The same milk tea, tea, Nai Xue can easily be more than 20 dollars, while the most expensive honey snow Ice City is only 10 dollars; the same burger package, KFC, McDonald's are 20 yuan, but Wallace can do 10 yuan 3 burgers of the ultimate cost-effective, relying on the price of the cheapest small town youth's favorite.
These seemingly unassuming stores have opened in some of the most unassuming places in China, but have fostered an astonishing scale and sizable profits.
As the "Village KFC" and the price killer of the fast-food world, Wallace has opened 18,000 stores without saying a word - you read that right, it's more than KFC and McDonald's combined. Those who love him regard him as the light of the country and the end of foreign fast food, while those who curse him say he is a "jet fighter" transformer, don't think they are brainless black, if you go to the search, you can see hundreds of complaints about Wallace on the black cat complaint platform.
Today right brother will talk to you about how Wallace opened tens of thousands of stores, the price of the products are almost half of KFC but can make money? In the face of public concern about food safety, what does Wallace not do enough?
One, low prices, sinking, Wallace's first bucket of gold
The story begins in 2001, Wallace's founder Hua Huaiqing and his brother Hua Huaiyu put together 80,000 yuan in front of the Fuzhou Normal University to sell foreign fast food, named "Wallace".
Early Wallace did not have any wild ways, completely copied the model of KFC, McDonald's, store area of more than 300 square meters, but also set up a large children's playground, the price of Wallace was also compared to the first two to come, burgers from 8 yuan, 4 yuan a cup of Coke.
But soon Hua Huaiqing realized that completely copying others is simply not feasible, since they are the same, why not simply eat KFC? Seeing the serious losses, the breakthrough Hua Huaiqing a ruthless trick - price cuts!
So the back of the sensational "Special 123" package: Coke 1 yuan, chicken legs 2 yuan, burgers 3 yuan, a package adds up to the price of only 6 dollars. Then something unexpected happened, Hua Huaiqing found that this trick is really useful, he immediately realized that people just feel that things are expensive and do not want to eat, and since then Wallace in the "cheap" on the road farther and farther away.
Smaller stores, from more than 300 square feet directly to 50 or 60 square feet, the location should be selected, KFC, McDonald's gathered in the first and second tier of the city basically do not consider the third and fourth tier of the city of small towns is the first choice of Wallace.
The staff was halved, and no young brother or sister was found to be a waitress, so the aunts were allowed to work, and the salary was cheap, and a person could break up and do the work of three people.
That's right, in Wallace to give you the order, cashier, fried chicken to do burgers, and even the store sanitation may be the same person. If KFC uses chicken thighs, Wallace will use chicken breasts; if KFC uses Heinz, Wallace will use Tasty, in short, to keep costs as low as possible.
Relying on the two magic weapons of low price and sinking, Wallace expanded rapidly, opening three stores a day at the craziest time.
Two, can save on saving, "stingy king" Wallace is how to practice?
Now in Wallace more than 18,000 stores, there are more than 43% distributed in the third and fourth tier cities, in 2016 Wallace more in the name of Huashi food listed on the new third board, become a sinking market invisible giant.
The question is, sell so cheap it really make money? Judging from its financial reports, Wallace seems to be living pretty well.
Wallace Foods' revenue rose from 1.1 billion all the way to 3.5 billion from 2016 to 2020, and its net profit improved from 21.54 million to 92.09 million over the past five years, but the gross profit was really low. Last year, Wallace's gross profit was only 4.7%, while the average level in the industry should be around 20%, and in terms of costs, operating costs accounted for the bulk of the total, reaching more than 90%.
Previously, a friend asked me, "Can you eat Wallace selling so cheap? About this point right brother to say is that, in fact, fried chicken burgers this kind of product, raw materials pressure is not as high as you think.
Right brother found that many catering brands use a foreign introduction of white-feathered broiler, China's white-feathered broiler alliance president Li Jinghui had previously calculated the cost of white-feathered broiler, broiler growth stage in accordance with the 2.5 yuan a chick to calculate, plus feed, drugs, personnel, water and electricity, depreciation, etc., the cost of the market is 7.5 yuan per kg, plus the abattoir deep-processing links as well as the company's management costs. Management costs, farmers should cost about 8.75 yuan per kilogram, a 2.5 kilograms of white-feathered chicken head, neck, claws and giblets almost 1.75 kilograms, the cost is about 15.3 yuan.
And Wallace's price for a steak chicken is 26.8 yuan, plus large enterprises purchasing large quantities of further compression of costs, profit margins are actually still there.
And we have already said, Wallace has been "stingy" to the extreme, from the financial report can be seen Wallace's cost of goods sold is only 0.54%, there is almost no promotional costs, the management cost is also very low only 0.43%, to put it bluntly, in addition to selling you a fried chicken burger, they can save! All to save.
Three, behind the expansion is now a hidden worry
While Wallace food safety problems, but never low prices and raw materials pot, then what is the reason?
On the one hand, because of the early expansion is too fast, Wallace's stores broke ten thousand walk is not to liberalize the road of joining, but through the staff partnership model, headquarters staff, store employees, those who have store resources, business contacts, only these four people can become partners, so you want to join Wallace, you have to join Wallace first.
Site selection is determined after the company's personal 50% of each fund, share allocation on the individual not more than 40%, in addition to the company and personal holdings, the remaining shares will also be allocated to the store staff, everyone has shares, everyone has the right to make decisions, greatly incentivizing the initiative of the staff, more than one shareholder can also diversify the risk of increasing the ability of resistance to attack.
But this approach also makes management and quality control difficult, the partners themselves are the boss, the headquarters has limited control.
From the financial report, Wallace has two sources of income.
One is product revenue mainly from the sale of raw and auxiliary materials, packaging and equipment for western fast food terminals, doing business on the B-side, with more than 18,000 of its partner stores as his customers.
The second one is consulting service income, which is mainly to provide decoration program, operation solution and store opening counseling. Wallace will charge 10,000 yuan of consulting fees for each store, in other words, Wallace earns is actually the money of the partners, so the consumer experience is how they are not much care at first, the number of stores is huge is also a partnership, the headquarters of the management of the stores is also very loose.
In addition to this, the right brother also found from public information, Wallace organizational structure on the irrational, but also become a Wallace food safety problems occur frequently one of the reasons.
Wallace's on-the-job staff *** counted 438 people, including 61 administrative staff, 334 sales staff, 43 financial staff, which does not have any and food safety-related staff disclosure. On the other hand, KFC's parent company, Parkson China, has 304 employees in its food safety and quality assurance department, compared to Wallace's, so it's hard for Wallace not to have problems.
Summary, Wallace's hidden worries are mainly generated in the management above, good luck to stumble upon a conscientious store to eat and drink are no problem, bad luck will have to seek their own
.