not low in fast food. **Belt widening is a necessary step for Hefu to take from 500+ stores to 20,000 stores. It is reported that at present, about 40% of the products of Hefu Lao Mian are sold at less than 30 yuan, and they plan to further increase this proportion in the future.
But Hefu Lao Mian does not intend to compete at low prices, "Hefu will never fight with anyone in the extremely low ** war," Li Xuelin told 36 Krypton, and Hefu must be a high-quality service brand, and at the same time let more people enjoy inclusive benefits. In his view, there are different consumer groups at any time, even if the consumption level changes, people's pursuit of quality is still on the rise.
Therefore, Hefu Lao Mian launched a crab roe noodle priced at 108 yuan at the same time as the ** downward trend. This product is priced based on cost, but the core of its birth is based on user demand insights. When some business users receive customers at noon, they don't have time to eat the main meal, and the general fast food feels that it is not suitable, and what they need is a clean food, high-quality casual fast food.
High-quality ingredients are not difficult to achieve, but it is obviously a very challenging thing to ensure products and services at the same time in the lower ** segment, and it is also related to the cost of city level, store rent, labor and so on. "For the same 20 yuan, who wouldn't want to eat better? Li Xuelin said that basically all kinds of pasta consumption needs can be found in Hefu with a more comfortable ** belt, but "it must not be achieved by sacrificing quality." ”
The upcoming year 2024 is the first year of the joint venture with Hefu Lao Mian, but this matter is not a temporary decision, on the contrary, they have been preparing for this for a long time, although as early as the opening of the first store, Hefu Lao Mian has accumulated thousands of application materials for interested partners in just a few months. Nowadays, back-office accounts receive a large number of affiliate inquiries every month.
The reason why it has not been officially opened up is that it may be worried that it will not be able to protect the interests of partners, "Any partner, if the operation fails, may be in debt for life, and you must be responsible for the investment behavior of others." Li Xuelin told 36Kr that many practitioners are prone to overestimate their abilities and underestimate the challenges of the market, and many mistakes have no chance of retraction and correction.
Hefu Lao Mian hopes to achieve controllable growth by making high-quality, high-quality joint ventures, rather than "cutting leeks", which is widely criticized in the industry, and for this they have been preparing for this since five years. It is reported that Hefu Lao Mian has cooperated with some joint venture partners in Hainan and Shanghai in a small amount, and the results show that the return cycle of cooperation is very short, and some partners give strong trust, financial full trusteeship, and even "I don't know that the store is in the first place, so I decided to open it first." ”
However, in the first phase of opening up the joint venture, Hefu Lao Mian still chooses to be cautious and focuses on the form of "cooperation with stores".
Li Xuelin told 36Kr that Hefu's strength lies in high human efficiency and high ping efficiency, the efficiency of store cooperative development is relatively low, and the performance period of the commercial real estate market is relatively short, only 3-5 years, and they hope to "solve this social problem through market-oriented means." "For the partners, the main thing is to solve the problems of stores and funds, coupled with the control system and operational capabilities of Hefu and the subsidy mechanism, which can basically ensure the high success rate of the project.
At the same time, Hefu is trying to solve the problem of operating costs and the controllability of input costs, "now a store may invest about 800,000 to 1 million," Li Xuelin said, and Hefu Lao Mian next hopes to lower the threshold of joint ventures and compress hard investment funds to less than 900,000 yuan.
Aiming at the quality-to-price ratio of the Chinese noodle restaurant model, behind the goal of 10,000 stores, Hefu Lao Mian hopes to use social resources to jointly expand China's noodle industry chain. "For a company to be successful, there must be a lot of people who want you to succeed. Li Xuelin told 36Kr that in the past, Hefu hoped to slowly expand the market, but if it wants to be bigger, it must become a social company in order to generate greater impetus.