One hundred and twenty‑five days after a public spat over “pre‑made” dishes with influencer Luo Yonghao, Xibei — once a poster child for standardised Chinese restaurant chains — is in open decline. The firm has closed roughly 102 outlets as its network shrank from a peak of about 370 stores to roughly 270, and losses have reportedly exceeded RMB 500 million, while thousands of staff face unemployment.
The crisis has been as much about personality as it has been about product. Founder Jia Guolong answered early criticism with combative public messaging and a series of emotional, highly visible gestures: open‑kitchen spectacles, repatriating central‑kitchen processes to stores, steep discounts and vouchers, and an across‑the‑board RMB 2,000 pay rise for staff. Those moves burned cash, disrupted operations, and failed to restore customer trust.
Xibei’s tactical responses misdiagnosed the problem. Consumers were not only asking where dishes were prepared; they asked whether the food was worth the price. The transparency stunts created operational chaos, price cuts and coupons rewarded bargain hunters rather than loyal customers, and reintroducing labour‑intensive steps into stores undermined supply‑chain stability and raised unit costs.
The fallout has been organisational as well as financial. Xibei’s PR apparatus appears to have collapsed: a senior public‑relations executive has left and external PR ties were reportedly severed, leaving the founder to manage the narrative himself. Jia’s long, emotional public post — emphasising personal sacrifice and pleading moral vindication — has done little to arrest the reputational slide and has alienated a public uneasy about his combative stance.
For investors the problem is governance, not cuisine. Xibei had publicly flagged a goal of a high‑quality IPO by 2026, and had brought in outside capital and employee share plans in recent years. But a founder who treats consumer complaints as enemies to be fought, who makes sweeping operational reversals in public, and who presides over large, discretionary cash outlays, becomes a “single‑point‑failure” risk for capital markets.
Operational metrics underline the scale of the challenge. Monthly revenues at many stores have reportedly fallen from one‑to‑two million yuan to RMB 700,000–800,000, while fixed monthly costs for a typical 400‑square‑metre outlet approach RMB 500,000. That combination turns price promotions and wage hikes into liquidity accelerants rather than stabilisers; Xibei spent what staff called “two or three hundred million” on coupon campaigns that did not translate into sustainable customer retention.
Regulatory and disclosure risks are also rising. The public, headline‑grabbing escalation of a consumer complaint into a full‑blown corporate crisis has exposed supply‑chain and compliance practices to heightened scrutiny. Lawyers warn that exchanges will probe any irregularities vigorously; a prolonged, founder‑led dispute invites regulatory and investor due diligence that can stall listing plans indefinitely.
Xibei’s decline illustrates a broader lesson for fast‑growing Chinese consumer brands: brand equity is fragile, and founders’ reputations are now inseparable from corporate risk profiles. Where once a hardline, tell‑it‑like‑it‑is founder could win public sympathy, repeated confrontational episodes and erratic strategy choices have converted early goodwill into investor wariness and customer scepticism.
Recovery will require more than a PR fix. Stabilising the business will demand disciplined cash management, a return to consistent quality and value, rebuilding supply‑chain reliability, and bringing professional governance and communications back into the centre of decision‑making. Whether Xibei’s leadership can cede control over the narrative long enough to deliver those changes will determine whether the chain can salvage its market position — and its IPO prospects.