Opening a self-operated store involves a significant investment.
Rent, labor, water, and electricity are very substantial expenses.
Franchising, on the other hand, can save on these costs and even bring in franchise fees.
It also allows a brand to quickly spread across major cities nationwide in a short period.
But there's a downside to choosing franchising.
That is, the brand has very little control over franchisees.
If franchisees, for their own benefit, disregard the interests of the brand and do something undesirable, the brand's image will be damaged.
If you open self-operated stores, however, this problem can be avoided.
Haidilao adopts the self-operated store model.
Self-operated stores allow for control over all major outlets.
Haidilao became popular because of its extreme customer service.
If franchising were used, the service provided by franchise stores would be hard to guarantee.
Once the service declines, it ultimately affects Haidilao.
