From traffic formulas to profit and loss algorithms, from franchising fraud prevention to anti-chicken soup failure learning, three new additions are added: brand first iron law / technology ≠ business framework / category life cycle analogy method.
01
Model·Flow formula
The starting point for all dining issues
Sales = Customer flow × Exposure rate × Customer unit price
This is the basic formula used by Yongge to analyze all catering issues. All problems can be attributed to a problem with one of these three variables.
passenger flow =
How much does each person spend on average?
Exposure store entry rate = How many passers-by will walk in (depending on the door/signboard/display surface/category attractiveness)
Price per customer =
How much does each person spend on average?
Yongge divides the catering business into two traffic models:
- Traffic business (Milk tea/snacks/fast food/coffee): Relying on high natural passenger flow, different people need to pass through the door every day. It must be on the main street on the first floor and the display area must be full. Suitable for night markets/pedestrian streets/school entrances/factory entrances.
- community business (Noodle shop/cooked food/braised food/stir-fried vegetables/barbecue): serving a fixed group of people in the surrounding area, relying on repeat purchases and word-of-mouth. There is no need for high traffic, but the population density of the community needs to be sufficient - at least 1,500 households in the community can be supported. Suitable for community businesses.
core red line
Opening traffic business categories in the community = doomed. Opening a community business in a place with no permanent population = doomed.
"It's winter in the Northeast and people tell you to pick up the whole fruit and add more ice - oh my god, how perverted is this. Logically speaking, do you think it's true?"
02
Model · Site selection on the third floor
Three-tier method for site selection
Site selection is not about whether there are too many people or not. It is judged step by step from three levels:
- macro level: What business district? If there are not at least 3 restaurants within a 500-meter radius, don’t be the first to eat crabs
- mesocosm: Where is the store located on the moving line? (Head/waist/tail) Are there any points where the flow is intercepted/divided?
- microscopic layer: Can a signboard be hung on the display area? Is the doorway blocked? On the first floor or the second floor? Is the door width enough?
"A place with a lot of people doesn't mean it's a good place. You're just a typical piece of rubbish. With a location like this, the King of Heaven will lose even if he comes here. If you look at him one more time, you'll lose."
03
Model · Profit and Loss Algorithm
break-even point algorithm
Breakeven point = daily fixed costs ÷ gross profit margin
This is Yongge’s core diagnostic tool. Each case must first be calculated:
Daily fixed cost = daily rent (monthly rent ÷ 30) + daily labor (monthly labor ÷ 30) + daily water and electricity
Breakeven point = daily fixed costs ÷ gross profit margin
Advanced formula：
- Real monthly rent in university business district = annual rent ÷ 8 (the University Store only does business for 8 months a year)
- Human efficiency = Daily turnover ÷ Number of employees (standard: fast food ≥ 800, dinner ≥ 500, less than 300 means too many people)
- Payback cycle = Total cost of building a store ÷ Expected monthly net profit (>18 months = high risk, >24 months = not recommended)
"187 rooms × 70% occupancy rate...you can't even reach the break-even point. This store of yours is not a coffee shop. You bought it with 330,000 yuan to teach you a lesson."
04
Model·Join anti-fraud system
Yongge is not completely negative about joining - those with real brand power such as Mixue and Luckin can join. But 90% of franchising is harvesting.
Three Questions to Join in Anti-Fraud (Quick Screening)
| question |
Qualified answer |
Dangerous answer |
| Can I find the franchise registration on the official website/Ministry of Commerce? |
Yes, there is an official registration number |
Can't find / Not registered / "Processing" |
| Does the headquarters have a physical store? Can I go see it at any time? |
There are at least 2 directly operated stores, operating for more than 1 year, available for viewing at any time |
Only office model room / not allowed to see / "under renovation" |
| How many franchise stores are there in the local area? Can I contact the franchisee directly? |
There are many local ones, you can contact them randomly (not designated by the headquarters) |
0 local companies / only to the designated contact person (may be a trustee) |
iron law
As long as one of the three questions is unqualified = there is no doubt that you will be recruited quickly and you will definitely not be able to join.
Copycat Brand Identification Method (New)
There are a large number of copycat brands with "names that are not big names" in the new cases. Identification method:
| Authentic |
Copycat/edge brands |
identification point |
| Overlord Chagee |
A certain "tea girl" brand |
They have the same word in their names and are visually similar. |
| Jasmine milk white |
Molan Mountain/Mozhilan |
The word "Mo" starts with the word "Mo", and the color scheme is similar. |
| Chaoyixing |
Jucheng Chaoyixing |
Add modifiers before/after the original name |
| Jasmine yogurt |
A silent adventure |
The name is similar but the official website cannot be found |
| Mixue Ice City |
Honey Orange Love/Mixue XX |
Starting with the word "mi", get the traffic of "Mixue" |
Copycat Brands = Predatory Franchise Evolution
Not satisfied with just copying the concept, they directly imitated the big name in the copycat name. When consumers see the name at the door, they will think it is that big brand → when they come in, they find it is not → they will not come again → it is completely based on a one-time interception of traffic. This kind of brand will not be repurchased, nor can it gain reputation - because what they are betting on is"Everyone who passes by will only be fooled once."。
"Food, accommodation, education and club included" training scam (new)
Low price to attract traffic → on-site price increase mode:
- first step: Douyin/Kuaishou launches an advertisement for "888 yuan includes food, accommodation, education and entertainment"
- Step 2: After arriving at the site → the technical fee becomes 29,800, add 5,000 deposit, and add 40,000 to buy raw materials and equipment
- Step 3: It only teaches ordinary recipes (you can buy better ones online for 10,000 yuan)
- Step 4: There will be no operational support in the later stage.
feature
Any advertisement that says "food and lodging included" is 100% a scam. Formal training would not use such gimmicks.
Three questions to ask if you are defrauded when changing stores (new)
A new model appears in the new cases that specializes in "shopping scams":
- Douyin/Kuaishou posted re-store advertisements, claiming "daily sales of 1,000+" and "monthly income of 20,000"
- After the victim took over, he discovered that the actual daily sales were 100-300 yuan.
- The transferor and the introducer are suspected of collusion (friend introduction + friend looking for a location + friend exiting after the store transfer is completed)
Three questions for store transfer verification：
- Can you watch the other party's backstage flow? (Meituan/Ele.me backstage, not verbal numbers)
- Stay at least 3 days (working days + weekends + day + night), actual head count
- Why did the transferor transfer? ("Go back to my hometown" = excuse, "not making money" is the truth, ask the owner of the store next door)
"There was someone two or three years ago, but what does that have to do with you? Why didn't you talk about the Qing Dynasty and the Tang Dynasty? Go and check here now to see if there is anyone there now."
Four-step harvesting method for quick recruitment companies
Yongge summarized the standard operating procedures of Kuai Zhao Company from hundreds of defrauded cases:
The first step · interception +
Use big names——Place advertisements on Baidu/Douyin/Xiaohongshu to intercept people who want to join big brands. Words: "Tustin is saturated" "Mixue is closed here, but we are their sub-brand" "Dex has no market, this is the second generation upgraded brand of Dicos".
Step 2 · On-site signing +
Cooperation——Make an appointment at the model room of the headquarters office building (no physical store). There was a trust at the scene - "Just now, someone signed up two district agents at once." Create a sense of urgency - "If you don't sign, others will sign" and "It's the last few days." I would even call the next day: "Congratulations on signing yesterday, otherwise you would be gone if you came today."
Step 3·Second Harvest—Recommendation Agent——After signing the franchise and receiving the first payment, immediately promote regional agents. "Add RMB 30,000 to become an agent now, and you will get 70% when others join your area in the future.
Franchise fee". In fact, no one will join at all - because the brand has zero visibility in the local area.
Step 4 · Site selection and harvesting +
shirking responsibility——The headquarters sent a “site selection teacher” to select the location—deliberately choosing it opposite/next to the brand store. The site selection teacher gets a kickback (the rent is higher and the difference is paid). The store is losing money→Headquarters: "It's your business problem." Victims' rights protection → The headquarters has canceled the legal person, replaced the scapegoat, and the contract is full of loopholes.
Classic case
Mampton Burger lost 900,000 yuan in 6 days - "Have you ever thought that you went to an entertainment company? Someone at the scene signed up two district agents at once. Isn't that obviously a scam? You made 50 yuan in this single business
For tens of thousands of dollars, a person is specially prepared to be there to stabilize you, be friends with you, and make video calls every day, for fear that you will regret it midway. "
"0 Yuan Join" Trap
0 franchise fee is the most expensive franchise. Dismantling of hidden charges: tuition fee 9800-19800 + management fee 3500-5000/year + equipment price difference (market 10,000-20,000, recommended 4-5
10,000 "second-hand equipment") + material prices are falsely high by 2-3 times + site selection fees are charged separately. The total hidden charges are often 2-3 times higher than the explicitly stated franchise fee.
"Long-term care" - the most advanced scam
The quick recruitment company will arrange for a person to be friends with the victim: make video calls every day and pretend to care; post the "decoration progress" of his store (fake); share "daily revenue data" (fake). Purpose: To delay the contract rescission period/cooling-off period, so that you lose the window for rights protection."You alone have earned a lot of money.
More than 500,000 yuan, someone is specially prepared to be there to stabilize you. "
"Did you ever feel that you were going to an entertainment company? Someone at the scene signed up two district agents at once. Isn't that obviously a scam?"
05
Model · Cognitive differences
cognitive difference theory
Yongge’s definition of “cognition”:The ability to see through the gap between "what others want you to see" and "what is really happening"。
Typical manifestations of low cognition：
- I didn't even calculate the gross profit margin when opening a store - "What kind of store do you want to open? How can you open it if you don't even know what the gross profit margin is?"
- "I only know what it is, but I don't know why." - I know there are many people here but I don't know why there are so many people.
- Spending hundreds of thousands on building a store without blinking an eye, but spending 4,000 yuan on promotion is heartbreaking.
- Ask a franchisee "Is the business good?" If someone says "yes" you will believe them - "Either they are stupid, they want to harm you, or they are asking for help."
- All data are "approximately" and "approximately" - "More than a million have been defeated by you and defeated by your cognition."
- The first store didn't make any money, so I thought there weren't enough people, so I wanted to open a second, bigger one - "You opened one and you didn't make any money, why did you open a second one?"
Ways to improve cognition：
- First work in a chain catering company for a few months (get paid to learn skills)
- Go to various business districts and stores to eat and see, and find out why people’s business is good
- Squatting - not standing for a few minutes and then walking away, but squatting from morning to night, on weekdays and weekends
- "Failure is not the stepping stone to success, but success is the stepping stone to success."
"We are spending money like a madman on building stores, and we are messing around with operations - this is a cognitive problem."
06
Model · Failure Learning
Anti-Chicken Soup Failure Learning
Yongge is the most anti-chicken soup person in the catering industry. His view of failure:
- "A lot of your efforts are meaningless." - Efforts in the wrong direction are accelerating losses.
- "Panhuo is not a matter of whether you think about it or not. This is not up to you."
- "Turn it off first, stop it. Dismiss these waiters first."
- "It was dead when you opened this store, but it's just buried now."
Signs not to persist (Stop loss if any 2 conditions are met):
- Consecutive losses for more than 6 months with no improvement in trend
- All surrounding competing products are losing money/transferring
- Tried at least 3 different improvement options to no avail
- The individual is already in debt and has no external financial support
- "You don't even know where you are losing" - this is the most dangerous thing
07
Model·Growth path
The growth path from running a food cart / food cart / stall to opening a store
Stall → Small shop → Copy and enlarge
correct path：
Booth practice (verify products + accumulate funds)
↓ Stable monthly income >10,000 and lasting for more than 3 months
Small store (verification model, investment <80,000, break-even point <500 yuan/day)
↓ Continuously profitable for more than 6 months, return on investment
Copy and enlarge (second store, same standardized operation)
↓ Don’t open more than two at the same time, keep one before doing the next one
Wrong path – the one most people take：
I made money by running a food cart / food cart / stall → Rent a large shop → Invest 300,000-500,000 yuan in decoration
→ Open for business → Discover that it’s completely different → Lose money
"Earn the first pot of gold in your life first. Don't think you know how to open a store after making some money by running a food cart / food cart / stall."
08
Model · New · Brand First
The iron law of brand first
"Milk tea is not product first, but brand first."
This is a core rule that Yongge has repeatedly emphasized but failed to summarize before. Applicable to Milk tea, coffee, fast food Highly branded categories:
- Consumers are not “I want to drink milk tea → go shopping → see which one tastes better”
- The consumer is "I want to drink Mixue Bingcheng/Bawang Chaji/Luckin"
- If your store is not on the brand list in their mind = you don’t exist at all.
Brand power =
The ability to "enter the store as soon as the door is hung up". When it comes to opening a branded milk tea shop, Mixue/Bawang/Cha Baidao are already occupying the local market. No matter how good the products are, no-name brands will have no brand power. Consumers won’t choose you because you are “tastier” – because they don’t know you exist.
The survival rules of brand-first categories
Either join A head with real brand power, or change the category and do something that does not require brand power (just need catering-noodle shop, fried rice, fast food).
09
Model · New · Craft ≠ Business
Technology ≠ business framework
"In villages and towns, craftsmanship is business. In cities, craftsmanship is just the foundation."
County/township logic: The food is delicious → spread by word of mouth → business will come naturally (craft = business)
City/Business District Logic: Tasty food is just the ticket, it also requires a good location + traffic + good management skills + understanding of promotion + good management of people
Typical cases
The couple started a cooking business in the township and earned 20 RMB in 6 years.
30,000 RMB/year → Buy a house in the city → Want to open a self-service barbecue in the city——"The two of you made money by cooking Chinese food in a small town, and then went to the big city to start a big catering business - if you have good craftsmanship, you can make it. One is a model where crafts = business, and the other is a model where craftsmanship is just the foundation."
Entrepreneurs who move from towns/counties to big cities must realize that the capability model has completely changed. You cannot use "the food I cook is delicious" as the reason for "I will definitely make money".
10
Model · New · Category Cycle
Category life cycle analogy
"Almost all the roast duck restaurants have closed down. The beef rib buffet barbecue is definitely not here."
Yongge has a unique way of reasoning: use a Compare known dead categories to predict new categories. Core logic:
- Single ingredient/single SKU as a specialty store → will die as soon as the popularity is over
- However, the same category can survive for a long time as a single product in large stores/general stores.
- Example: The Maocai duck specialty store → is dead, but the Maocai restaurant adds a roast duck SKU → is alive and well
- Example: Beef rib self-service specialty store → It will die, but adding beef ribs to a traditional barbecue restaurant → There is long-term demand
Judgment logic
Ask "Has there been anything similar in this category three years ago?" → If so, find the one that is most similar → See how it ends → There is a high probability that it will be the future of the new category.
"When tariffs come up, the cost of imported beef will inevitably rise, and your gross profit margin will be compressed - the category logic doesn't hold water."