He Failed Many Times, But Now He has 311 Branches!

This Chinese restaurant, with annual revenue of RMB 5 billion and 20,000 employees, has opened 311 branches in China. This year, it will reward its employees with RMB 120 million.

It has also rewarded its good employees with "RMB 1 million per person each year, not by directly giving them money but from their parents to grandchildren, four generations’ worth of education, medical, travel, insurance costs, all of which can be reimbursed!

Jia Guolong is the chairman and founder of Xibei restaurant.

Xibei, Haidilao, and Grandma's Diet are known as the "BATs of the catering industry” (BAT= Baidu, Alibaba, Tencent). 

Jia Guolong is from Inner Mongolia. A college dropout after only 2 years, he collected thousands of yuan from his mother and sister to fund his business. He then went to Shijiazhuang to buy small commodities and sold them back to Inner Mongolia, earning several times or up to 10 times the price difference. This allowed Jia Guolong, who was in his early 20s at that point, to be earning more than RMB 10,000. Since then, he has opened coffee shops, western restaurants, bars and even a snack square in his hometown of Linhe in Inner Mongolia.

His "Xibei bar" sells cocktails, but guests liked to drink Erguotou. Rather unexpectedly, the most-ordered dish has been the casserole noodles, which Jia Guolong eventually turned into a simple yet delicious Chinese restaurant that has evolved with the market over time.

Between 1995-1996, Jia Guolong, who was less than 30 years old, experienced his first small upsurge since he had founded his company. With an annual income of RMB 1 million, his business was so good that he felt the Linhe's market was too small for him.

In 1997, Jia Guolong went to Shenzhen and decided to challenge the seafood restaurant scene. But after only nine months, he not only failed to make a name for himself in the city but he lost RMB 1 million in the process, including almost all of his possessions.

In 1999, Jia Guolong came across an opportunity he simply couldn’t pass on.

As the Linhe government needed to set up an office in Beijing, Jia contracted the Beijing Jincuigong seafood restaurant which was conveniently located next to the new office. Jia Guolong was promised exclusive service and reception, but in barely 4 months, more than RMB 1 million had been lost.

Despite those unfortunate events, Jia Guolong decided not to give in and focus on growing his business. In 2001, he transformed the seafood restaurant into You Noodle Village where he sold oat noodles and mutton, the specialty of his hometown.

The restaurant’s daily income increased from RMB 20,000 to RMB 45,000.

In November of that year, Jia Guolong founded Beijing Xibei Catering Management Co., Ltd. By the end of 2002, the turnover of Xibei You Mian Cun in Beijing had reached about RMB 100 million.

He relates his core competence to three main ingredients: beef and mutton, and

grains, specializing in Northwestern cuisine.

Jia Guolong loves to innovate and create new culinary experiences for his customers.

A good friend of his once summed up Jia’s personality perfectly: “I don’t think he has any other hobby outside of his own work. He doesn’t smoke, drink, sing, dance, play mahjong or collect antiques."

Xibei changed names four names and spent tens of millions of yuan until it settled on Xibei You Mian Village. From 2015 until now, the Xibei fast food project has failed and fought back repeatedly to get to where it is today.  In that sense, Jia champions the trial-and-error mentality: “It’s a success in itself,” he said.

In terms of management, Jia Guolong is willing to spend the necessary money on training his employees and pays very particular attention to details.

He summed up Xibei's organizational model as: “Create and share.”

The idea is that teams work together to create value and then distribute that value in a way that is constantly re-evaluated. The biggest change this model has made has been at the bottom line.

In order to motivate restaurant staff, Xibei has created a unique system of "entrepreneurship division + competition field system", namely the Xibei type "partner plan".

Jia Guolong made a bold decision to implement the "referee system" only available in sporting events in his restaurants: one judge from each restaurant is selected from a pool of excellent employees and rotates roles, the highest of which cannot extend beyond that of a branch manager. He or she can supervise other employees, scoring points in the process.

Employees compete on a quarterly basis and are ranked with grades: A+, A, B, and C. Only when someone collects four A's can they change their license plate to A. That is, to open an A branch, 1 A+=2 A's.

Xibei's branches pay only 60% of their profits to headquarters, the remaining 40% being distributed by the management team. The income of Xibei's front-line employees is 50% to 100% higher than that of their peers and even sometimes higher than that of their headquarters staff.

As of this December, Xibei counts 311 branches in 53 cities with a total annual turnover of more than RMB 3.5 billion.

Source: Baidu

Editor: Crystal Huang 

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