There's something going on at the Hai Di Lao stall.
According to the Guangdong Minsheng Hotline, in May, a consumer at a restaurant in Haidilao, Guangzhou, drank a foreign substance resembling a pill in a drink. The foreign substance was tested and found to contain acetaminophen. This drink is a "second-hand drink" for other customers who have not finished their drinks, but it was brought to the dining table by the waiter.
Once this food safety incident was exposed, it immediately sparked discussions among consumers and surged to the hot search.
Haidilao stated to 21st Century Business Herald reporters that on the evening of May 2nd, a staff member at a store in Guangzhou mistakenly provided another table of kumquat lemon water placed on a shelf to other customers. After investigation by the police and testing by medical institutions, it was found that the kumquat lemon water contained a cold medicine (acetaminophen).
Haidilao responded to 21st Century Business Herald reporters that the waiter's operation seriously violated the service process norms. The relevant responsible persons have been dealt with seriously according to the institutional process, and the regional responsible person has been instructed to conduct special verification and guidance on the store's operation norms to ensure the accuracy and smoothness of the service process.
The underlying message in Hai Di Lao's response is that this is a "misoperation" caused by non-standard service processes. However, from the perspective of consumers, although this may be an "occasional" incident, it is still worth paying attention to and being vigilant about how to ensure the food safety of Hai Di Lao, especially in the context of Hai Di Lao's open franchise and large-scale expansion.
The controversy over "cold medicine"
The Haidilao restoration incident mentioned that it occurred on May 2nd, coinciding with the Labor Day holiday. This may be the objective factor that led to this incident - during the May Day holiday, the reception volume of Haidilao stores continued to rise. According to official data from Haidilao, from May 1st to May 4th this year, the cumulative reception volume of Haidilao China's internal reporting stores was about 7.5 million, an increase of about 15% compared to the first four days of May 1st last year.
In this situation, the possibility of losing control of the process is magnified. An unnamed franchisee in the catering industry told 21st Century Business Herald, "The incident of Hai Di Lao can be seen as a personal act, and it is difficult to avoid such occasional incidents in catering enterprises."
A Black Sea member of Haidilao also stated that he personally believes this is a small probability event. "Compared to other stores, Haidilao's quality control is still at the forefront. I have visited Haidilao's kitchen and found that the temperature in different functional areas has standards, which are quite standardized."
But even if this is a small probability event, the impact on consumers still exists, otherwise it would not have sparked heated discussions on social media after the event was exposed. A loyal fan of Hai Di Lao expressed concern to 21st Century Business Herald reporters, "It's not a small matter to have pills, because I'm worried about whether there may be unsafe ingredients in the water or vegetables handed to me."
For the anxiety caused to consumers, Haidilao stated, "We sincerely apologize for the troubles and concerns caused to customers. Since the incident occurred, we have actively promoted actions such as self inspection and inspection by professional organizations, and maintained communication and feedback with customers, striving to resolve it properly. The relevant regulatory department has intervened in handling it. We promise to assume corresponding responsibilities in accordance with the law and ensure that customer rights are protected."
At present, the regional market supervision bureau where the Haidilao store in question is located is also under investigation. On June 5th, a staff member of the Market Supervision Bureau of Haizhu District, Guangzhou, stated to the public, "On May 13th, two law enforcement officers of our bureau conducted an on-site inspection and filed an investigation into the business premises involved in (Haidilao) based on the reported clues. The case is currently under investigation and processing."
Expand the "double-edged sword"
After the "Cold Medicine" incident, consumers' focus on Haidilao not only fell on the incident itself, but also on a voice that believes that Haidilao has opened up its franchise. In the context of overall expansion, quality control and process management will also be challenges for Haidilao, and the "Cold Medicine" incident has exposed one of its shortcomings.
In March this year, Hai Di Lao announced that it would introduce a franchise model. Haidilao stated that it has been paying attention to and evaluating different business models in the market since its establishment. At a certain stage of enterprise development, timely introduction of franchising models will help Haidilao achieve further moderate expansion.
Objectively speaking, the opening up of Hai Di Lao's franchise is not a matter of course, it seems more like a last resort.
According to the annual report, in 2023, Haidilao only opened 9 new stores and restarted 26 previously closed stores, closed 32 stores, and had a net increase of only 3 stores throughout the year; For comparison, in 2022, Haidilao opened 24 new stores, while 48 previously closed restaurants resumed operations, closing 50 stores, resulting in a net increase of 22 stores throughout the year.
Against the backdrop of slowing store growth, Hai Di Lao has to tap into its growth potential through other means, and franchising is the fastest way to achieve its goals.
The franchise threshold for Haidilao is not low. According to Haidilao's website, franchisees are required to have a financial foundation for multi store development, local property resources, and experience in enterprise management. For investment funds, Haidilao's portfolio is divided into below 10 million yuan, 10 million to 20 million yuan, 20 million to 50 million yuan, and above 50 million yuan.
Whether a higher investment threshold can ensure a consistent store experience for Hai Di Lao is currently the most concerning issue for consumers.
In response to this, Zhou Zhaocheng, Vice Chairman of the Board of Directors of Haidilao, also gave a response at the recent shareholders' meeting.
Zhou Zhaocheng said that Haidilao is not turning to franchising. Franchise stores will be completely consistent with direct stores in terms of service experience, store management, operation backend management, and supply chain, and the investment in franchising belongs to one store, one discussion. "Currently, franchise stores adopt a similar hosting method, and from the perspective of consumers, the experience of dining in direct stores or franchise stores is no different."
Zhou Zhaocheng stated that Hai Di Lao is responsible for the daily operations of franchise stores, including store operation, performance evaluation, personnel recruitment, member management, and supply chain, ensuring that customer experience, service standards, and operational management remain unchanged.
At each stage, Haidilao seems to have provided relatively complete process management, but it does not mean that hidden dangers do not exist.
A research observer in the catering industry, who declined to be named, told 21st Century Business Herald reporters, "Nowadays, catering companies are implementing standardized management at the supply chain end, and store employees generally have no problems as long as they follow the SOP (operating procedures) to serve."
The above person stated that because most chain brands rely on manual store inspections and digital monitoring systems to achieve management, it is not ruled out that employees may not follow the prescribed procedures. "This may ultimately depend on the corporate culture, organizational management rules, and system."
On the basis of not opening up franchises on a large scale, the "Cold Medicine" incident at Hai Di Lao has exposed its shortcomings in process standardization management. In the future, as Haidilao continues to expand its stores, how to balance expansion and quality control will be the issue that Haidilao needs to clarify at the moment.