How Da Niang Dumplings and Bellagio Cafe Are Performing Under GreenTree

This is an English adaptation of a FoodBud historical article originally published on December 11, 2023.

In May 2022, GreenTree Hospitality Group announced that it would acquire 100% of Da Niang Dumplings and 83.6% of Bellagio Cafe from its subsidiary GEM Group for RMB 400 million. The transaction was completed in the first quarter of 2023.

Previously disclosed figures showed the two restaurant brands had combined unaudited revenue of about RMB 740 million in 2021.

According to GreenTree’s 2022 annual report, Da Niang Dumplings and Bellagio Cafe generated RMB 509 million in revenue in 2022, down 31%.

Store Base at the End of 2022

As of December 31, 2022, Da Niang Dumplings operated 236 stores across 35 cities:

• 99 company-operated stores
• 137 franchised stores

Bellagio Cafe had 36 stores:

• 27 company-operated stores
• 9 franchised stores

2023: Smaller Footprint, More Franchising

GreenTree’s third-quarter 2023 disclosure shows the group reduced the restaurant store base, with some operating metrics improving.

In the third quarter of 2023, average daily sales across GreenTree’s restaurant stores reached RMB 6,548, up 7.4% year on year.

The company also increased the share of franchised stores to 74.8%. At the same time, it expanded the number of street-side stores to 60 and closed 10 unprofitable stores during the quarter. Over the previous 12 months, it had closed 85 stores.

For the first three quarters of 2023, total restaurant revenue was RMB 350 million, down 13.7% from the same period in 2022. Third-quarter restaurant revenue was RMB 120 million, including RMB 80.4 million from company-operated restaurant stores and RMB 17.2 million from franchised stores.

Store Count and Channel Mix

By the end of the third quarter of 2023, GreenTree’s restaurant portfolio had 206 stores:

• 52 company-operated stores
• 154 franchised stores
• 53 cities covered

Of the RMB 6,548 average daily sales per store, dine-in accounted for 64% and delivery accounted for 36%.

New-store openings had declined continuously from 2019 to 2021. By the third quarter of 2023, new openings had narrowed to only six franchised stores.

By location type, GreenTree’s restaurant stores in the third quarter of 2023 were distributed as follows:

• Shopping malls: 64.6%
• Street-side locations: 29.1%
• Transport hubs: 6.3%

Note: acquisition and operating figures are historical and reflect disclosures available for 2021-2023.