Summary of Key Points
This report directly debunks the sensational headlines claiming that Zhang Junjie, the founder of Bawang Cha Ji, has been removed from his position and lost power, revealing the true nature of the corporate changes: it was not a case of the founder fleeing or internal strife within the company. Instead, it was a strategic decision made at a critical turning point after Bawang Cha Ji went public. Zhang Junjie has only stepped down from his role as the legal representative of the domestic operations, but he still retains 100% control over the decision-making of the NASDAQ-listed company. The adjustment essentially represents a clear separation of responsibilities. The era of success stories about a “stray youth who turned into a company owner” and the rapid expansion through franchise models has come to an end. Now, Zhang Junjie is focusing on the overseas markets, where growth rates exceed 100%, while delegating the day-to-day management of the more than 7,000 domestic stores and coordinating interests with franchisees to the experienced professional manager Yin Dengfeng.
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Detailed Analysis
1. Don’t be fooled by the “resignation” headlines: Zhang Junjie hasn’t left; he’s just handed over the mundane tasks
Many people initially thought that Bawang Cha Ji was about to change significantly, with the founder being ousted. However, this change only affects the domestic operations of a subsidiary company. Zhang Junjie remains the chairman and CEO of the NASDAQ-listed company, holding 88% of the voting rights in the company’s shares—meaning his opinion carries significant weight. There’s no possibility of him being sidelined or losing power. The company’s statement that this change has “nothing to do with the business structure” is partly true: it doesn’t affect the highest-level governance structure, but it does involve a reorganization of tasks. It’s like running a chain supermarket where you’re still the boss, but you’ve entrusted the day-to-day management, procurement, and franchise coordination to a general manager, freeing you to focus on the overseas markets.
2. The inspiring story of Zhang Junjie’s rise from a stray youth is no longer a selling point
In the past, Zhang Junjie’s story of growing from a street vendor to a company owner without formal education was a valuable asset that helped Bawang Cha Ji gain momentum. However, now that the company has gone public, this narrative no longer resonates with investors or consumers. The capital market is more interested in financial performance, such as sales figures and growth potential. The founder’s background has become a potential liability, raising doubts about his ability to manage a large company with thousands of stores.
3. The franchise model is no longer profitable
The franchise model, which used to be highly profitable, has become unsustainable. With over 7,600 stores nationwide, competition has intensified, leading to declining average monthly sales and a 16% decrease in same-store sales. Franchisees are no longer making money, and the company’s revenue has halved in 2025, with a loss of over 35 million in the fourth quarter. To overcome these challenges, Bawang Cha Ji has changed its profit-sharing model from relying on the price difference of raw materials to splitting profits with franchisees and has expanded its direct-operated stores from 200 to 800.
4. Hiring a professional manager to handle domestic affairs
Yin Dengfeng, the new director of domestic operations, is not a newcomer. He joined Bawang Cha Ji in 2019 and has gradually risen through the ranks, holding multiple positions, including COO and China CEO. He is the ideal person to take charge of the domestic operations due to his experience and expertise. With so many stores and franchisees, managing everything manually is impossible for even a capable founder. This shift reflects a shift from a growth-driven strategy to one focused on maintaining and expanding the domestic market while exploring new overseas opportunities.
5. Zhang Junjie’s “retirement” is not a sign of laziness; he’s preparing for the next growth phase
Zhang Junjie’s departure is not about retirement but about shifting his focus to the overseas market, which represents the next key growth area for Bawang Cha Ji. While the domestic tea drink market is highly competitive, the overseas market offers untapped potential. With a 100% annual growth rate, Zhang Junjie is taking the lead in developing this new narrative and ensuring the company’s success overseas.