How do Internet product managers understand the growth logic of chain restaurants

How do Internet product managers understand the growth logic of chain restaurants

This issue of BrightTalk focuses on the difficulties in the growth and operation of catering chain brands, involving site selection, product selection and investment promotion. The guests also shared the easy pits in catering, the benefit distribution mechanism in catering, and the construction of organizational strength And other topics.

During the sharing, Liu Bo believes that it is very important to choose food and beverage products, because the category determines the scale ceiling, the degree of standardization, the cost structure, and the business model. These factors together determine the difficulty of restaurant expansion.

It is worth mentioning that the current profit distribution model of chain catering has evolved. In the sharing, the guest mentioned the “Fujian model”, and the representative company is Wallace. The core of this model is internal franchise and all employees hold shares. The guests believed that the all-employee shareholding model will be a standard feature in the catering industry in the future, because labor costs will definitely become higher and higher. Only this model can drive everyone’s enthusiasm.

In addition, the Internet product manager’s understanding of users, products, and services, dismantling of processes, and “a systematic way of thinking that provides users with the best solution under limited resources” can also be transferred to the catering industry. Catering changes.

In conclusion, catering basically depends on operation. It is only by continuing to rely on “returning customers” to operate in order to sustain and create profits. In the words of the Internet, catering is essentially a repurchase business.

What determines the profitability of catering?

Editor-in-chief of Mingliang Company: How did you choose the category you entered when you first started catering?

Liu Bo: Catering has a market of four to five trillion yuan and hundreds of categories. Whether you can choose the right category will largely affect how far you can go. For brands that only make single-product categories such as crab, bullfrog, and beef, sometimes the price and supply will be unstable, or the category will have systemic risks. These categories that rely too much on a single ingredient will affect the brand and overall profitability.

In addition, even if it is a single ingredient, it is necessary to choose a category with universal taste to make it bigger. For example, it is more difficult to get out of Henan for hot and spicy soup, but hot pot can be eaten in all of China. Why choose Huang Jihuang? One of the reasons is that it can stew anything, fish, meat, beef, mutton and seafood can be made into stew; the second key element is the cost structure. Huang Jihuang has a relatively high gross profit margin and a high degree of standardization, so the labor cost is relatively high. Low rents can be obtained in third- and fourth-tier cities, so the overall business model is better.

Based on our comprehensive comparison, Huang Jihuang’s gross profit margin can even reach 70%. This gross profit margin is relatively high in catering, such as barbecued meat, which is roughly 65% (the gross profit of lamb skewers is only about 50%) ; the gross profit of Chinese stir-fried dishes It is good to be able to achieve more than 55%; the gross profit of hot pot is basically 63%, which is quite high.

Another advantage of Huang Jihuang is that it is highly standardized and easy to use. Huang Jihuang spreads the vegetables at the bottom and uses an anhydrous braised system without the need for a chef.

WhatIf Chief Information Officer: Not requiring a chef is critical, which means it can be copied quickly. Because it takes at least 3 to 5 years to train a chef; at the same time, chefs are more difficult to manage. For example, some chefs will ask for a salary increase overnight, and will take the entire team away if the increase does not occur, which is difficult to manage and difficult to grasp.

Liu Bo: Yes, Huang Jihuang’s standardization is also very high, and the operation is simple. The basic operation can be trained in 7 days. Its labor cost is relatively low, and its supply chain can basically achieve 90% of frozen products. Or mature semi-finished products. Based on this, its employment costs are relatively low in catering, and Huang Jihuang can achieve labor costs that are about 10% lower than that of the same industry.

Editor-in-chief of Mingliang Company: Huang Jihuang’s model is indeed highly standardized. Now there are more chains in lower-tier cities. Does the chain format itself have some time difference and regional dividends?

WhatIf Chief Information Officer: Indeed it is. There is a trend in China’s catering branding as a regional dividend. There are not many shopping malls in third- and fourth-tier cities or even fifth-tier cities, and there is still a wave of opportunities for shopping centers. More than 50% of catering in old-fashioned shopping malls are not chain brands, which also means that a chain brand has the potential to open a store, and it is better to talk with the mall when negotiating rent.

Liu Bo: I also add some data. For example, in a third-tier city like Zhumadian, Henan, 200 square meters is about 20,000 yuan/month, the rent-to-sale ratio is 10%, and the rental cost only accounts for 10%, while the rental cost of chain brands can be reduced to Only 5%~8%, it has a rent advantage. The upper limit of the catering can be calculated from the three time points in the morning, midnight and evening, the number of turnover and the turnover rate, etc., and the level of standardized operation and the speed of meals can all determine the revenue of the catering. For categories with a short meal time, you can turn 5~7 sets a day, such as some pot types, if the production process is slow and complicated, the meal time may only be turned by two sets.

Editor-in-Chief of Mingliang Company: When it comes to rent, another important issue in catering is location selection. How do you control location selection?

WhatIf Chief Information Officer: Let me talk about our understanding first, and then ask Liu Bo to add it. For a single store, location is very important, because it determines the traffic and pays the rent to the mall. In fact, it is the same as the online communication fee for Meituan. Good locations are very expensive. The point is that many good locations are only circulated within a limited range and are scarce. This requires resources and the ability of contacts.

Liu Bo: Indeed, we have a deep understanding, and in the same location, different teams get different rents, which are related to the brand’s entry time and negotiation ability. Site selection is also a test of the team’s localized resource capabilities. It is also a barrier.

Some catering brands cannot enter the mall at all, and it is not a matter of money. For example, some shopping malls will require that it must be the first in the province or that the brand is not sufficiently tuned. Even if some relatively aging brands are relatively large, they do not have much say when negotiating with the super-A business district.

Huang Jihuang used to be an Internet celebrity brand, and it was a very good catering model. Later, the potential energy declined. This is also the most fundamental thing. The catering is fundamentally based on operation, and repeat customers can continue to operate to obtain sustained profits.

Editor-in-chief of Mingliang Company: The operating ability is very interesting. How do we understand the operating ability of catering?

WhatIf Chief Information Officer: I understand that the operation may be to truly become a team. The store manager, supervisor and partners can treat this store as their own store. This possibility can be called operation. If the business problem can be solved , The entire team can be greatly improved.

Liu Bo: Food and beverage is not particularly difficult in nature. There is a saying inside us that there is no store that cannot be made. We used to be in a poor position in the mall, and after half a year of hard work, we were able to basically double it.

The management consciousness of restaurant managers has solved the problem of willingness, and it may also solve many problems. A large part of practitioners in the catering industry is a question of willingness, because their own management team stays in the store, and the casual meal service touch point will be very long, which will test the service experience in the entire service process.

In the end, the essence of catering is to rely on operation, even if the location of the store is not particularly good, as long as it can satisfy the customers who can radiate, he will repurchase after a long time, and ultimately rely on repurchase. The success of a store depends on people. Organizational strength is indeed the most difficult.

Why should a catering brand be tied to the interests of employees?

Editor-in-chief of Mingliang Company: It is indeed the most difficult to build organizational strength. There is also an important issue concerning the distribution of benefits. How to set up an appropriate benefit distribution mechanism in catering?

WhatIf Chief Information Officer: One of the profit distribution models in the catering industry that I know is called the Fujian model. Many domestic catering companies are also using this model, especially those from Fujian. The representative company is Wallace. Wallace has more than 20,000 in the country. They do not join, but only internally join. For example, if an employee does a good job, he will be promoted to open another store. The most popular brand “Haantian Yaoqing Pepper Roasted Fish” recently also relies on this profit distribution model.

This model will bind all the people related to the store, and will let everyone invest money, such as 20% of the investment site selection, so as to solve the problem of one-shot purchase of the site; like the store manager, it will account for 8%~ 10% of the points, the front office supervisor and the back kitchen supervisor both take up, and the excellent waiters and even stable hourly workers have to invest money. The founder of Bantian Yao is the proud protégé of the founder of Wallace, who has carried forward the Wallace model.

Liu Bo: I know that fellow chicken and dozens of other brands are using this model. I think this model will be the standard for catering in the future. It is essentially the same as Huawei’s full stock ownership and Haidilao’s profit-sharing model. It has to give up money, and distribute the money to those who are worthy in a fair and transparent manner. It also has a high elimination rate, so it stays. It must be a particularly capable person.

Of course, what shocked me the most was that they really gave the store manager the identity of an investor. Even if the store manager quits or changes the store, his shares can still be there. That part is called the ownership of the store investor and serves as the store manager. It’s just the right to operate, the two are separate, and investors can divide the money every month.

This model of all-employee stock ownership may become a standard feature in the catering industry in the future, because labor costs will become higher and higher, and this model can stimulate everyone’s subjective initiative to the greatest extent.

What pits will talent and organization building step on?

Editor-in-chief of Mingliang Company: The core of interest binding is actually tying people. The influencing factors of people are very important. Have you stepped on any pits in terms of people?

Liu Bo: At the beginning, I didn’t know enough about people, and I stepped on a lot of pits. Now the experience is that the selection of people is indeed the most important thing. In the second half of 2020, we will have three or four stores open every month in a row. At first, we selected people from fast food like KFC. They have not yet understood catering in the dimension of mechanism design. In the past implementation experience It also lacks the concept of service, so the effect is not good in actual business.

WhatIf Chief Information Officer: Speaking of service, I have some feelings. The service consciousness of fast food is relatively inferior to those of Chinese food or large restaurants. For Chinese food, 10 years ago, everyone had very strict standards, but the service genes of the people who came out of fast food were not strong enough, and the essence was a genetic problem.

Liu Bo: Yes, so it takes some time and cost. We opened the store too fast last year. Some people asked him to be the store manager after six months of being the supervisor. They would find that he could not control the entire store. Our wishful thinking helped to encourage it, which led to “lose-lose”. This person’s self-confidence was also frustrated, and the performance of our store was not satisfactory. Therefore, we have basically given up the idea of ​​training students or cultivating people, and companies are only qualified to train others when they reach a certain scale.

Editor-in-chief of Mingliang Company: It is indeed very difficult to train people. Talent management in the catering industry has always been a big problem. Some people think that culture should be used to manage people and form combat effectiveness. What is your experience in cultural construction?

Liu Bo: Our scale grew too fast last year. It suddenly doubled four or five times. The number of people under management increased from one to two hundred to seven to eight hundred. This poses a great challenge to the company’s talent echelon, and the company’s values, mission, vision, Corporate culture training is lacking. Looking at it now, the corporate culture should be formed when the company develops to 50 to 100 people, because corporate culture is not a simple Slogan (slogan) , it must be implemented every bit of work.

There are also some pits, which may be cross-regional. When the team organization is weak, you need to start regional chain management later, because the on-site management of the catering is very important. The store manager is the most important person in each store. The store manager is not deeply connected with the company and does not trust the organization enough, or When his own business ability is not strong enough, some problems will inevitably arise.

WhatIf Chief Information Officer: Yes, the regional management itself will actually bring a lot of costs, so many brands will choose to make a place first.

Liu Bo: Yes, it is very difficult to do. In addition, multiple brands will bring us a waste of energy and resources. Even if there is only one store for each brand, its SOP performance standards and personnel training must be repeated, which leads to low input and output.

Can product manager thinking be transferred to catering?

Editor-in-chief of Mingliang Company: You used to be a product manager on the Internet. Can Internet products and user thinking be used in the catering industry?

Liu Bo: I sorted out the store after opening it at the end of last year. On the whole, I treat the entire store as my product, and dismantle it from the user’s perspective. The big links can be divided into: before entering the store, in the store, and after leaving the store, these are all procedural things. Disassemble it out.

For example, the post of Menying can be thought in a systematic way-for example, what kind of person this person should be, maybe a good-looking, talkative and relatively young and lively girl or handsome guy; another perspective is him What to wear, what to say, what props to configure, whether you need to carry a basket with candies or snacks in it, these can be disassembled to a very fine particle size.

My feeling is that in the catering industry, in the thinking of some people I have heard in the past, they may not fully and systematically think about how to make the best decision in various scenarios. For example, the snacks waiting at the door are nothing more than popcorn and crispy rice, but from the perspective of the product manager, there are 10,000 kinds of snacks in the world. Why choose these kinds of snacks?

When we run them all through this systematic way of thinking, we may find that the current (scheme) is not the optimal solution, and it is impossible to evaluate the effect of these things now.

How can we make the optimal solution, or the gradual optimal solution, how to iterate the first version and the second version, these are all suitable for product engineering methods. Large products such as kitchen equipment, front office equipment, tables and chairs, moving lines, etc., small products such as music, QR codes, small snacks, etc., can be improved in terms of efficiency and experience. In fact, some of the details can be particularly detailed.

In essence, product managers in the Internet and consumer industries are all about understanding users and controlling costs, and how to provide users (including customers, employees, and the company itself) with an optimal solution under limited resource conditions .

WhatIf Chief Information Officer: These details can be split. There is also the leading position just mentioned. This was actually produced in the 1970s and 1980s abroad, and this has a great impact on the consumer industry. After a customer grows grass, tastes, and eats in the store, the customer’s NPS (Net Promoter Value) is higher and they are more willing to spread it.

Liu Bo: Yes, for example, the soup spoon of Banu hot pot may be iterated five or six times, because the spoon is matched with the bowl of fungus soup. It happens to be a spoonful of a bowl. These are all about experience and efficiency. This is where user thinking or product thinking can be used. Now Internet product managers are seriously “involved”, but the consumer industry needs a large number of such talents in the future, and everyone must think from a lower level and more systematic point.

Editor-in-chief of Mingliang Company: Haidilao is currently the best catering company in China. How do you look at Haidilao, including companies such as Ba Nu and Hi Tea?

WhatIf Chief Information Officer: Haidilao is actually the most valuable company in China’s catering industry. Its market value is about the same as that of Yum China. Hot pot is China’s largest (or second, depending on the caliber) category, and a single market has a market of 600 billion to one trillion.

Haidilao has a very strong operating capacity, and its rental cost only accounts for less than 3%. Before 2018, many shopping malls in Haidilao received decoration subsidies, which has formed a positive Matthew effect, so it can provide better people with better people. Service.

Haidilao is a group type, and Shuhai and Yihai are relatively leading to make money like this. Ba Nu began to differentiate itself in 2009. Ba Nu pays attention to elite dining. It must be differentiated from Haidilao, otherwise it will not be able to do Haidilao.

Hi Tea Club is more retail and has a stronger brand sense. Its core barrier is still occupying the minds of users. Then you can define categories and how to establish catering barriers. This may be everyone is looking for the answer.

Liu Bo: There are some differences between the various players, but they are very similar in nature in terms of operation and incentives. For example, Haidilao divides the money. It divides the net profit of the store among the store manager, front office supervisor, and master.

In the iteration of the product thinking of product managers to the catering industry, more new practitioners have learned before the migration. To start a catering business, some catering backgrounds will be better and you can avoid pitting, but at the same time, if you have been in the business for too long, you will be limited by some thinking and it is not easy to jump out.

Another problem is how to break through the diseconomies of scale in restaurant chains. There is a chain of “medium-scale traps” in catering. When the store grows to a certain extent, the middle and back-office capabilities must be built. At the same time, open 10 stores, each of which makes money, but the company does not make money, which presents the problem of diseconomies of scale, which should be considered when starting a restaurant business.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/how-do-internet-product-managers-understand-the-growth-logic-of-chain-restaurants/
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