---
title: "County Town Franchise Owners Are More Intense Than White-Collar Workers in Beijing, Shanghai, and Guangzhou"
description: "In 2023, 1.265 million catering businesses received their 'death certificates,' double the previous year. The intensity of competition in any industry can be quantified at the market's periphery. For example, in Tang County, Baoding, Hebei, there were three franchise stores of a milk tea brand a year ago, but now only one remains. If opening a small shop was once the dream start for many young people returning to their hometowns, it's now necessary to add a special reminder: don't be cannon fodder, and don't underestimate the complexity of county town commerce."
author: "戴菁"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2024-03-23"
language: "en"
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---

# County Town Franchise Owners Are More Intense Than White-Collar Workers in Beijing, Shanghai, and Guangzhou

> In 2023, 1.265 million catering businesses received their 'death certificates,' double the previous year. The intensity of competition in any industry can be quantified at the market's periphery. For example, in Tang County, Baoding, Hebei, there were three franchise stores of a milk tea brand a year ago, but now only one remains. If opening a small shop was once the dream start for many young people returning to their hometowns, it's now necessary to add a special reminder: don't be cannon fodder, and don't underestimate the complexity of county town commerce.

In 2023, 1.265 million catering businesses received their 'death certificates,' double the previous year.
**The cruelty and intensity of competition in any industry can be quantified at the market's periphery.** For example, in Tang County, Baoding, Hebei, there were three franchise stores of a milk tea brand a year ago, but now only one remains.
If opening a small shop was once the dream start for many young people returning to their hometowns, it's now necessary to add a special reminder: don't be cannon fodder, and don't underestimate the complexity of county town commerce.
From this perspective, Kang Wei, a small shop owner we recently met, is relatively lucky. After returning from a second-tier city to his hometown county in 2020, Kang Wei opened his first franchised store of Hehuo Shihui (a hotpot and BBQ ingredients chain). After three years of operation, he now owns four stores.
Behind this, Hehuo Shihui's store count exceeded 10,000 last year, making it one of the few members of the '10,000-store club' in China.
But Kang Wei's experience is not a story of luck in the 'era of 10,000 stores.' Through our conversation with Kang Wei, we tried to understand how a small-town youth seized opportunities with business acumen, and what management strategies are needed to survive in a county town business system composed of an acquaintance society.
Sam Walton, founder of Walmart, once said, 'If a small shop owner personally greets every customer, operates the cash register himself, and lets every resident in the community know how grateful he is, he establishes an irreplaceable competitive advantage that a giant business system like Walmart cannot replicate no matter how hard it tries.'
We also want to know if this applies in today's China.
**County Town Small Shops Are More Intense Than Beijing, Shanghai, and Guangzhou**
Kang Wei, a post-90s small shop owner, has a day more intense than white-collar workers in Beijing, Shanghai, and Guangzhou.
He leaves home at 8 a.m. to inspect stores, restock, unload goods, slice meat, cut vegetables, make deliveries, and take inventory. Wherever help is needed, the boss appears. After employees leave at 8 p.m., Kang Wei takes over and stays until 9 or 10 p.m.
In the offline world, the longer the store stays open, the more likely a sale is made. When he first opened his first store, he and his wife would go to nearby residential areas at 11 or 12 p.m. to distribute flyers. The next morning, residents might be reminded by the promotional flyers on their doorknobs and come to the store to buy something.
Hehuo Shihui, which Kang Wei franchises, is a chain brand focusing on community catering retail, known for hotpot and BBQ ingredients. Retail itself is a tough business, and Kang Wei understands this deeply. 'The industry's gross margin is not high; profits are watched closely,' he explains why he still personally handles everything even though he has four stores in the county.
In recent years, seeing capital-backed competitors open and close stores in the county, then another wave of people repeating similar fates, makes him dare not slack off in this small shop business. Kang Wei roughly calculated: with a gross margin of 25%, net profit is only about 10%; if he loosens his grip, profits might disappear.
Industry insiders have previously reminded that in catering franchising, those who truly make money are those who are dedicated to the business; those who invest money and become absentee owners find it hard to profit.
Kang Wei happens to be a dedicated person.
Since leaving the rural area of Tang County, Hebei, at age 16 to study, and later working around Beijing, Hengshui, and Baoding, he has worked as an employee, started businesses, set up street stalls, delivered gas tanks, and opened a Taobao store... He was willing to try any job that could make money.
His restless personality and whirlwind life allowed him to buy his first house in Hengshui early, providing some support for his later all-or-nothing entrepreneurial venture.
Because he was fully focused on his stores, he once posted a short video in August 2022 of himself strolling in the residential area, saying, 'I bought this house for the environment, but it's been almost a year, and I haven't walked around the neighborhood.'
Of course, small shops that can take root in county towns also require flexible business strategies.
Take location selection as an example: in retail, store location is a matter of life and death, full of business warfare philosophy. For instance, Starbucks always secures prime ground-floor spots in malls; Cotti, in the coffee down-market war, uses a follow-the-leader strategy by opening next to Luckin; in the expansion of new tea drinks, it's common to see three Mixue Bingcheng stores on a 1-kilometer pedestrian street, creating mutual 'momentum.'
Choosing a location based on the brand's target customers is wisdom. After signing as a franchisee in Tang County, the brand's location advisor suggested opening in a mall in the county center, citing high foot traffic and faster brand awareness.
But Kang Wei had his own ideas; he preferred a storefront on the county's main road. That shop was over 70 square meters, spacious, with convenient parking in front, and was the only one in the row without street trees or green belts blocking it. More importantly, it was close to the middle-to-high-end communities where the county's wealthy live. 'Being close to the community makes it easier to succeed.'
Another point: the rent was just over 60,000 yuan, 40,000 yuan less than the mall location, indirectly reducing entrepreneurial risk.
For Kang Wei, then 29, this venture was a gamble. Due to family changes, when he decided to franchise Hehuo Shihui, he and his wife had less than 10,000 yuan in cash. They borrowed to scrape together over 300,000 yuan for the startup costs. In spring 2020, the first Hehuo Shihui store in Tang County, Hebei, opened.
The young man was lucky. In the past few years, the demand for eating at home surged. In the third month, the store 'saw money.' Then the second, third, and fourth stores appeared.
During this process, competitors also arrived.
**Plain and Unadorned County Town Business Warfare**
In a county town's acquaintance society, through two people, you can almost know anyone. But this also means there are almost no business secrets in the county ecosystem.
Not long after Kang Wei's business started improving, a store selling similar hotpot and BBQ ingredients appeared nearby. Six months later, that store closed. Later, a boss opened multiple hotpot ingredient stores in the county at once, and Kang Wei was nervous for a while, but after six months, he found those stores had also closed.
Competitors came and went, and Kang Wei grew more confident. 'People might see long queues at the store and think, isn't it just buying a freezer, filling it with stuff, and selling? But behind it, there are too many things to test, like supply chain, inventory and shipping, sales ability. If any link goes wrong, you can't bear it.'
Looking back, Kang Wei believes his four stores have remained stable due to three key factors:
**First, the boss is hands-on. This is the core of a small shop business. Even big brands have closure rates; doing franchising well requires the boss to be 'dedicated.'** His competitors mostly hired others to watch the stores.
The benefit of the boss being hands-on is controlling service details: for example, considering that customers might bring children, Kang Wei provides probiotic drinks, balloons, and other giveaways, as well as children's shopping carts and aprons. He also requires staff to proactively ask customers if they will eat immediately upon returning home. If not, they should pack frozen and room-temperature items separately for easy storage, even though packaging costs a bit more.
Additionally, Kang Wei's stores provide disposable tablecloths, bowls and chopsticks, napkins, gloves for cleaning, and even garbage bags for leftovers, costing about one yuan in total. He hopes these details cultivate the idea that 'eating hotpot at home is also great.' If a delivery customer notes they need tableware for three, he carefully has staff add an extra pair of chopsticks just in case.
These service details are areas where operators need to think carefully.
**Second, the rapid upgrade of the brand's supply chain capabilities.** The first competitor often ran out of stock, causing some customers to return to Kang Wei's store. From customer complaints, Kang Wei guessed the competitor's supply chain, especially warehousing and distribution, might have shortcomings.
Hehuo Shihui's regional warehousing and distribution also went through an upgrade process. 'To be honest, if the company hadn't built large warehouses and cold chains then, we couldn't have gotten through those two years smoothly,' Kang Wei recalled. Initially, goods had to be picked up near the South Second Ring Road in Baoding city, where a 13-meter-long refrigerated trailer would park, and franchisees from various counties had to wait to unload and sort, then haul their orders back to their stores, taking a whole day round trip.
Later, the company increased warehouse coverage density, and goods could be delivered to the county highway exit. Starting in 2022, Hehuo Shihui's self-built logistics network could deliver goods directly to stores, with same-day ordering and next-day delivery.
When Kang Wei's small shop faced external competition, the brand's supply chain capability undoubtedly provided 'ammunition.' Last August, after learning another new brand was about to open nearby, Kang Wei communicated with the company and urgently launched a grand 'store anniversary' event. One of the foundations of this event was the company's next-day delivery capability.
At that time, Kang Wei's store had enough stock for more than three days of normal sales. But after estimating, he found that with the event's promotional intensity, the stock might be far from sufficient. Indeed, on the anniversary day, sales reached four to five times the usual daily sales.
After discussing the plan with the company, the goods he needed arrived the next day, and the event was a complete success. The competitor was forced to postpone its opening.
Of course, plain business warfare is just an interlude.
Whether a small shop can take root in a county town also requires a third point: **products that can compete and standardized service.**
'The product depth of a small shop must be deep enough, otherwise it can't survive. For example, for hotpot ingredients, meatballs must be tastier than similar products in supermarkets,' Kang Wei mentioned. Hehuo Shihui stores have a best-selling product, 'sprinkled beef balls,' and many customers stock up several bags at a time; some even fill their shopping baskets. Customers tell him, 'Your meatballs taste different from outside.'
Kang Wei himself became a franchisee after tasting delicious curry hotpot meatballs in a rented house in Baoding.
After becoming a franchisee, he found everyone was co-building product strength with Hehuo Shihui. For example, a meatball produced by Hehuo Shihui's own factory, which he tried and found not tasty, he directly reported to the company. Since other franchisees had similar feedback, the company quickly redeveloped and adjusted the product.
This attitude toward products makes Kang Wei feel at ease, and it's the trust foundation for his confident opening of the second, third, and fourth stores.
With more stores, effective management becomes a required course. Last year, Du Qianqian, general manager of Hehuo Shihui's Hebei region, organized dozens of franchisees in the province for a 'study tour' in Henan, and Kang Wei was among them. The biggest takeaway for Kang Wei was the role of standardized service in multi-store management.
'I always thought our kitchen was clean, but after visiting stores in Henan, I knew what 'tidy' meant. The kitchens of large franchisees in Henan were both clean and orderly, and every store had the same standard.'
After returning from Henan, Kang Wei also promoted his own standardization project. In his view, standardization not only reduces management difficulty but also allows consumers to experience consistent service across different stores, truly recognizing you as a 'brand.'
To this end, he recorded dozens of short videos himself, covering everything from restocking to display, from greeting to guiding to checkout, with standardized explanations. Kang Wei told us this content is not yet complete, but once finished, it will become the onboarding tutorial for all his stores.
**Small Shops Need a 'Circle of Friends'**
In the process of being 'dedicated,' small shops can make friends with county customers.
'County towns are not like Beijing; the cost of gaining trust is lower. Customers might chat with the store manager after buying, but in Beijing, Shanghai, and Guangzhou, everyone is busy; who knows who?'
A young couple were Kang Wei's first customers. He witnessed their journey from dating to marriage and having children. Now their child is in kindergarten and bounces into the store, calling Kang Wei 'uncle.' This couple is interesting: even though there's another Hehuo Shihui store near their home, they habitually come to Kang Wei's first store to shop and chat with him.
There's also a regular customer who often travels for business. Sometimes he returns to the county at 1:30 a.m. and wants to eat hotpot at home. A phone call is enough, and then he waits outside the store for Kang Wei to open up.
Young people working at KTVs order after getting off at midnight, even if it's only 30 to 50 yuan—far below Hehuo Shihui's average order value—Kang Wei will deliver by car. When he noticed a customer was pregnant, he proactively told her she could send a WeChat message if she had difficulty moving, and staff would deliver for free.
Many times, he and his staff double as delivery drivers, especially for orders from the brand's online mall. 'Using a courier for one order is too expensive; a small shop can't afford it.' Fortunately, Tang County's main urban area isn't large, only about 5 kilometers from east to west.
On how to make friends with customers, Kang Wei has his own insights: 'The store doesn't need to sell customers more things, but just the right amount.'
He's recently been planning to free up part of the front hall of his first store to create a culture wall. **'No matter how small the business, to last long, you need your own culture.'**
Photos of the team with regular customers, warm family gatherings, and joyful group meals—these memories linked to food through Hehuo Shihui will be frozen on the culture wall, becoming emotional connections between Kang Wei and his customers. He even plans to register a short video account to spontaneously record stories between the Hehuo Shihui brand and customers, and share the latest product and store updates.
Besides connecting with customers, Kang Wei also uses the small shop's 'corporate culture' to motivate himself and build closer relationships with staff. On the kitchen wall of the Tangyao Road store, Kang Wei made a photo wall with images recording his journey from starting out to now with Hehuo Shihui.
'This is a screenshot from a video taken when the first store just opened. It was already past 11 p.m., and my wife and I closed the store and went to distribute flyers in the nearby community. The pressure was high then; I wanted to make a video to encourage us,' Kang Wei said, pointing to the first photo.
The photos on this wall witness the growth of Kang Wei's business, serve as an emotional bond between him and the Hehuo Shihui brand, and are a window to convey his business philosophy.
Kang Wei told us, 'In county towns, recruitment is important. We used to lose people; often, just as they became skilled, they'd leave. Now, every new employee must undergo culture training, at least to make them recognize you, so you can cooperate longer.'
However, compared to big cities, opening a store in a county town has one obvious constraint: the overall growth space is relatively smaller. With the rise of live-stream e-commerce, even small shop owners focused on offline have to think about using online operations to drive offline traffic.
Kang Wei started selling Hehuo Shihui products through Douyin as early as 2021, with a format of setting up a pot in front of the camera and cooking meatballs and tripe. In one live stream, he sold over a hundred group-buying deals, with a redemption rate of 70%. Recently, he plans to increase investment, hoping to find new business growth and more store exposure through online channels.
With the certainty brought by operating four stores, he's seriously considering the feasibility of settling in the county town and has bought a house for this purpose.
**An Alternative Rise of a Small-Town Youth**
Without the family changes and the subsequent franchise opportunity, Kang Wei probably wouldn't have returned to the county town.
He grew up in the countryside with his grandparents and had a strong desire to 'go out.' His original goal was to settle in a second- or third-tier city in Hebei; he wasn't particularly interested in Beijing, Shanghai, Guangzhou, or county towns.
After graduating, Kang Wei joined a photovoltaic company and bought a house and got married in Hengshui. Around 2018, he bought a second house based on his intuition about the property market.
Later, he transitioned to a partnership in a real estate agency and met some clients buying houses who had returned from Beijing. Their requirements were high. Most were excellent people who had worked hard in Beijing for years, with decent jobs and savings, but without Beijing hukou, their children had to return to their hometowns for school, so they needed to buy houses.
This made Kang Wei more certain of his goal: 'Being able to live in a second- or third-tier city is good enough.'
He hadn't considered county towns. Objectively, resources and opportunities in county towns are stratified: those with strong academic credentials or family connections can squeeze into the administrative system; the next option is public institutions; then those with family wealth can do small business. For ordinary small-town youth, opportunities are the thinnest.
One of Kang Wei's classmates, who worked as a after-sales technician in a southern city earning 12,000 yuan a month, returned to the county and found similar work paying only 4,000-5,000 yuan. 'Young people don't want to stay in county towns.'
The turning point came in 2019. That year, an elderly family member fell ill. To care for them, Kang Wei withdrew from his budding partnership and moved from Hengshui to Baoding, closer to his hometown. To treat the illness, they spent all their savings and sold their properties.
The family changes plunged Kang Wei into a low point in life and made him despondent. Later, his wife bought Hehuo Shihui products downstairs and cooked hotpot at home. Kang Wei tasted it and found it delicious. His wife casually asked if he wanted to go downstairs to check it out, but Kang Wei refused; he was afraid of spending money—that year, they had spent too much.
With his wife's insistence, Kang Wei went to that store. As soon as he pushed open the door, he was inexplicably moved by the warm decor and lighting inside.
'Even now, every time I walk into my store, I recall that feeling and get goosebumps,' Kang Wei recalled.
The gears of fate began to turn from then on. Kang Wei persuaded his wife, and they moved all their belongings back to the county town to start their own business.
Although he occasionally complains about being out of place in the county—like talking about coffee in the county, where people think you're pretentious; the streets are empty by 9 or 10 p.m.; clothes bought in second- and third-tier cities look a bit odd in the county; classmates who returned from big cities already talk about 'retirement life'—he also admits that his struggle in the county has given him a new fulcrum in life.
This also shows us that behind the capital dream of catering and retail brands rushing to 10,000 stores and pursuing billion-dollar valuations, it's the instinct of small franchisees carefully guarding their livelihood that quietly plays a boosting role.
During our conversation, Kang Wei mentioned he's recently reading a book about 'self-drive.' In his fourth year of business, he pays more attention to products, company operations training, and the essence of retail.
Attention to the essence of retail is transmitted layer by layer. For example, he learned from a meatball supplier that removing a large outer packaging bag from small packages could save a few yuan. Given the large shipping volume, this could save a significant cost.
**Under the trend of low-price consumption, these efforts to return to the essence will ultimately bring more room for terminal stores.**
According to his plan, after establishing a firm foothold in the county, Kang Wei is ready to seek bigger opportunities. 'I'll try; worst case, I'll stay in the county.'
_PS: Click **Read Original** to view more highlights of the 9th China FMCG Innovation Conference and the 2nd China FMCG Hard Discount Conference & the 2nd China FMCG Distributor Conference..._


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