A Comprehensive Analysis of the Chinese Chain Restaurant Market: Success Factors, Challenges, and Strategies for Improvement

Abstract

The rapid rise of China's economic lifeline has made the catering industry increasingly prominent, while chain restaurants have stood out in the catering industry by realizing economies of scale through unified branding, standardized services and centralized management. This paper analyses several aspects of the current situation and development of China's chain restaurant market, mainly based on the example of China's Little Sheep Catering Group, with the comparison to successful international brands such as McDonald’s. The analysis reveals the challenges faced by Little Sheep, such as weak management and lack of standardization due to rapid expansion. We also provide suggestions for Little Sheep to improve through product and service innovation, quality control, balanced expansion, and brand building. Finally, the paper summarizes the common problems of Chinese restaurant chains, including market homogenization, management deficiencies, and excessive pursuit of scale expansion. We suggest that differentiation, quality assurance, and balanced branding will lead to a healthier development of China's restaurant chain industry.