Summary of Key Points
Meiyijia has been directly approached by the State Administration for Market Regulation regarding issues such as the sale of expired food and counterfeit cigarettes at its stores across multiple locations. This time, the regulator is not holding the franchisees accountable, but rather emphasizing that Meiyijia's headquarters must take primary responsibility for food safety. The administration has required Meiyijia to establish a comprehensive risk management system that covers the entire chain from the headquarters to the individual stores. This situation reflects the challenges of Meiyijia's rapid expansion (40,000 stores) and its inadequate control mechanisms: low entry barriers for franchising and nearly zero profit sharing for the headquarters have led to a lack of motivation and capability to effectively manage the stores, rendering previous attempts to shift blame to the franchisees ineffective.
1. The Importance of This Meeting: Direct Condemnation of the Headquarters
In the past, when problems occurred at Meiyijia, the headquarters would blame the franchisees, claiming that the issues were the result of individual store owners' actions. However, this time, the regulatory authorities have targeted the person in charge of Meiyijia Holdings Co., Ltd., not a specific store or regional branch. This meeting serves as a clear warning, indicating that the headquarters cannot avoid responsibility for food safety.
Why is the regulation focusing on the headquarters? The issues are not isolated mistakes by individual stores; for instance, all ten Meiyijia stores involved in the counterfeit cigarette incident sold fake cigarettes, and expired food was found at multiple locations. This indicates flaws in the headquarters' management system, which are not the fault of the store owners alone.
2. A Long History of Problems
Meiyijia's negative news is not a sudden occurrence:
- March Counterfeit Cigarette Incident: During the Guangdong "315" event, reporters found counterfeit cigarettes at ten Meiyijia stores in Guangzhou, Foshan, and Dongguan, which were identified as having higher carcinogenic risks.
- April Expired Food Incident: A consumer in Hefei bought expired spicy snacks that caused diarrhea; another consumer in Quanzhou bought an expired beverage and was cursed by the store manager when seeking compensation, receiving only a meager 50 yuan in compensation.
These incidents are not isolated; they have repeatedly occurred at many stores across different locations, indicating that the brand has failed to maintain its food safety standards.
3. The Cost of Rapid Expansion
Meiyijia's success in opening 40,000 stores is due to its low-entry franchising model: initial investment of 300,000-350,000 yuan, a franchise fee of 25,000 yuan, and only a monthly management fee of 1,000 yuan, with almost zero profit sharing (in contrast to Japanese convenience stores, which take 20%-30% of profits). While this model allowed Meiyijia to quickly expand into urban and rural areas and industrial zones, it also has significant drawbacks:
- Without profit sharing from the franchisees, the headquarters focuses solely on opening more stores rather than managing them effectively. With 40,000 stores spread across several provinces, the headquarters' inspection and traceability systems cannot keep up with the pace of expansion.
- Franchisees may lack management skills, and the headquarters lacks the incentive to monitor expired products on the shelves, as they do not profit from these issues.
4. The Failure of Blaming Franchisees
In the past, when problems occurred, Meiyijia's typical response was an apology, investigation, and termination of contracts with affected stores. For example, after the counterfeit cigarette incident, 606 franchisees were terminated, which seemed decisive. However, this does not address the root cause: if a few stores have issues, it is unlikely that hundreds of store owners are acting in concert. The problem lies in the headquarters' franchising system, which has attracted many people without proper training and oversight, and then blames the franchisees when problems arise.
5. The Future for Meiyijia
The regulation requires Meiyijia to establish a risk management and traceability system that covers the entire chain, including the headquarters, branches, and stores. In other words:
- Every step from supply to product display in stores must be monitored.
- Expired food must be traced back to its source to prevent it from reaching the shelves.
- The headquarters must be responsible for the food safety of all stores and can no longer shirk their responsibilities.
For Meiyijia, this means changing its focus from rapid expansion to effective management. It either needs to slow down the pace of new store openings or invest more resources in ensuring compliance at each store. Otherwise, the next time, it may face direct penalties rather than just a meeting with regulators.
This incident serves as a reminder to all chain brands: the larger the brand, the greater the responsibility. The headquarters cannot use the excuse of "franchisees being at fault" to evade their obligations. Food safety is a critical issue that no one can ignore.