Summary of the Key Points
This news article focuses on the transformation story of Zhu Fuqiang, the CEO of Sai Bai Wei in China. As a veteran with 34 years of experience in the fast-food chain industry, he took over Sai Bai Wei, which had lagged behind in its development in China (only opening 500 stores in 30 years). By addressing issues stemming from the franchise model, such as the lack of coordination among individual franchises, gaining local decision-making power, avoiding price wars, and emphasizing fresh, healthy, and differentiated offerings, Zhu has helped Sai Bai Wei accelerate its expansion in China. In 2023, the company opened 320 stores, and it plans to open 350 more in 2025. He also aims to change consumers' negative perceptions of Sai Bai Wei as a “western-style restaurant that serves cold food and is expensive and unpalatable,” striving to stand out in the fresh and healthy food segment.
Why Did Sai Bai Wei Lag Behind in China by 30 Years? – The Double-Edged Sword of the Franchise Model
Sai Bai Wei entered the Chinese market in 1995 but fell far behind competitors like McDonald’s (6,000 stores) and KFC (10,000 stores). The core problem was that it adopted a franchise model to expand quickly without establishing a solid system.
- Comparison: When McDonald’s and KFC first entered China, they used direct operations, with unified site selection, brand promotion, and supply chain management, acting like a well-organized “regular army.” Sai Bai Wei, on the other hand, relied on individual franchisees, each operating independently, leading to scattered efforts. Some stores were located in remote areas, and their marketing was inadequate, leaving customers unaware of the brand’s existence.
- Zhu Fuqiang’s optimism: “It’s precisely because we did poorly before that we have the opportunity to start over.” This means there are no historical burdens, allowing them to build a new system from scratch.
How Did They Gain Local Decision-Making Power? – Negotiating with the US Headquarters
To address Sai Bai Wei’s long-standing issues, they had to break free from the headquarters’ strict regulations. Zhu Fuqiang’s team spent over a year in negotiations and obtained four key rights:
1. Menu Pricing Authority: They can develop their own menu items, aside from a few globally standardized products (such as hot sandwiches and energy bowls that suit Chinese tastes). “How would Americans know what Chinese people like to eat?”
2. Brand Image Design Authority: The Chinese team can decide on the visual elements and messaging for brand promotion.
3. Supply Chain Autonomy: They can use locally produced equipment instead of fully imported ones, which is both of higher quality and cheaper, reducing the burden on franchisees.
4. Franchise Fee Discount: The headquarters agreed to reduce franchise fees after a certain number of stores were opened. This is the only region in the world where such a concession has been granted, facilitating rapid expansion.
How to Stand Out Without Engaging in Price Wars? – Focusing on Freshness and Health
The fresh and healthy food segment is now highly competitive, with many players (including startups and giants like Yum!). Sai Bai Wei’s strategy is to focus on quality rather than low prices:
- Attracting Customers Without Cutting Prices: They offer a 9.9 yuan breakfast deal (a 4-inch sandwich and freshly brewed coffee), which serves as a promotional tool. The real focus is on differentiation:
- Freshly baked bread at the store, sold within 24 hours without preservatives.
- Free addition of seven vegetables for customers to customize their meals.
- Avoiding Price Wars: “With thousands of stores, we can’t compete on price. Instead, we’ll highlight our strengths—freshness and health as our competitive advantage.”
Balancing DIY Personalization with Fast Food Efficiency
While Sai Bai Wei’s DIY option (where customers choose their own bread, vegetables, and sauces) is a unique selling point, it also slows down service times. Zhu Fuqiang’s team has implemented the following solutions:
- Mobile App for Streamlining Orders: They have a mobile app with two sections: “Chef’s Recommendations” (popular combinations for 85% of customers) and a “DIY” section to reduce choice time.
- Reservations: Customers can place orders in advance and pick up their meals at the store.
- Optimized Supply Chain: They use data to predict ingredient usage and minimize waste. Although DIY increases complexity, it’s an essential part of Sai Bai Wei’s identity.
- Benefits of DIY: It keeps customers engaged, leading to higher frequency of visits (Zhu Fuqiang eats at Sai Bai Wei 6–8 times a week himself).
Negative Reviews as an Opportunity for Improvement
Zhu Fuqiang makes it a priority to review Sai Bai Wei’s negative reviews daily and forwards them to his team, requiring a 100% response rate (except when customers are unreachable).
- Examples:
- When the first store in Nanchang opened, 150 orders came in within 5 minutes, causing slow service. The team contacted each customer, apologized, and offered free samples.
- After receiving complaints about a limited breakfast menu (only large sandwiches and cola), they added smaller sandwich options and soy milk, significantly boosting breakfast sales.
- Attitude: “Companies that receive no criticism are either too perfect (impossible) or ignored (on the verge of failure). Reviews give us opportunities to improve; we can’t impose our ideas on customers—they are always right.”
Sai Bai Wei’s Goals
Zhu Fuqiang aims to have a store every 300–500 meters in key business districts and open 4,000 stores within 20 years. He believes that although the market is competitive, as long as they stick to their fresh and healthy philosophy and execute their plans well, they can succeed. In essence, he treats Sai Bai Wei like a new startup:他没有 a private office, books his own flights, and constantly monitors customer feedback, using an entrepreneur’s mindset to address past shortcomings.