China’s large-scale chain of braised‑meat retailers — once poster children for rapid franchising — are now showing the limits of a formula built on expansion and heavy upstream supply chains. Juewei (Juewei Duck Neck) has warned of a 2025 revenue drop to Rmb5.3–5.5bn and a first‑time net loss since listing, while its peers Zhouheiya and Huangshanghuang report shrinking revenues and wafer‑thin margins. The industry’s striking retreat is a case study in how consumer tastes, unit economics and overbuilt capacity can combine to erode a previously irresistible franchise story.
The scale of the reversal is stark. Juewei’s store count peaked near 15,950 in 2023 and has since fallen by more than 30% to roughly 10,559, according to industry trackers. Net profit margins for the major chains have hovered at an unimpressive 3–5% for Juewei and barely above 1% at times for its rivals, leaving little buffer when sales slow or costs rise.
Part of the puzzle is price versus perceived value. Many consumers expect grab‑and‑go braised snacks to cost between Rmb20–49 per visit, with the most common tolerance around Rmb20–29. Chain prices frequently exceed that range; certain duck offal items can cost hundreds of yuan per jin (half kilo) in branded stores, pushing average transaction values above what local shoppers want to spend on quick snacks.
Yet high retail prices do not translate into superior margins because chain operators carry significant fixed costs. Juewei’s model relies heavily on selling semi‑finished products to franchisees — 83% of its first‑half 2025 revenue came from such sales — requiring factory capacity, cold chain logistics, warehousing and equipment depreciation. Zhouheiya’s more premium positioning has similarly higher rental, fit‑out and labour costs, plus special packaging and freshness technologies that raise its backend expense base.
Those costs are difficult to dilute when single‑store sales are limited. Compared with high‑turnover beverage chains where some brands report monthly per‑store revenues in the hundreds of thousands of RMB, self‑run braised‑meat outlets typically generate a much lower revenue ceiling. Zhouheiya’s self‑operated stores averaged around Rmb75,000 a month, a figure that is modest against the scale of supply‑chain infrastructure the corporate owners financed during expansion.
The sector’s growth thesis also rested on continued urbanisation and deeper penetration into community retail. That thesis has weakened: Chinese urbanisation growth has slowed from annual gains of about 1.3–1.4 percentage points in past decades to roughly 0.78 percentage points between 2021–2024. For brands that anchored store economics on denser, continuously rising neighbourhood demand, the demographic tailwind has diminished and location opportunities have an implicit ceiling.
Overexpansion created another vulnerability: overcapacity. During the boom years these companies invested heavily in new factories and storage hubs. Juewei raised funds in tranches to build processing projects totalling well into the tens of thousands of tonnes of capacity, while Zhouheiya similarly accelerated new plants from 2018. When same‑store sales fell and franchise growth slowed, fixed production capacity turned into a cost drag — depreciation, maintenance and payroll on idle or under‑utilised assets.
The result is a painful re‑set. Chains have been closing thousands of underperforming outlets, cutting marketing, and trimming costs, which has temporarily improved headline profits for some but not reversed the structural issues. Franchisees face squeezed margins as rents and labour costs rise while customer traffic declines; many small operators who once earned comfortable monthly profits now report dramatically lower take‑home returns.
Companies are experimenting to arrest the slide. Zhouheiya and Huangshanghuang are pushing pre‑packaged lines into supermarkets and discount snack chains, targeting fast‑growing retail channels. Juewei has trialled a new mall‑based format with boxed, fixed‑price items and broader categories including snacks and bakery items to attract wider footfall and lower the perceived price barrier. Acquisitions and minority investments in nimble hot‑lu brands and hybrid store concepts show a pivot from pure franchise density to diversified retail footprints.
The braised‑meat saga matters beyond snacks. It highlights a broader lesson for consumer brands in China: scale can be a curse if it is built on assumptions about endless demand and if the cost base is inflexible. As urbanisation slows and discretionary spending becomes more selective, brands that cannot continually reinvent pricing, formats and channels will struggle. For investors and franchisees, the industry’s adjustment signals a painful but necessary consolidation of an overheated growth model.