In the past three years, bulk snack retail has been the strongest trend in China's offline retail. At the peak, headquarters counted profits while franchisees queued up. But as Mingming Henmang listed and Wanchen Group filed again for Hong Kong IPO, both surpassing 20,000 stores, the narrative has shifted. Headquarters' financials look better, but franchisees' books are harder to balance. This is not a brand-specific issue but an inevitable stage of the model. Let's look at the latest numbers. Mingming Henmang: as of end-2025, total stores reached 21,948, with 7,813 new openings and net increase of 7,554, covering all 30 provinces and all city tiers, with about 60% of stores in county towns and townships. Of the 21,948 stores, 21,927 are franchised, and only 21 are company-owned. This is a network almost 100% supported by franchisees, behind which are 10,327 contracted franchisees, each operating over 2 stores on average. In 2025, GMV reached 93.569 billion yuan, up 68.5% year-on-year; revenue was 66.170 billion yuan, up 68.2%. Wanchen Group: store expansion is accelerating. At end-2025, bulk snack stores reached 18,314, with net openings exceeding 4,100 in the year, of which nearly 3,000 were in H2; by end-February 2026, stores exceeded 19,500, approaching 20,000. In 2025, retail sales exceeded 73.3 billion yuan, revenue was 51.459 billion yuan, up 59.2% year-on-year; Q1 2026 report shows quarterly revenue of 16.634 billion yuan, up 53.7% year-on-year, net profit attributable to parent of 630 million yuan, up 193%, with membership nearing 200 million. Together, the two have over 41,000 stores, with combined retail sales in 2025 approaching 170 billion yuan, and both are on the capital market. Mingming Henmang listed on the Hong Kong Stock Exchange earlier this year, and Wanchen is advancing its "A+H" listing. In the context of China's offline retail, this is a rare growth rate in the past decade. But in the same two years, another set of numbers has been moving in the opposite direction. The most obvious change is store density. In just over two years, Mingming Henmang's stores grew from 6,585 at end-2023 to 21,948, and Wanchen from 4,726 to over 19,500. Together, they expanded from 11,000 to 41,000, nearly quadrupling, but China's county towns and business districts have not increased. How dense has it become? Wanchen alone has nearly 9,900 stores in East China, with a 63% market share in the Yangtze River Delta, 2.1 times that of the second player; Mingming Henmang has over 14,000 stores in third-tier and below cities, with about 60% in county towns and townships. As the network densifies, each store's territory shrinks. For individual stores, this means outright diversion. Some franchisees report that within 500 meters of their store, three same-brand stores have opened, diverting 40% of foot traffic. Note: this is not taken by competitors but by their own people. Red Star Capital Bureau's 2026 offline visits found that some Haoxianglai stores showed "open" on the mini-program but were actually closed. The cost of density is that the payback period for single-store investment has stretched to 3 years, while the industry's initial standard pitch was "payback in one year." Wanchen opened 4,720 new stores in 2025, halving from 9,776 in 2024, while closures increased 96.7% year-on-year; Haoxianglai and Mingming Henmang have successively launched "zero franchise fee, zero management fee, zero service fee" policies, even offering to reimburse renovation costs and promising minimum guarantees to poach each other's franchisees. When brands need to subsidize to attract franchisees, it signals the end of the era of queuing to enter.

Why did bulk snack retail rise so quickly?

To understand today's difficulties, one must understand yesterday's speed. Bulk snack retail is not a new category; it is a circulation revolution. What is the traditional snack circulation chain? Brand manufacturer—provincial distributor—city distributor—wholesaler—small terminal store, each layer adding 15% to 30% markup. A pack of snacks with an ex-factory price of 2 yuan sells for 5 yuan to consumers. The chain is long, markups are high, and information is disconnected. Brands don't know what terminals sell, and terminals can't get good prices. What bulk snack retail does is simple and crude: cut out the middle layers, with headquarters directly connecting to factories. Mingming Henmang now directly connects with over 2,500 manufacturers, using cash purchases, no slotting fees, no payment delays, and fast turnover, passing all saved channel costs to retail prices. The same bottle of water or pack of spicy strips can be 20%-30% cheaper in bulk stores than in mom-and-pop shops, and even cheaper than supermarkets. Low margin, high turnover—this is essentially the logic of Costco and Aldi, localized in China's snack track. This model succeeded by riding three era dividends: First, rational consumption. After 2022, value-for-money replaced consumption upgrading as the main theme. Consumers no longer pay for brand premiums but have unprecedented demand for "more, faster, cheaper." Bulk snack stores with 2,000 SKUs, self-service bulk selection, and clear low prices precisely captured this sentiment. Second, channel vacuum in lower-tier markets. County towns and townships have money, leisure, and snack consumption habits, but have long been served by inefficient wholesale distribution systems. Incomplete stock, high prices, and poor experience. Bulk snack stores are often opened in county towns and townships, not by accident; that's where the circulation efficiency gap is largest, and the larger the gap, the greater the model's momentum. Third, franchise leverage + capital catalysis. Bulk snack stores require investments from hundreds of thousands to over a million yuan per store. Headquarters cannot open 20,000 stores themselves, but using franchisees' money, people, and premises, combined with capital's enthusiasm for the "10,000-store story," expansion speed breaks the physical limits of traditional retail. Mingming Henmang added 7,809 net stores in 2024 and 7,554 in 2025, averaging over 20 openings per day—a speed that mom-and-pop models could never achieve in a century. So the competition logic in the early years was clear: Whoever has more stores has greater purchasing volume; whoever has greater purchasing volume has stronger bargaining power upstream; whoever has lower prices has better single-store business; better single-store business attracts more franchisees. At this stage, headquarters and franchisees' interests are highly aligned. The market is empty; wherever you open, you profit. Early franchisees recoup investment in a year with good profits and return to open second and third stores. Headquarters wants scale, franchisees want profit—these are the same thing. The problem is that this alignment is conditional; the condition is that the market still has gaps.

Why does it become difficult after 10,000 stores?

When a city, county, or business district is densely populated with stores, continued expansion brings not increment but internal friction. Across the street, two same-brand stores facing each other is no longer news in today's county towns. The difficulty after 10,000 stores is the concentrated outbreak of three contradictions. First contradiction: Headquarters' revenue logic and franchisees' profit logic begin to diverge. Bulk snack headquarters' revenue mainly comes from selling goods to franchisees. That is, headquarters earns from "shipment," while franchisees earn from "sell-through." During market expansion, shipments and sell-through grow in tandem, making everyone happy. But when the market approaches saturation, headquarters' most direct means to maintain report growth is still to open more stores and push more goods, and each additional store dilutes existing franchisees' sell-through. Look at the 2025 annual reports. Mingming Henmang's gross margin rose from 7.6% to 9.8%, gross profit surged 116.9% year-on-year, adjusted net margin jumped from 2.3% to 4.1%, and annual profit grew 180.9% year-on-year; Wanchen's bulk snack business gross margin was 12.3%, up nearly 1.5 percentage points year-on-year, and net profit attributable to parent grew 358%. Meanwhile, single-store performance hasn't improved in tandem. Mingming Henmang's management mentioned at its first post-listing results meeting in April 2026 that same-store GMV was under pressure in H1 2025, partly due to years of focusing on rapid store openings, compounded by 2024 subsidies and price competition, with operations lagging behind expansion speed. The industry's scale dividend is still being released, but it increasingly settles in headquarters' supply chain profits and less in single-store operating profits. Profits are concentrating upward, while risks are shifting downward. Franchisees invest 700,000-800,000 yuan of real money, bear all risks of rent, labor, and foot traffic fluctuations, and in return get a payback period stretched to over two years. Franchisees are starting to find this math untenable.

Second contradiction: Store densification and the collapse of area protection. In early recruitment, "distance protection" was a standard promise. But when opening targets are imposed, and competitors are attacking neighboring counties, the protection radius begins to shrink, loosen, and even become nominal. For headquarters, it's better to open another store themselves than let competitors do so, even if it diverts traffic from their own franchisees. Strategically, this is called "saturation defense"; on franchisees' books, it's called "own people fighting own people." More brutal is competition between brands. By 2025 retail sales, Haoxianglai holds a 63% market share in the Yangtze River Delta, 2.1 times the second player; in the four provinces of Shandong, Shanxi, Henan, and Hebei, its share exceeds 55%; and East China alone has nearly 9,900 stores, accounting for 54% of its total stores. Lingshi Henmang and Zhao Yiming's strongholds are in Central and South China. Both sides are penetrating each other's territories, and every valuable location is repeatedly contested. County town business districts have only two streets, yet can host five or six snack stores. Same-brand cannibalization plus cross-brand melee—it's no wonder single-store models are being broken.

Third contradiction: Who bears the cost of price wars? The 2024 subsidy and price war was fought with headquarters setting policies and stores executing. Low prices brought foot traffic and GMV, but after margins were thinned, single stores bled first. Headquarters can restore gross margins through purchasing scale, private labels, and supply chain efficiency—indeed, both leaders' 2025 gross margins improved—but single-store rent and labor are rigid; a one-point drop in gross margin can mean a 30% drop in net profit. The three contradictions combined result in: opening speed halved, payback periods lengthening, and recruitment shifting from screening franchisees to competing for them. This is the systemic result of a unilateral scale logic reaching its end. Any chain system that relies primarily on selling goods to franchisees will face the same choice after market saturation: continue opening stores to sustain growth at the expense of single stores, or hit the brakes and switch the growth engine to same-store efficiency? Since H2 2025, actions by leading companies show they recognize the problem, but between recognition and resolution lies the inertia of the entire organization.

What's next? What should franchisees do?

Competition is rapidly shifting. The previous stage competed on "store opening capability"—speed in site selection, recruitment, renovation, and stocking; the next stage competes on "store nurturing capability"—same-store growth, single-store profitability, and franchisee retention. Specifically, there are four battlefields. First battlefield: Same-store growth replaces store count as the core metric. Mingming Henmang has begun adjusting its organization, delegating authority to over a dozen branch companies so frontline teams can respond faster to franchisee and store issues, with headquarters providing standardized capabilities. In Q4 2025, same-store GMV recovered, and management stated that 2025 store profitability reached the best level in history, expecting 2026 same-store performance to be better than last year. Wanchen: in 2025, average monthly retail sales per store were 382,000 yuan, recovering to 392,000 yuan in H2, and further rising to 406,000 yuan in Jan-Feb 2026. It has also built a private domain membership pool of tens of millions for repurchase and retention. When growth can no longer rely on new stores, the productivity, average transaction value, and repurchase rate of every existing store become everything. The capital market's valuation anchor will also shift from "store count × single-store GMV" to "same-store growth rate × single-store profit."

Second battlefield: Format upgrade, from snack stores to full-category discount stores. In early 2025, Zhao Yiming launched "Money-Saving Supermarket," Lingshi Henmang upgraded to 3.0 store format; Wanchen launched Haoxianglai Money-Saving Supermarket and Laiyoupin Money-Saving Supermarket, adding freshly baked goods, fresh produce, frozen foods, and daily chemicals on top of snacks and beverages. The logic is clear: the ceiling for the single snack category is within reach, but the supply chain efficiency of the bulk model can be replicated across broader categories. Use the hard discount capability developed in snack stores to transform community retail as a whole. This is the true second growth curve and the key to single-store model self-rescue. With broader categories, higher foot traffic frequency, and a more robust revenue structure, stores can cover rigid costs.

Third battlefield: Private labels and supply chain depth. Moving upstream is the only right way to repair gross margins. Mingming Henmang has directly connected with over 2,500 manufacturers, built 56 warehousing and distribution centers, with goods typically reaching stores within 24 hours; private labels were officially launched in 2025. Direct sourcing, customization, and private labels—each layer deeper adds margin space. How this new margin is distributed between headquarters and stores will directly determine the stability of the franchise system. If private label profits stay entirely with headquarters, contradictions will only intensify; if a significant portion is used to boost single-store margins, the franchise system can enter a positive cycle. This is a test of headquarters' vision.

Fourth battlefield: Reconstructing the headquarters-franchisee relationship. Abolishing franchise fees, decentralizing organization, and empowering branches all point in the same direction: headquarters' role must shift from "recruiter" to "operations service provider," from earning from franchisees to helping them earn, then sharing supply chain profits. Ultimately, 40,000 stores are not headquarters' assets; they are the livelihoods of 40,000 franchisee families. The sustainability of this system depends not on financial reports but on whether single-store owners are willing to renew contracts and open second stores. So, what should franchisees do? First, switch from investor to operator. The era of passive payback is over. Previously, choosing a good location and following headquarters' SOP was enough to profit; now it's about localized operations. Community, membership, and the human touch and repurchase within three kilometers. In the same business district, a well-run store can double the performance of a poorly run one. Second, calculate with densification in mind. When evaluating opening or renewing, don't use current foot traffic to project returns; assume 1-2 competing stores (including same brand) will open within 500 meters in a year, and stress-test the single-store model with discounted traffic. If it survives the stress test, then invest. Also, don't skimp on area protection clauses that can be written into the contract. Third, follow format upgrades but don't be a free test field. The direction of full-category and money-saving supermarkets is right, but renovation means additional investment and category learning costs. Scrutinize headquarters' support policies. How much subsidy, how the margin structure changes, and the return mechanism for slow-moving goods. Calculate clearly before following. If the new store format works, it's an opportunity; if not, the cost shouldn't be borne entirely by franchisees. Fourth, manage cash flow and set stop-loss lines. With payback periods stretched to over two years, risk resistance is more important than profitability. Don't leverage to open stores, reserve at least 6 months of rent and labor costs, and set clear stop-loss exit criteria. In a downturn, surviving longer is more important than earning faster. Fifth, vote with your feet to pressure headquarters. Franchisees are not without leverage; renewal rates, second-store rates, and referral rates are the votes in franchisees' hands. Both leaders are already or about to be listed, so same-store data, closure rates, and franchisee profitability will be scrutinized in public reports. A healthy industry should have headquarters competing to treat franchisees better, not franchisees competing to endure longer.

In Conclusion

Bulk snack retail has covered in three years what traditional chains took a decade to achieve, and has compressed into three years the contradictions that traditional chains would face over a decade. The industry's greatest asset has never been supply chain or brand, but the trust of 40,000 franchisees who have staked their livelihoods on this system. The circulation efficiency revolution has already been won by bulk snack retail; the glory of listing has been or will be achieved by the two leaders. What remains to be answered is an older retail proposition: Can a business allow every link in the chain to survive?