Haidilao eyes expansion with new franchise model

Hotpot restaurant chain Haidilao International will introduce a franchise model as it looks to support the expansion of its restaurant network through a diversified business model.

The company said that it believes the franchise model will strengthen its operating capabilities. It will also introduce additional high-quality resources and improve its operational efficiency, according to a filing that was seen by MARKETING-INTERACTIVE.

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The franchise model will also aid Haidilao in facilitating its expansion for more regions the brand can serve. This will be launched after the consideration of factors such as market size, competitive landscape and location.

To launch its franchises, the company will adopt several standards for its franchisee selection that include vision planning, the franchisee’s industry experience and financial strengths.

The franchised restaurants will be provided with central and back-office services, such as staff training, supply chain system, management experience, food safety control and brand marketing services to name a few.

Haidilao International also added that this decision came after paying attention to and evaluating different business models in the market.

“In recent years, the catering industry has continued to develop, innovate and grow in chain operation and franchise models and we believe that taking the self-operation model as the main business direction while introducing the franchise model when appropriate will facilitate further expansion of the company at a moderate pace,” explained the company.

While Haidilao International takes on a franchise model, it must be careful about the types of discounts and promotions each franchised restaurant offers as it took back its offer on tiered discounts after it faced backlash online in 2022.

The offer came around the same time as the release of PSLE results and said that the eatery would be offering SG$30 discounts for students who receive scores between 4 and 7. Students who receive a score of 8 to 11 will get an SG$20 discount. Lastly, students who receive a score of 12 to 20 will get an SG$10 discount. For context, the lower the PSLE score, the better the student is said to have scored.

However, the post, seen by MARKETING-INTERACTIVE, soon saw netizens calling out the brand for discrimination. Some said every child should be able to celebrate their hard work despite the results and others called it a “crappy marketing scheme”.

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