Core Insights - Tasting, a fast-food brand, is experiencing a high rate of store openings and closures, with 968 new stores opened and 907 closed in the past 90 days, resulting in approximately 10,296 operational stores as of December 2 [1][4] - The brand's rapid expansion has led to a significant number of closures, indicating potential instability compared to more established competitors like Wallace and KFC [1][7] - Tasting's aggressive growth strategy, particularly in lower-tier markets, has resulted in a high number of openings, but the brand is now facing challenges in maintaining profitability and attracting franchisees [10][12] Expansion and Closure Dynamics - Tasting's rapid expansion has been facilitated by a mature supply chain and digital management systems, allowing it to grow faster than competitors like Wallace and KFC [9] - The brand's strategy involved opening multiple stores in close proximity, which has led to market saturation and subsequent closures due to poor performance [4][5] - The average investment required to open a Tasting store is approximately 452,300 yuan, which is lower than KFC's investment threshold, making it attractive for franchisees [9] Market Position and Competition - Tasting's market position is characterized by a pricing strategy that is higher than Wallace but lower than McDonald's and KFC, providing a unique offering in the Chinese fast-food market [9] - The brand is actively seeking to expand in first-tier cities and northern regions, despite the recent closures, indicating a continued focus on growth [9][10] - The competitive landscape includes significant pressure from established brands like KFC and McDonald's, which have a stronger consumer acceptance in urban areas [5][10] Franchisee Challenges - Franchisees are facing longer payback periods, with estimates now around two years, compared to previous expectations [12] - The average gross margin for Tasting is reported to be around 45%, which is lower than the typical margins for beverage brands, indicating profitability challenges [12] - There is a concern among franchisees regarding the brand's aggressive expansion strategy, which may lead to market saturation and reduced profitability for individual stores [13]