Retailing, Franchising, and Consumerism Business Intelligence in China

Four Hunan Little Sheep Restaurants Closed

Inner Mongolia Little Sheep Catering Chain Company has wiped away four Little Sheep restaurants from the Hunan market.

According to Li Lichan, assistant to the CEO of IMLSEC, in order to quickly seize the market, the company set up general agents and franchise stores at the provincial, municipal and county levels in the initial period of its foundation and developed as many as 721 franchise stores in three years, including four in Hunan.

However, this rapid growth, while playing an active role in the company's expansion, has also brought many problems for the company. For example, the franchisees' quality, service and management are different and this has seriously undermined consumers' trust in the brand. As a result, the company began to straighten out its franchisees in 2003 and so far they have reduced their total number of franchised restaurants in China to 326, and all the restaurants in Hunan have now been closed.

Li says that Little Sheep attaches much importance to the Hunan market. With the opening of their first direct-run restaurant in Changsha, the capital city of Hunan Province, they will add several other restaurants according to the local demands.

Little Sheep was set up in Baotou in August, 1999.

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