Retailing, Franchising, and Consumerism Business Intelligence in China

Little Sheep Prepares For IPO

After receiving its first sum of venture capital in June 2006, Inner Mongolia-based hot pot restaurant franchiser Little Sheep is realigning its resources to prepare for an initial public offering scheduled for 2008.

In order to optimize its assets, Little Sheep is reducing its number of franchise restaurants, exploring overseas markets and trying new business patterns.

Little Sheep currently has 719 chain restaurants, two-thirds of which are franchise stores. A representative from Little Sheep says that the company is transforming the franchise stores into direct-operation stores, and closing down those that have poor operations.

Little Sheep originated from a small restaurant in Inner Mongolia in 1999, but by 2003, it had ranked as the second biggest food brand in China, only next to YUM, the owner of KFC and Pizza Hut. During this past Spring Festival holiday, it opened several new restaurants in Japan and Canada.

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