1.      In comparison to IT and many other industries, China’s restaurant sector is overwhelmingly underdeveloped and aboriginal. Under current economic environment, it is forced to looking for a turning point to modernize the industry and a tipping point to grow.

2.      China doesn’t have a modern and working restaurant prototype similar to McDonald’s first QSR store to ignite a whole fast-food industry growth in America in 1950s. China’s current business models are hard to duplicate and sustain.

3.      Two parallel restaurant systems run in China simutanously, the one on the surface following government regulations, paying tax and so on, and the one under.

4.      Nearly all domestic “successful” restaurant brands are started as the one-under. An elevation to the surface is a reinvention of the business model and a huge opportunity cost. The profit margin can instantly be eroded by 10% or more.

5.      China’s domestic supporting casts for the restaurant industry, from agriculture, cold-chain, equipment manufacturers to management professionalism, are inadequate for domestic restaurant brands to grow on themselves. They need professional supports not existing domestically.

6.      Current generation of China’s restaurant operators are lack of education, and their professionalism is poor despite of hard working. The general environment doesn’t foster creative innovation. There are very few visionaries as American icons such as Ray Kroc (McDonald) or Howard Steward (Starbucks).

7.      Capital investment fuels the growth and management building. The one-under and the reinvention of their business model cut the blood circle on the investment/return. As a cash business, a ‘successful’ business owner finds no much of rationale to take risks to overhaul unless they run into a rock.

8.      Concept investment in China’s restaurant sector is hugely unpopular. However, good cash flow is not the same as a working business model. A working business model can initiate a good concept. Only if a concept works, the business model can sustain a long growth and healthy return on investment.

9.      Foreign restaurant concepts coming to China is too bureaucratic to comprehend market reality, losing the sights to provide substantial values to its purported customers and to see what their real advantages are despite of grand investment. The golden age of McDonald and KFC coming to China has long gone.

10.   China is a typical textbook investment. It requires a no-nonsense and detail oriented concept-defining approach by both operators and investors because the market scale, potentials and the reward are beyond imagination. 

（诚寻餐饮创业合作者，有意者请与我联系：hwang35388@yahoo.com）