Core Viewpoint - The conflict between restaurant brands and franchisees is intensifying, exemplified by the recent name change of nearly 40 stores from "Electric Plant Noodle" to "Zhu Popo Sweet Noodle," highlighting the underlying tensions in the franchise model [1][2]. Group 1: Incident Overview - The incident involves the "Electric Plant Noodle" brand, which currently has nearly 50 stores [2]. - Franchisee Zhu Liye opened her first store in Jinan in 2021 and expanded to nearly 40 stores over four years [2]. - Disputes arose over rising franchise fees, which increased from 15,800 to 39,800, along with demands for substantial security deposits [2][3]. Group 2: Franchisee's Perspective - Zhu Liye expressed frustration over the lack of operational support from the brand, feeling that she was left to manage without adequate assistance [2]. - After refusing to pay the demanded security deposit, Zhu stopped purchasing core supplies from the brand and rebranded her stores [3]. Group 3: Brand's Perspective - The brand accused Zhu of mixing their proprietary ingredients with others to cut costs, justifying the demand for a security deposit [3]. - Following the rebranding, the brand issued legal notices claiming Zhu's actions constituted a breach of contract [3]. Group 4: Broader Industry Context - The article discusses the increasing frequency of disputes between restaurant brands and franchisees, citing examples like Xianhe Zhuang and Natural Daze, which faced similar legal challenges [4][7]. - Common issues include disagreements over return on investment timelines, rising operational costs, and inadequate support from brand headquarters [8][9][10]. Group 5: Future Trends - The franchise model is seen as a key avenue for growth and industry upgrade in the restaurant sector, with major brands like Haidilao and Hey Tea entering the franchise market [12]. - The emergence of professional franchisees who manage multiple locations is becoming more common, indicating a shift in the franchise landscape [14].

Investment Rating - The report maintains a rating of "Accumulate" for the company [1] Core Views - The company reported a revenue of 6.07 billion yuan for 2024, reflecting a year-on-year increase of 1.5%, while the net profit attributable to shareholders dropped to 60 million yuan, a decrease of 87.7% [4][8] - The company is undergoing operational adjustments due to a challenging market environment, which has led to negative same-store sales growth across its brands [7][8] - The company plans to adopt a cautious approach towards domestic store openings while aiming for steady international expansion [7][8] Summary by Relevant Sections Financial Performance - In 2024, the company achieved a revenue of 6.07 billion yuan, with a net profit of 60 million yuan, down from the previous year [4][8] - The operating profit margin for the company decreased to 4.2%, a decline of 6.4 percentage points year-on-year [6][8] Operational Adjustments - The company is implementing several operational strategies, including reducing discounts, focusing on product development, and optimizing store operations [7] - The company closed underperforming stores and adjusted employee configurations to lower operational costs [7] Future Outlook - The company has revised its net profit forecasts for 2025 and 2026 to 125 million yuan and 175 million yuan, respectively, reflecting a significant downward adjustment [8] - The company aims to maintain a stable employee cost ratio while optimizing other cost areas [7][8]