Guoquan is making a fortune, not just through franchising

On March 12, Guoquan Shihui (hereinafter referred to as Guoquan) announced its 2025 financial report: total revenue of 7.81 billion yuan, a year-on-year increase of 20.7%; net profit of 450 million yuan, a surge of 88.2% year-on-year.

As of the time of writing, Guoquan’s stock price is HKD 3.8, up 119.35% over the past year, with a market capitalization of HKD 10.04 billion and a P/E ratio of 28.4 times.

The core of Guoquan’s business model is “supply chain + franchising,” generating revenue by selling ingredients to franchisees and providing operational guidance. Essentially, it is a supply chain-driven “B2B2C” model, with franchisees serving as the key link between the brand and consumers.

This also means that Guoquan almost entirely relies on the franchise model. Out of 11,566 stores, 11,554 are franchised, accounting for 99.9%, while only 12 are company-operated, making up 0.1%. Franchise channels contributed 6.22 billion yuan, accounting for 79.6% of total revenue.

However, looking at the 2025 performance, Guoquan is earning money beyond just franchising: revenue from other sales channels increased by 63.4% year-on-year to 1.417 billion yuan, accounting for 18.2%. Diversifying channels to some extent can hedge against risks associated with reliance on a single model. On the user side, the number of registered members exceeded 64.9 million, a 57.1% increase year-on-year, providing a foundation for repeat purchases and consumer stickiness.

Behind the significant profit growth is also effective cost control. Although sales costs increased by 21.2% in line with sales volume, expenses for sales and distribution (6.6%) and administrative expenses (1.8%) grew much slower than revenue, driving the net profit margin from 3.7% in 2024 to 5.8% in 2025.

In 2026, Guoquan plans to add 2,934 new stores, bringing the total number of stores to over 14,500, with store closure rates controlled within 4%. The target for registered members is to surpass 95 million, and core operating profit growth is expected to outpace revenue growth.

Overall, Guoquan’s 2025 performance is commendable, but whether its franchise business can continue steady growth and whether non-franchise businesses can maintain high growth momentum in 2026 remains to be seen.

(Planning: Li Mengran, Illustration: Li Yuhui)