Gunjo · Business Intelligence for the AI Era
← Sticker Wall JOURNEY · DETAIL

Laoxiangji: China's largest Chinese fast-food chain, the 'King of Country Chickens' that failed five IPO attempts

Founded: Shu Congxuan (born 1962, native of Feixi, Anhui; military veteran) · Laoxiangji Co., Ltd.

JOURNEY

Key Fields

FIELD STAMPS
IndustryFood & Beverage
RegionChina
ScaleMid-size
ChannelOther

Origin

In 1982, Shu Congxuan returned to his hometown in Feixi, Anhui, after being demobilized from the military and began raising chickens inspired by the 'household contract responsibility system.' In 1990, he founded Zhengwang Breeding Company, becoming the largest chicken farmer in Hefei, but quickly ran into the dilemma of oversupply and falling chicken prices. In 2003, after visiting the first KFC in Beijing and being deeply struck by how 'chicken roujiamo sold for around ten yuan and still had long queues,' he decided to open a Chinese fast-food restaurant, founding 'Feixi Old Mother Chicken' on Shucheng Road in Hefei—the predecessor of Laoxiangji.

Milestones

1982
Demobilized and Chicken Farming Growth
Shu Congxuan returned to Feixi, Anhui, from the military and, inspired by Fengyang's 'household contract responsibility system,' used his demobilization allowance to start raising chickens. Starting with a few hundred birds, he gradually expanded his operations to become one of the region's earliest professional breeders, laying the industrial foundation for his future self-built supply chain and Chinese fast-food outlets.
1990
Farming Expansion Growth
Shu Congxuan officially founded Zhengwang Breeding Company, scaling up poultry farming to become the largest producer in the Hefei area with tens of thousands of local chickens produced annually. However, he soon encountered the dilemma of oversupply and plunging prices, leading to a sharp drop in profits. This oversupply lesson prompted him to start focusing on downstream industry chain integration.
2003
Store Pilot Failure
In 2003, the first 'Feixi Old Mother Chicken' store opened on Shucheng Road in Hefei. Benchmarking KFC's store decoration and operational standards led to excessively high costs, and stores suffered net losses rather than profits in their first year. Shu Congxuan realized that blindly emulating foreign fast food was unviable and that refined operations were essential.
2012
Brand Renaming Turning Point
Guided by Trout & Partners positioning consultancy, Shu Congxuan officially renamed 'Feixi Old Mother Chicken' to 'Laoxiangji,' updating the signage across all stores overnight with immediate effect—shifting the brand from a regional, earthy identity to a national narrative. By that same year, the number of stores in Anhui exceeded 130.
2020
Viral Pandemic Response Turning Point
During the pandemic, Laoxiangji suspended over 400 stores, with estimated losses exceeding 500 million RMB. Employees jointly petitioned for pay cuts, and Shu Congxuan tore up the joint letter on video, proclaiming that he would 'sell his house and car to pay salaries.' Shortly after, a low-cost 'country-style press conference' costing only 200 RMB was held in Sangang Village, Feixi, making Laoxiangji an overnight sensation and an internet-famous brand.
2022
First A-Share Push Failure
In 2022, Laoxiangji made its first sprint toward an A-share IPO, at which time the market gave it a valuation of 18.1 billion RMB. However, the prospectus exposed issues such as a gross margin of only 16.56% (far below competitors' 60%+), losses across all 8 subsidiaries outside Anhui, and unpaid social security contributions. After more than a year of review, the application was withdrawn on August 28, 2023, shattering its A-share dream.
2020
Opening Franchise Transition
In 2020, Laoxiangji launched a franchise model in an attempt to use franchises to fuel its directly-operated operations. By August 2025, franchised stores grew to 733, accounting for 44% of total stores, but revenue contribution was only 20.6%. The single-store profitability model has yet to be fully validated, making franchises essentially a means of 'padding store counts.'
2025
Five Battles, Five Defeats Failure
On January 8, 2025, Laoxiangji submitted its fifth prospectus to sprint for the Hong Kong Stock Exchange, which recently lapsed once again. Spanning two A-share and three Hong Kong attempts for a total of five battles and five defeats, its valuation shrunk from 18.1 billion RMB in 2022 to approximately 9 billion RMB on the 2025 Hurun Global Unicorn List. Meanwhile, 16,000 instances of unpaid social security contributions and food safety incidents across 13 stores became critical vulnerabilities.

Turning Points

  • In 2020, tearing up the pay-cut petition letter combined with a 200 RMB country-style press conference made it an overnight sensation, turning a regional brand into a national internet-famous brand.
  • In 2020, shifting from pure direct operations to open franchising attempted to pump blood into the asset-heavy direct model, but franchised stores accounted for only two-thirds of revenue contribution.
  • Renaming from 'Feixi Old Mother Chicken' to 'Laoxiangji' was a critical step in transitioning the brand from a regional, earthy identity to a national narrative, guided by Trout positioning consultancy.
  • On August 28, 2023, the sudden withdrawal of the A-share listing application marked Laoxiangji's first major setback on its capital market path.
  • The heavy-asset entire industry chain model turned from a moat in Hefei into a stumbling block for out-of-province expansion, as cold-chain transportation over thousands of kilometers doubled shipping costs.

Failures & Pitfalls

  • During its 2022 A-share sprint, it exposed that all 8 out-of-province subsidiaries were running at a loss, demonstrating that the asset-heavy entire industry chain model could not be replicated across regions.
  • A cumulative record of 16,000 instances of unpaid social security contributions over three years became a fatal flaw in the IPO review, leading the capital markets to question its compliance capabilities.
  • Between 2022 and 2024, food safety incidents occurred in 13 directly-operated stores, while complaints on Black Cat Complaints regarding spoiled ingredients and insects in food reached 893 entries.
  • Franchised stores accounted for 44% of total stores but contributed only 20.6% of revenue, and the single-store profit model has yet to prove successful.
  • The phrase 'People earning over 10,000 yuan a month dare not order three meat dishes at Laoxiangji' became an internet meme; its average customer spend is relatively high, yet gross margin is only 22.8%, lagging far behind the industry average of 60%.
  • Five IPO attempts over five years all failed, and its valuation plummeted from 18.1 billion to 9 billion RMB, halved.

关键成功要素

  • The self-operated entire industry chain model (farming, slaughtering, cold-chain distribution, central kitchen, freshly cooked and sold) built extremely strong supply chain barriers locally in Anhui.
  • Founder Shu Congxuan's internet-famous personalized marketing—tearing up pay-cut letters, country-style press conferences, and 'gogodak' interactive codes—achieved viral brand breakout with minimal advertising spend.
  • In 2024, the average table turnover rate was 4.4 times (4.8 times for direct stores), far exceeding the industry average of under 3 times, proving exceptional single-store operational efficiency.
  • A private-domain traffic pool of 12.2 million active members and 500,000 paid members ensures extremely high brand stickiness.
  • Insisting on using Feixi old mother chickens raised for 180 days rather than white-feathered broilers; ingredient differentiation is a core competitive edge.

Lessons

  • An asset-heavy entire industry chain model is a moat locally but a stumbling block across regions—doubling cold-chain transportation costs means faster out-of-province expansion brings higher risks.
  • The Chinese fast-food market is extremely fragmented, with the industry leader holding a market share of only 0.9%; the 'scale narrative' by itself is not a logic the capital markets will buy.
  • Marketing buzz generates traffic but cannot solve gross margin problems—Laoxiangji's advertising expense is below 3% of revenue, yet gross margin remains merely 22.8%.
  • An IPO is not the finish line, but a magnifying glass that exposes problems—social security compliance, food safety, and slowing growth have nowhere to hide in front of a prospectus.
  • Franchising is not a silver bullet—franchised stores make up 44% of outlets but contribute only 20% of revenue, indicating that brand momentum cannot be transmitted to franchise terminals.
  • The failure of Chinese fast food to successfully produce a listed company is not unique to Laoxiangji, but reflects the concentrated challenge of standardization and cross-regional replication across the entire track.

Core Data

  • 2024 Revenue：6.288 billion RMB (Company disclosed figures, as of 2026, independent review unverified)
  • 2024 Net Profit：409 million RMB (Company disclosed figures, as of 2026, independent review unverified)
  • 2024 Gross Margin：22.8% (Company disclosed figures, as of 2026, independent review unverified)
  • Jan-Aug 2025 Revenue：4.578 billion RMB (Company disclosed figures, as of 2026, independent review unverified)
  • Total Stores as of Aug 2025：1,862 (Company disclosed figures, as of 2026, independent review unverified)
  • Franchise Share as of Aug 2025：44% (Company disclosed figures, as of 2026, independent review unverified)
  • Stores in Anhui Province：750 (Company disclosed figures, as of 2026, independent review unverified)
  • East China Store Share：86% (Company disclosed figures, as of 2026, independent review unverified)
  • Active Members：12.2 million (Company disclosed figures, as of 2026, independent review unverified)
  • Paid Members：500,000 (Company disclosed figures, as of 2026, independent review unverified)
  • 2022 Valuation Peak：18.1 billion RMB (Company disclosed figures, as of 2026, independent review unverified)
  • 2025 Hurun Valuation：9 billion RMB (Company disclosed figures, as of 2026, independent review unverified)
  • Industry Market Share 2024：0.9% (Company disclosed figures, as of 2026, independent review unverified)
  • Table Turnover Rate 2024：4.4 times (Company disclosed figures, as of 2026, independent review unverified)

Competitors / Peers

The Chinese fast-food track is extremely fragmented. Although Laoxiangji ranks first in the industry with a 0.9% market share, the competitive landscape it faces is exceptionally complex. Already-listed Xiaocaoyuan boasts gross margins exceeding 65%,乡村基 (乡村基) exceeding 56%, and Green Tea Group nearly 69%, all far outperforming Laoxiangji's 22.8%. Laoniangji pivoted to the NEEQ after stumbling in its Shanghai Main Board sprint, while Yangguofu Maangatang, Hefu Mian Guan, and others are also queuing for IPOs. Meanwhile, sinking-market beverage brands like Mixue Ice Cream & Tea, Guuming, and ChaPanda have successfully completed bell-ringing ceremonies to become capital market benchmarks. In contrast, the failure of the Chinese fast-food track to successfully produce a listed company indicates that industry-wide standardization and capitalization dilemmas are far greater than any single brand's issues.

Sources

Related

Same industry / scale
Food & BeverageChina

Chun Shui Tang: From Foam Black Tea to the Bubble Tea Invention Dispute, How a Tea House Defined Global Tea Culture

Food & BeverageChina

Tastien: From Sluggish Pizza to a Rapid Expansion of 10,000 Chinese-Style Burger Stores

Food & BeverageChina

Manner Coffee: From a 2-Square-Meter Stall to a 2,000-Store Specialty Coffee Unicorn by Han Yulong, Relying on Semi-Automatic Machines to Bear the Pain of Scaling

Food & BeverageSoutheast Asia

Kopi Kenangan: Indonesia's Fastest Coffee Chain (Palm Sugar Milk Coffee)

⚠️ This entry draws on self-reported accounts and public reporting, not independently verified, and is not investment, startup, or legal advice; revenue figures are case-specific and not representative of typical results.