The Great Chain Revolution 2026: The Post-10,000-Store Era, The Endgame Is Not Yet

Ten-thousand-Store Camp, the Shuffle Begins

The world we live in has been so fast-changing lately. Every day, we’re discussing what’s hot, who got exposed as a fraud, and we’re catching every tiny shift in a collective FOMO. But if we pull our gaze back and step beyond the present moment and individual people, we’ll find that what seemed unchanged is already moving toward consolidation—like swift rivers rushing through valleys, ultimately flowing into a vast and deep ocean.

Division must lead to unity—this is the big trend in business. Disputes will inevitably move toward consolidation, and chaos will inevitably move toward order. That is exactly how today’s domestic foodservice landscape is.

In 2017, the first restaurant chain in China to break the 10,000-store mark finally appeared—Zhengxin Fried Chicken. After that, as digital infrastructure improved, restaurant brands began a frenzy of chasing scale. Zhengxin Fried Chicken took 17 years to reach 10,000 stores, while the fastest in the new batch of 10,000-store brands is CooDee, taking just 2 years. Only last year alone, four brands (Tastino, Luckin Coffee, NuoWa Coffee, Guying Tea) were promoted to become new kings of the 10,000-store club. At the same time, within the 10,000-store camp, Luckin Coffee fought its way into the 30,000-store tier, and Mixue Bingcheng reached the 40,000-store tier. They’ve been seeping into the gaps of the vast system of “cities–counties–townships” at a rate of about 1 store per hour, taking over business districts and street corners.

At the height of the fiercest fighting, you could squeeze seven or eight different milk tea shops onto the same street, and netizens joked, “Is it that thirsty people died from it?” Back then, those “milk tea streets” were standard in business districts, scenic spots, and university campuses. Now, they’ve almost become history. The ready-to-drink beverage market is getting increasingly concentrated among a few giants. Reports show that in 2025, the share of stores of 10,000-store-level brands in the tea beverage industry rose from 3% at the start of 2021 to 10.4%. Ready-to-drink coffee is even more concentrated: the top 5 brands’ store share reached 21%.

I feel these changes every day—at the Qiantan area where my company is located, a standalone building that used to belong to a foreign enterprise had last year put up the sign “Zhangliang Group.” When I pass by, I often think how big it is now—made by consumers eating mala hotpot noodles bowl after bowl across more than 6,000 stores.

But in just the same short decade, the first-generation 10,000-store brands all ran aground as a group. The first-generation 10,000-store brands all ran aground as a group—Zhengxin Fried Chicken’s store count was cut in half to about 10,000; Juewei Duck Neck was also reported to have shrunk by more than 4,000 stores in recent years; in 2025, after being ST for secretly concealing part of its revenue, it saw its first-ever loss. Wallace was announced just recently to delist and proactively suspend trading from the National Equities Exchange and Quotations (New Third Board).

Today’s domestic foodservice is like the situation of the late Eastern Han era—moving from war among regional lords to the Three Kingdoms. From tea beverages, coffee, and mala hotpot noodles, each category has its own “Three Kingdoms” tableau standing in an imposing standoff, while the “old warlords” see their power decline. This both means the industry has passed the bandit-camper stage, and it also means the brands’ next battles will be even more difficult. After land-grabbing, what follows is a battle for scale—and the final outcome is still far away.

And the common way that used to make companies become giants is to trade profit for scale. So for the next battle, the key is also how to regain profit—especially when scale is already at its peak and where incremental growth will come from becomes the question.

At the turning point between old and new, we find that the 10,000-store camp shows three clearly distinct types of brands and three directions of evolution.

The first type is the “old 10,000-store” brands, including Zhengxin Fried Chicken, Wallace, and Juewei Duck Neck, all of which reached the 10,000-store mark before 2020. Riding on the era when domestic foodservice chains were rapidly rolling into place, they now face the midlife crisis of being abandoned by consumers, hovering at the edge of the 10,000-store camp.

The second type is the new generation of giants. They won out in the scale race and only just began to show the Matthew effect. This includes Mixue Bingcheng (including Luckin Coffee) and Luckin Coffee. Their vision is to become a “century-old enterprise” and “build a world-class coffee brand.” After redefining the category with extreme cost-performance, they may also be facing the predicament that “a big ship is hard to turn.”

The third type is the newcomers that have killed their way out from the cracks. Outside the giants, they squeeze out market share with differentiated playbooks. For example, Guying Tea, which stays loyal to regional markets; Tastino, which competes with Western-style fast food by misaligning its positioning; and NuoWa Coffee, which rides on convenience stores like a parasite.

10,000 stores is the end point of the previous round, and also the starting point of the next round. Some brands have no dreams, so they stall in the previous era. Having had their own time is already a kind of luck. But what they can’t resist is that some brands start out standing at their end point—and push forward with continuously self-driven ideals.

The “old 10,000-store” brands, stuck in the bandit-camper era

Brands without aspirations aren’t sad. Not all brands are determined to become century-old enterprises, yet they often treat hitting 10,000 stores as a marker of success. The launch of the first-generation 10,000-store brands was, in most cases, also just a wild growth carried along by the growth wind of chain operation.

Around the early 2000s, KFC and McDonald’s had already been in China for several years, and people in China had an understanding of chain brands, while domestic chain dining was still blank. At that time, Zhengxin snacks, founded in Wenzhou, got store staff to wear standardized work uniforms and used eye-catching storefront design to give people a sense of novelty. This was also the early stage of domestic foodservice chains applying visual “hammering” tactics.

Zhengxin also explored an expansion path based on a lightweight, easily replicated model. To expand the market, it cut 90% of its individual SKUs, greatly reduced the size of its stores, improved output per square meter, and renamed itself “Zhengxin Fried Chicken.” It focused on a star single “big item,” rapidly replicating 1,000 company-owned stores. This lightweight and efficient model later became the standard playbook for snack chain expansion. At the same time, Juewei Duck Neck, a giant in the braised food category, even delivered the pre-made products via cold-chain to stores, so that store staff only had to plate and weigh.

From 1,000 stores to 10,000 stores and even 20,000 stores, what made it happen was franchising—and a series of transformations designed to attract franchisees.

Zhengxin opened up franchising during the avian influenza period in 2013. At that time, many mom-and-pop shops and small chains fell, leaving a large number of available locations. At that moment, Zhengxin lowered its franchising fee to 30,000 yuan. With other expenses included, you could open a store for 80,000 yuan—allowing it to quickly harvest the market. Wallace also expanded in a similar way; during the COVID-19 period, it once opened as many as 8,000 stores.

While low-cost store openings attracted franchisees, the “old 10,000-store” brands were also good at attracting consumers with low prices. For example, when Wallace was founded in 2001 and broke through in the foreign fast-food market, it began with an attempt at a “special 123” promotion—coke for 1 yuan, chicken leg for 2 yuan, and hamburger for 3 yuan (at the time, hamburgers’ common price was around 10 yuan). That pushed store revenue to as high as 8,000 yuan for a period, and it also led Wallace to stick to a low-price strategy to this day.

Zhengxin Fried Chicken’s cost-performance is also deeply ingrained in people’s minds: for 12 yuan you can buy a large piece of chicken steak and get free juice. In 2015, Zhengxin Fried Chicken hired Huang Bo as a spokesperson—something rarely seen in a snack category with low gross margins. Huang Bo also brought Zhengxin Fried Chicken into the smash-hit variety show of the year, “Extreme Challenge.” Clips were continuously replayed across stores, taking the business to a new peak.

The expansion path of the “old 10,000-store” brands largely followed this kind of route: light, replicable stores plus a set of snack-and-drink categories to form a single-store model that could be rapidly replicated; meanwhile, low-price marketing plus brand marketing would trigger bursts of customer flow, thereby igniting franchise demand.

The contradiction also became visible as a result. When brands spend money on marketing, it can drive business for franchise stores, but the bigger effect is to attract more franchisees to enter. When the heat of marketing fades, the brand harvests a round of franchise fees, while franchisees are still selling chicken steak at 12 yuan. Whether a low-gross-margin single-store model can make franchisees profitable became an issue.

In the long run, this is also bad for the brands. Taking Wallace as an example: last year its gross margin was only 6.04%, and over the past decade it has long hovered around 4%-6%. Based on its 13.9-yuan double-hamburger set meal, for every hamburger sold the brand can earn only about 0.4 yuan.

Wallace also continuously does celebrity endorsements and IP collaborations, investing heavily in marketing. More recently, it launched a promotion offering coffee for 9.9 yuan for 30 days—very reminiscent of the old “special 123.” But now even McDonald’s is lowering its posture to do “poor-guy meal” style value offerings. Wallace is taking the old road, more like piling on snow on top of franchisees’ troubles.

The past expansions of the “old 10,000-store” brands were also relatively loose and speed-driven. The larger the management radius, the more loopholes there were. Some franchise stores could arguably be operated in the “husband-and-wife shop” way. Especially when it’s hard to generate profit from pricing, new products, and customer flow, quality issues like cutting corners become easier to surface, or food safety issues such as using expired ingredients and problems with order-out hygiene become more likely to break out. For instance, Zhengxin has been criticized in recent years for “making the chicken steak smaller and smaller.” Wallace even became part of the surreal “black-and-red” racing track by gaining the moniker “The Shooter.”

When store profits and management can’t support standardization, even if the brand wants to adjust from the top, it may still be extremely hard to turn things around.

In the past two years, Juewei Duck Neck has attempted to pivot. Its head said in a media interview that Juewei wants to shift from the past “supply mindset” to a “user mindset.” Last year, Juewei frequently introduced new items, stepping out of a single cold braised category and launching hot braised cups, meal braised items, and more. It also stopped selling only duck and started selling pork ear, beef flank, and other items, trying to break into scenarios like late-night snacks, meals paired with food, gift occasions, and so on. But even if a hot braised cup only requires half-processing at the store level, consumers still accused different stores of inconsistent methods and that quality control is hard to judge.

When brand influence and word-of-mouth weaken, making it difficult to create new customer flow and incremental franchise store openings, and existing stores also can’t profit healthily, contraction becomes inevitable. After being reversed by scale, “getting smaller” might also help brands adjust themselves.

The new generation of giants, extracting value on top of scale

In contrast to the low-gross-margin predicament of the “old 10,000-store” brands, the new generation of giants also targets extreme cost-performance, yet can maintain relatively healthy profit. Looking back at how they arrived, you’ll find their expansion of new stores wasn’t for a one-time harvesting of returns. Instead, it’s a layout with relatively long-term, whole-picture thinking that can generate compounding effects, plus more scientific management—like a bunch of “regular troops.”

On the profit issue, for example, for Luckin Coffee, the coffee brand under Mixue Bingcheng: franchisees told the media that even if a cup of an Americano is sold at an ultra-low price of 5.9 yuan, the gross margin rate can still reach 48%.

Behind that are the supply-chain foundations Mixue Bingcheng built over many years. In 2012, when Heytea had just been born and brands like Nayuki Tea hadn’t even appeared yet, Mixue Bingcheng had already set up its own central factory. It later built its own logistics and did global direct sourcing, achieving supply-chain autonomy. By removing middlemen markups, it maintained a total cost advantage. End-to-end supply chain plus heavy asset investment created barriers that a new brand would find hard to follow.

How big is the total cost gap and industry difference? According to media reports, for Luckin Coffee’s “six-country blend” coffee beans supplied to franchisees, the price is only 69.5 yuan per kilogram, while the industry generally ranges from 90 to 120 yuan per kilogram.

Especially when a brand expands stores into remote areas, it becomes even more inseparable from supply-chain support. As early as late 2024, Bai Zhi, vice president of Luckin Coffee, mentioned that when Luckin Coffee opened more than 100 stores in Xinjiang at the time, it relied on its own supply chain to bypass expensive logistics and time costs.

The improvement of the supply chain also allowed Mixue to escape the old path of “harvesting franchise fees” taken by the “old 10,000-store” brands. Instead, it supports franchisees by supplying them with materials, driving more than 95% of revenue and gross profit. Fundamentally, Mixue Bingcheng is a supply-chain company—similar to Guozi Food Union in the ready-to-drink beverage space—except Mixue adds an in-store ready-to-drink service. And Guozi Food Union, as a 10,000-store giant in retail, also proves the effectiveness of the “supply-chain model + dense store openings in lower-tier markets.” Last year, its net profit grew by more than 88%. Its founder, Yang Mingchao, recently said that the brand is expected to become China’s own Sam’s and East Asia’s own Kobe Bussan.

From Luckin Coffee’s lightning-fast expansion as well, you can see that Mixue invests heavily in building a complete supply chain. It’s not just extracting profit in 4-yuan lemon drinks; it has bigger ambition—based on more trend categories giving birth to a series of sub-brands, continuing Mixue Bingcheng’s cost-performance-driven playbook.

Besides Luckin Coffee, the two newly started sub-brands—“Jilatu” making Gelato and “Xianpi Fulu Family” making beer—also share Mixue’s supply chain, bringing some low-price shocks to niche categories. These three sub-brands also all leverage Mixue’s raw-material advantages in product design: Luckin Coffee focuses on fruit teas; Gelato itself uses milk and fruit as ingredients; and Xianpi Fulu Family offers all kinds of fruit beers, tea beers, and milk beers.

Left: Recently, Xianpi Fulu Family officially announced its spokesperson as Lu Han

Right: Jilatu store, image source: Xiaohongshu @o9o

The 30,000-store coffee giant Luckin Coffee’s barriers, besides building supply chain autonomy, also include digital capabilities that cover everything from procurement to store management and private-domain customer acquisition. This makes the operation across each link no longer require manual coordination, reducing wear and tear across the entire system.

Here’s an example: most tea beverage and coffee shops today need staff to manually estimate cup volumes to prepare semi-finished items like tea soup and toppings. If they prepare too much, costs leak away; if too little, the order-out process becomes chaotic. But with a digital ordering and order-out system, they can produce in an orderly way directly based on the received order volume. It may look like just a difference in details, but in foodservice—especially a ready-to-drink industry where cost control is the top priority and thus needs to be even more extreme—this can be described as a “dimensionality reduction” attack.

Mixue and Luckin, too, have raised the standardization of restaurant chains, operating procedures, and so on to a new height. This sets higher entry barriers for franchisees and demands that franchise stores meet the standards of company-owned stores. To the point that even when food-safety issues are exposed, netizens can still forgive the expired-lemon incident.

But the two giants obviously want to find more profit space. After reaching 30,000 stores and 40,000 stores, perhaps there are still some incremental store openings. But they also need to put effort into single-store operations and, beyond store scale, to form a longer-lasting “century-old enterprise” and “world-class enterprise.”

Going overseas is an exit that many tea beverage brands are trying. Mixue Bingcheng has already been ahead. A report shows that Mixue Bingcheng has even achieved first place in Southeast Asia’s tea beverage category, with a market share of 19% and a scale exceeding KFC and McDonald’s. Last year, its total overseas store count surpassed 5,000.

In sit-down meals, some distinctive categories from China’s street corners and alleys have the potential to “learn from the East and spread to the West,” creating a wave abroad. For example, hot pot and mala hotpot noodles that have become popular in Japan and South Korea in recent years are seen by local consumers as higher-end dining choices. Haidilao’s overseas subsidiary already listed on the U.S. stock market in 2024, and Yang Guofu is also accelerating store openings—reportedly its Japanese stores often have long lines. They demonstrate a profitability model that isn’t centered on the 10,000-store benchmark, but on service and lifestyle premium pricing.

Mixue Bingcheng is also exploring a brand-new way forward—combining with cultural tourism, making the IP deeper. After introducing the “Snow King” IP in 2018, Mixue Bingcheng has rolled out animated series and offline flagship stores themed around Snow King. Recently, it also announced it will build a Snow King amusement park. In its flagship stores, Mixue Bingcheng doesn’t just sell beverages; it also sells blind boxes, toys, snacks, and more derived from the Snow King IP. It’s almost like a mini IP amusement park, opened at scenic spots nationwide. Reports say that at the flagship store beneath its headquarters in Zhengzhou, daily revenue once exceeded 600,000 yuan.

Mixue Bingcheng Hangzhou flagship store

Image source: Xiaohongshu @living in a cat in the mountains

Newcomers, blooming everywhere in the cracks

The giants are accelerating their capture of the market, but there are also gaps among them. Besides, while giants are splitting the market, they’re also creating demand and expanding the market size. Consumers are also always willing to pay for truly innovative offerings.

The four brands that reached the 10,000-store mark in the past three years—CooDee Coffee, Guying Tea, NuoWa Coffee, and Tastino—each showcase their own misaligned-competition tactics as new brands.

Founded in 2022, CooDee Coffee chose to go head-to-head with category giants at close range. It also attracted franchisees with the halo of Lu Zhengyao, more aggressive franchise subsidies, and more down-market location choices—replicating Luckin’s lightning expansion. It broke 10,000 stores in just 2 years. It also heavily uses the store-within-a-store model, enabling it to quickly permeate office buildings, university campuses, transportation hubs, and more.

Also misaligned in scenarios with Luckin is NuoWa Coffee. It “parasitizes” into convenience stores and partners with convenience store chains like FamilyMart, Lawson, and FamilyMart—achieving a contracted store size of over 10,000 stores. It exists in a 1–2 square meter corner next to the cashier of the convenience store, and the convenience store staff operate the coffee machines. By directly sharing the convenience store’s prime locations and customer flow, it carved out a scenario for selling professional ready-to-drink coffee inside convenience stores.

Image source: Xiaohongshu @Xiao Zhao fan rice diary

And when most brands take the aggressive “cast a wide net” approach for expansion, Guying Tea chose a different tactic—relying on regional density instead of nationwide breadth. It concentrates resources in core provinces like Zhejiang, Fujian, and Jiangxi, using high-density store openings to dilute logistics and management costs.

Another feature of Guying Tea is that it concentrates on second- and third-tier cities and below, with township stores accounting for over 40%. In markets like these, Guying Tea serves a group of people who want quality upgrades beyond the cost-performance segment covered by Mixue Bingcheng. They’re willing to pay for tea beverages around 15 yuan.

In addition, when Luckin and Luckin Coffee aren’t yet dense enough in these markets, Guying Tea starts selling coffee and moves first to occupy the blank space in the coffee market.

Tastino also targets the price gap. It occupies the price band between McDonald’s and KFC on one side and Wallace on the other. It gives fast food a fresh feel through product innovation in Chinese-style burgers, creating real impact on Wallace as well as overseas brands like Burger King that have been “lukewarm” and not exactly thriving.

Tastino rolls out various product innovations around an air film and Chinese flavors

These misaligned-competition tactics naturally come with inherent limitations as well. The sustainability of CooDee’s subsidy-and-burn strategy toward franchisees and its all-out price war; whether Guying Tea should break into first-tier markets; how NuoWa keeps the brand independent; and Tastino’s reports of large-scale store openings and store closures—each brand has its own headaches.

For newcomers, whether “10,000 stores” is the starting point or the end point of scale—whether it’s breaking through limitations or carving out a corner to self-protect—depends on whether the brand has enough resolve, and whether it can build system-level capabilities that go beyond simple scale expansion, in areas such as efficiency, management, supply chain, brand values, and so on. After 10,000 stores, they’re only just entering the deep-water zone where internal strength is tested.

A note at the end

In the next phase of competition, it won’t be about who opens faster anymore. It will be about who can last longer.

For this shared new target, the “old 10,000-store” brands try to pivot and protect themselves amid pain; the new generation of giants can’t just turn around to raise prices, so they search for new frontiers; and newcomers still need self-cultivation to solve the problems their predecessors experienced. The path the old 10,000-store brands have walked has already warned everyone: breaking 10,000 stores may look like a symbol of reaching the top, but in reality it means the incremental market is hitting its ceiling, homogenized competition is intensifying, and the marginal benefits brought by scale are diminishing.

Either way, scale itself is no longer a moat. It’s now a position that must be continuously operated and defended. The real battle has just begun. This battle is about organizational vitality, about value creation, and about how to find the next era’s balance between efficiency and experience, standardization and innovation, and scale and profitability.

In history, after the Three Kingdoms period came unification. Today’s chaotic battle among 10,000-store brands may also be waiting for someone to redefine the rules and usher in the next era’s players. It could be new players rebuilding the supply chain with AI. It could be overseas entrants opening incremental growth through globalization. It could also be pioneers creating new demand by pioneering new product categories.

Where will the road lead? The answer has not been revealed yet. The only thing that is certain is that the old map can no longer reach the new world. The endgame has not arrived, and in the next round, everything is already beginning.

end

Content author: Xiaoxiao

Editor: Zheng Jingmin

Chief editor: Shen Shuaibo