In-depth Analysis of Franchisee Food Safety Issues and Channel Management Capabilities of Ziyan Food

According to recent news reports, Ziyan Food encountered a severe food safety trust crisis in December 2024. A review blogger conducted quality and safety tests on Ziyan Baiwei Chicken products and found that 5 samples exceeded the coliform bacteria limit, with the highest exceeding the national standard by 290 times [1]. More seriously, on December 24, 2024, a consumer in Qidong City, Nantong, Jiangsu Province posted a video exposing a clerk stealing beef during sales, which attracted widespread attention [2]. In response, Ziyan Food issued an apology statement on December 25, 2025, acknowledging management loopholes and launching rectification measures.

These food safety incidents are not accidental. Ziyan Food has received more than 600 complaints on the Black Cat Complaint Platform, reflecting systematic problems in terminal store management [1].

From the perspective of single-store revenue data, Ziyan Food is facing severe growth bottlenecks. Data shows that Ziyan Food’s single-store revenue has declined year-on-year for 7 consecutive quarters, which is in sharp contrast to competitors such as Juewei Food and Huangshanghuang [1]. According to the prospectus data, the single-store revenue of Ziyan’s franchise stores is about 660,000 yuan/year (estimated at a 65% purchase discount, the terminal single-store sales are about 1.02 million yuan/year), while Juewei Food’s franchise single-store revenue is about 430,000 yuan/year [3]. However, this once advantage is being eroded.

More importantly, the growth of Ziyan Food’s store count has slowed significantly. From 2019 to 2022, Ziyan Food’s stores increased by an average of more than 600 net new stores annually, but the expansion rate slowed significantly from 2023 to 2025, and even showed negative growth. As of December 15, 2025, the number of Ziyan Baiwei Chicken stores was 5,144, a significant decrease from 6,308 as of June 30, 2024 [4].

Ziyan Food adopts a secondary distribution model of “Company - Distributor - Franchise Store”, which is essentially different from the “Company - Franchisee” primary model adopted by Juewei Food [3].

• Ziyan Food sells products to distributors, who then sell to terminal franchise stores
• The company does not have direct control over distributors and their terminal franchise stores
• The top five customers (distributors) account for 62.11% of sales, while this proportion is only 3.44% for Juewei Food [3]

1. Overly Long Management Chain
   : The company’s management power over terminal stores is severely weakened, and it cannot directly control daily store operations
2. Excessive Interest Binding
   : Many distributors are immediate relatives of the company’s actual controllers, and interest associations may affect management execution
3. Ununified Training Standards
   : The quality of store personnel and operation standards are uneven, leading to frequent irregular operation problems

As industry analysts point out, most of Ziyan Baiwei Chicken’s franchise stores are operated by recruited store managers and salespersons, with uneven personnel levels and frequent irregular operation problems [5].

From the financial data, Ziyan Food achieved operating revenue of 3.363 billion yuan in 2024, a year-on-year decrease of 5.28%, but the net profit attributable to parent company was 346 million yuan, a year-on-year increase of 4.50% [6]. This situation of “declining revenue and growing profit” reflects the company’s efforts on the cost side, but also exposes the problem of insufficient growth momentum.

• First Three Quarters of 2025
  : Ziyan Food’s revenue fell 6.43% year-on-year to 2.514 billion yuan, and net profit fell 44.21% year-on-year to 248 million yuan [4]
• Declining Profitability
  : Gross profit margin decreased from 24.5% in 2023 to 22.2% in the first half of 2025 [1]
• High Short-term Liabilities
  : As of the end of the third quarter of 2025, the company’s short-term loans more than doubled year-on-year to 950 million yuan, and the asset-liability ratio increased from 26.5% in 2022 to 48.4% [1]

Indicator Dimension	Ziyan Food	Juewei Food	Analysis
Sales Model	Secondary Distribution (Company-Distributor-Store)	Primary Franchise (Company-Franchisee)	Ziyan has a longer management chain
Single-store Revenue	About 660k yuan/year (historical data)	About 430k yuan/year (historical data)	Ziyan once had an advantage but it is declining
Store Control	Distributor-led	Company direct management	Juewei’s control is more direct and effective
Top 5 Customers Share	62.11%	3.44%	Ziyan relies more on large distributors
Expansion Speed	Significantly slowed down in 2023-2025	Maintained rapid expansion	Juewei has more expansion momentum

Although Ziyan Food’s distribution model reduces operating costs and management complexity in the short term, it sacrifices control over terminals. When the number of stores exceeds a certain scale, the drawbacks of this model become apparent: the company cannot maintain a high frequency of store inspections, and it is inevitable that some distributors fail to manage stores in accordance with cooperation agreements [4].

From 2019 to 2022, Ziyan Food added more than 600 net new stores annually, and this rapid expansion diluted management resources. The more stores there are, the more difficult it is to control food quality and safety issues [5]. Although the company acknowledged this risk in its prospectus, expansion pressure makes it difficult for management improvement measures to keep up with the pace of store growth.

According to reports, the salaries of Ziyan Baiwei Chicken employees have decreased compared with four years ago, and the low salary level makes it difficult to ensure employee quality, which is also an important cause of frequent food safety issues [1].

Although Ziyan Food claims that information management and supply chain construction are forward-looking in line with the pace of store expansion, from the actual effect, the application of modern management methods such as store monitoring, unified cash register systems, and joint sales systems is still insufficient [5].

In response to recent food safety incidents, Ziyan Food has taken the following measures:

• Immediately terminate the labor relationship with the involved clerk
• Issue warnings to stores nationwide about service norms and operation standards
• Provide tenfold cash compensation and a 1000-yuan consumption card to the consumer who pointed out the problem
• Provide compensation feedback to customers who consumed at the involved store during the period [2]

However, industry analysts believe that the challenges faced by Ziyan Food are not limited to the food safety incidents themselves. In terms of product structure, 85% of Ziyan’s SKUs overlap with ST Juewei and Zhou Hei Ya, lacking differentiated hit products; in terms of pricing strategy, the cost-performance advantage is weakened when the average customer price exceeds 40 yuan; in terms of channel iteration, snack量贩 stores and membership stores use braised food as a引流 product, with prices lower than Ziyan’s ex-factory price [1].

Analysts such as Bai Wenxi pointed out that Ziyan Food still has opportunities in the braised food track, but the window period is only 2-3 years. The company must achieve the following by the end of 2026: restore net growth in store count, achieve break-even in overseas business, and stop the decline in single-store revenue; otherwise, the dual labels of “family business + declining performance” will keep its valuation lower than peers for a long time [1].

The frequent food safety issues of Ziyan Food are not isolated incidents, but a concentrated reflection of the contradictions between its secondary distribution model, rapid expansion strategy, and channel management capabilities. Compared with Juewei Food, Ziyan Food has obvious shortcomings in channel management depth and terminal control. Problems such as continuous decline in single-store revenue for 7 quarters, negative growth in store count, and high short-term liabilities all reflect that the company needs fundamental changes in channel construction and management upgrading.

For investors, the challenges faced by Ziyan Food are systematic and cannot be solved by a single measure in the short term. Whether the company’s rectification measures can be effectively implemented and whether its channel management capabilities can be substantially improved will be the key factors determining its future development trajectory.

[1] Sina Finance - “Ziyan Food ‘Managed by Son-in-law’, How Can the Old Braised Food Brand Regain Dignity Amid Insider Selling?” (https://finance.sina.com.cn/stock/s/2025-12-25/doc-inhczhsi3521155.shtml)

[2] Guancha.cn - “Ziyan Baiwei Chicken Apologizes” (https://www.guancha.cn/economy/2025_12_25_801682.shtml)

[3] Eastmoney.com - “Braised Food Chain Research: Juewei & Ziyan Comparison” (https://pdf.dfcfw.com/pdf/H3_AP202109281519096570_1.pdf)

[4] Southern Metropolis Daily - “Clerk Steals Customer’s Beef! Ziyan Food Apologizes” (https://www.nfnews.com/content/5ypplBGKyp.html)

[5] CBNData - “Rats Crawl into Food Cabinets, Ziyan Baiwei Chicken and Others Still Make Money Quietly” (https://www.cbndata.com/information/203454)

[6] The Paper - “Ziyan Food’s Net Profit Grew Against the Trend in 2024, Overseas Market Results Initially Appear” (https://m.bjnews.com.cn/detail/1744968460168774.html)

[7] Caifuhao - “‘Unmanageable’ Distributors Are ‘Eroding’ Ziyan Baiwei Chicken?” (https://caifuhao.eastmoney.com/news/20251226152150944038550)