Since its founding in August 1999, Little Sheep's "non-dipped lamb shabu-shabu" specialty has gained widespread popularity among consumers, and it has quickly begun a chain operation. Starting in 2000, as Little Sheep's specialties were recognized by more and more people, many businesses caught on to the business opportunity and began to join Little Sheep, and a wave of franchises emerged.

Because of the many early joiners, coupled with the rapid occupation of the national market, in their own strength has not yet reached the case, Little Sheep company to join the policy as "to join the main focus on direct", set up in all parts of the country in the provinces, cities, counties, general agents and individual franchises. The introduction of this policy, for the early rapid development of the company played a positive role, not only to meet the market, the franchisee, the needs of consumers in three areas, but also to create a good brand, so that the footprint of Little Sheep in just two or three years across the country, a hit the popularity.

"Franchise-based, focusing on direct" business policy for the company's rapid development of the beginning of the benefits, but also produced many drawbacks. Focus on the quality of the franchisee, service and management quality varies, thus harming the interests of consumers. And because of this period, "Little Sheep" is not a registered trademark, the lack of strong weapons to fight against counterfeiting rights, resulting in the proliferation of counterfeiters, but also seriously hurt the reputation of the Little Sheep brand, so that the company's further development constraints. Based on the above situation, from the end of 2002, the company took a series of measures to reverse the chaotic situation in the franchise market. The core is to adjust the franchise policy, from the original "to join the main, focus on direct" to "to direct, standardize the franchise". Specific measures are:

First, the establishment of the franchise center, responsible for contact with the franchisee, management and service. Franchise center after the establishment of almost all over the country, scattered throughout the more than six hundred franchises to conduct a comprehensive and in-depth investigation for the next step in banning and reorganizing the franchise provides the basis for the face. Secondly, in early 2003 in the franchise center on the basis of the investigation, the board of directors to make the decision to suspend the franchise business, and since then a long period of time the company almost no new franchise. At the same time the company phased, focused on the franchise market for a series of standardization and rectification. From 2003 to 2007 a few years, the company on the franchise market for large-scale governance rectification, its focus is mainly reflected in the following words: the first word is "off". Is resolutely outlawed in the inventory of unqualified stores found in order to maintain the brand image of Little Sheep from harm; the second word is "delay". The second word is "extend", which means that although the business situation is poor, but can actively cooperate with the company to rectify the store to be retained, rectification of the deadline; the third word is "collect". On the one hand, a number of orderly operation found in the investigation, the profitability of the store for the acquisition, into the company directly managed stores in the standardized management system. On the other hand, the gradual recovery of all levels of the expiration of the general agent's agency, and will not renew the contract; the fourth word is "together". That is, with good franchisees, agents to shareholding, holding and other forms of cooperation. Typical cases at this stage is with the original agent in Gansu, will be incorporated into the headquarters of the branch, **** with the development of the western market.

After several years of uninterrupted cleanup, adjustment and standardization, the number of chain stores of Little Sheep Company has now been reduced from the peak of 721 to 360. Among them, there are 218 unqualified stores (72 stores in Henan, 38 stores in Shandong, 24 stores in Gansu, 39 stores in Shaanxi, 2 stores in Qinghai, and 43 stores in Northeast China) which were closed after the expiration of the general agent was banned; 36 franchises which were banned due to the inability to maintain the company's image and reputation; 19 stores banned due to irregularities in operation; 40 stores banned due to overtime operation; and 21 stores banned due to major complaints. 21 stores were banned; 53 stores closed on their own due to poor operations; and 8 stores closed due to force majeure. From 2003 to April 2007, the Little Sheep franchise market has been effectively purified through persistent cleaning and standardization. Therefore, from May 2007 onwards, in order to meet market demand and the franchisee's request to join the voice of the Little Sheep Company to re-plan the opening of high-quality franchised stores, into the "not only the number of quality" stage of development - the domestic market: first and second-tier cities To direct operation-based, second and third-tier cities to franchise-based, the formation of complementary, mutually reinforcing pattern, and no longer set up any form of general agent; international market: in view of the international franchise appeal is relatively high, so for the actual situation of the international market, will be in the opening of directly-managed stores and gain sufficient experience on the basis of the moderate opening of franchises. The form of flexibility, both to set up the necessary general agent, but also to set up individual franchises to fully open the international market.

The new franchise policy improves the requirements of the franchisee, but also to improve the franchisee's services. The ultimate goal is to improve the standardization of franchise storefront operations to make it operate at a high level, in order to achieve a three-way **** win for consumers, franchisees and the company.

As of December 2011, the company has 469 chain stores, including 163 self-operated restaurants and 272 franchised restaurants, and more than 20 restaurants in the United States, Canada, Japan, Hong Kong and Macao. It is a household name in Chinese restaurant chains.

Small Sheep's vertically integrated business model is highly scalable, with operations that include lamb processing, hotpot soup production, restaurant operations and wholesale food distribution.

From "Top 100 Chinese Food Enterprises" and "Top 500 Chinese Enterprises" to "International Franchise of the Year Award" and "Top 25 Franchise Awards" conferred by Singapore's Franchise and Licensing Association (FLA), Little Sheep has been recognized as one of the top 100 Chinese food companies in China. ", "25 exemplary brands" ...... Little Sheep with ten years of cultivation, has made gratifying achievements, but also for the standardization of Chinese food, branding, international exploration has set a typical.