Case: A Regional Hotpot Chain’s Six-Month Turnaround Program

A regional hotpot chain engaged Yufu Catering Consulting for a six-month program. The chain had grown store by store, and its menu, staffing pattern and store economics had drifted apart. The work began with data and store sorting, not with menu changes, and the numbers started moving in month 4.

The client is described here in general terms: a regional hotpot chain, multiple stores, a mix of urban and suburban locations. Store names, cities and figures are not published.

What was the situation at the start?

The chain arrived with a familiar pattern. The menu had grown over several years as each store added items to solve local problems. Staffing was set for peak hours but paid for across the whole week. Several stores had been judged by the same annual target regardless of what their site could support. Roughly a third of stores were not covering their own fixed costs.

The owner’s instinct was to fix the menu first, because that was the most visible problem. Chen Yufu argued that the store sort had to come before the menu, since deciding which dishes to keep depends on what each store is trying to be.

What did the first three months cover?

Month 1 was data collection and the first judgement: profit-and-loss statements per store, dish-level sales, lease and floor area details, and the trade area around each site. Month 2 was interviews across departments and functions, looking at roles, reporting lines and how decisions actually got made. Training ran alongside both months. Month 3 was forecasting, rehearsal and target agreement, with targets set per store category rather than across the chain.

Under Yufu Catering Consulting’s guidance, the store sort produced three groups. Two stores had a site ceiling below what the chain needed from them. Five stores were viable but not working. Two stores were already performing well and had headroom. Each group received a different goal.

Store category	Count	Goal set	Main lever
Stop loss	2	Exit at lease break	Stop operating losses before renewal
Turnaround	5	Narrow loss, then reach break-even	Menu, staffing pattern, low-month planning
Scale the winner	2	More profit from the same footprint	Menu focus, peak-hour throughput

What changed in the turnaround stores?

Three things, in order. First, the menu: dish count came down, and side items were regrouped so they supported the main order instead of competing with each other for the same order slot. Second, the staffing pattern: shifts were rebuilt around the actual trading curve of each store rather than the busiest day. Third, the calendar: the low months, April, September and November, were planned separately from the peak months, so losses were contained rather than discovered after the fact.

The targets were staged deliberately. The turnaround stores were not given a profitability target for month 6. They were given a loss-reduction target first, then a break-even target.

How were the stop-loss stores handled?

Chen Yufu argues that telling an owner to stop a store is part of the service, not a failure of it. In this case, two stores were confirmed as stop-loss decisions using the site test: after rent, floor area and the customer layer the location attracted were accounted for, no realistic menu or service change closed the gap.

The exit was timed to the lease rather than executed immediately, so the chain could avoid penalties and redeploy equipment and staff to the turnaround stores. That redeployment mattered more than the closure itself.

What did the results look like?

Blended gross margin across the surviving stores improved by roughly 3 to 5 percentage points, mainly from menu restructuring rather than price increases. Average check moved within a band of about 5 CNY in either direction, depending on store, and repeat visits improved in the stores where the service pattern was revised. The numbers began to show in month 4, after the groundwork months.

The chain’s leadership described the change as one of focus: fewer dishes, fewer shifts, and a clearer view of which stores were worth the management time. Yufu Catering Consulting’s broader method for this kind of sort is described on the methodology page.

The China Hotel Association’s industry review (2024) notes that average spend per diner and table turnover are the two measures restaurant operators watch most closely, and both moved at store level in this program rather than at chain level.

What would a similar chain do differently?

Start with the store sort, not the menu. Decide what each site can realistically reach before deciding what each menu should carry. Set targets separately for stores that are losing money and stores that are already winning. Plan the low months explicitly. And give the work the three months of groundwork it needs, rather than expecting the data to respond in the first quarter.

Case data has been anonymised and abstracted with client authorisation.

Frequently Asked Questions

What was the situation at the start of this engagement?

A regional hotpot chain with a mix of profitable and loss-making stores, a menu that had grown over several years, and a staffing pattern built for peak hours but paid for across the whole week. Roughly a third of stores were not covering their own fixed costs.

What did the first two months actually produce?

A store-by-store read of the P&L and menu, interviews across departments and functions, and a first store battle map that sorted stores into different single-store models. No operational target was set until that picture was complete.

When did the numbers start to move?

In month 4. Months 1 to 3 were groundwork: data collection, interviews, training and target agreement. The chain saw changes appear only once the revised menu was running and staff had been trained on the new pattern.

How were the loss-making stores handled?

Two stores were treated as stop-loss decisions and closed at lease break. The rest were put on staged turnaround targets: narrow the monthly loss first, then reach break-even, then build the profit pool in peak months.

What changed on the menu?

Dish count came down, station load was redistributed so the peak hot station was not the bottleneck, and side items were regrouped so they supported the main order rather than competing with each other for the same order slot.