Analysis of Challenges to Food Safety Control in Laoxiangji's Franchise Expansion Model

Based on the searched industry information, I analyze the challenges to food safety control in Laoxiangji’s franchise expansion model for you:

According to a report by Economic Daily, the franchise model in the current fast food industry has an issue of imbalanced rights and responsibilities between brands and franchisees: some brands shift food safety responsibilities to franchisees, only using ‘regular inspections’ to cope with supervision, turning the back kitchens of franchise stores into ‘gray areas’ for food safety [1].

The case of Yang Guofu Malatang shows that industry analyst Zhu Danpeng points out that the core reason for frequent food safety issues is that some franchisees, in order to save costs, do not fully implement personnel management training and process standardization [2].

• Franchisees may cut corners at every step in ingredient procurement to reduce costs
• Potential risk of selling spoiled ingredients after ‘repackaging’
• Issue of inconsistent supplier selection standards

• Lax implementation of employee health certificate system
• Inadequate food safety training
• Lack of effective supervision over the implementation of hygiene standards

• Uneven operational standards across stores
• Inconsistent implementation of ingredient storage and processing standards
• Lack of a unified operational monitoring mechanism

According to reports, industry experts propose the following solutions [1]:

• Establish end-to-end control mechanisms and abandon the ‘franchise equals exemption’ mindset
• Use central kitchens to uniformly distribute main ingredients, cutting off franchisees’ channels for unauthorized purchase of inferior raw materials
• Use IoT technology to monitor back kitchen operations and ensure compliance with operational standards
• Implement ‘zero tolerance’ for non-compliant stores, establish a franchisee blacklist, and make it public

• Clearly recognize themselves as the primary responsible party for food safety
• Strictly screen suppliers and retain traceability certificates
• Regularly conduct food safety training and assessments
• Introduce transparent measures like ‘Bright Kitchen and Bright Stove’

• Food delivery platforms should use big data to build risk early warning systems
• Implement traffic restrictions or delisting for merchants with high-frequency complaints
• Crack down on fake positive reviews, allowing negative reviews to truly play a role in market elimination

As a Chinese fast food brand, Laoxiangji’s core challenge during franchise expansion is how to balance rapid expansion with food safety control. Brands need to establish stricter end-to-end management systems, including unified ingredient distribution, technical monitoring tools, and personnel training systems, to ensure the sustainability of franchise expansion.

[1] Economic Daily - “Food Safety Bottom Line Cannot Be Broken” (http://www.ce.cn/cysc/sp/info/202503/25/t20250325_39329726.shtml)

[2] Jiemian News - “Yang Guofu Malatang’s Hong Kong IPO Concerns: Rising Through Franchises, Unable to Hide Food Safety Risks” (https://www.jiemian.com/article/8280085.html)