Why has Wendy's plan to open 1,000 stores in China failed to materialize? Haidilao is alleged to have "failed to reach an agreement".

Wendy's, one of the "Big Three" American hamburger chains, previously announced a plan to open 1,000 stores in China, but the plan has still not been implemented.

Recently, two food and beverage industry insiders told FoodInc that Wendy's had contacted Haidilao, but the two sides ultimately failed to reach a cooperation on franchising. It is reported that Wendy's is still looking for partners in the Chinese mainland market, including contacting some capital parties.

In response to the above statement, FoodInc sent an email inquiry to Wendy's U.S. headquarters today. As of press time, Wendy's has not yet responded. Although its partner for the Chinese market has not yet been confirmed, coupled with the major reshuffle of Wendy's global management team in recent months, the Chinese mainland hamburger market still has certain attractiveness, attracting numerous brands to scramble for a share of the market.

Now, let's take a look together.

Farewell to Haidilao?

When it officially announced its entry into the Chinese mainland market, although Wendy's kept the identity of its partner secret, the keywords it gave once made Haidilao one of the popular guesses.

Looking back five months ago, Wendy's announced that it had signed a franchising agreement for the Chinese mainland market with a large catering enterprise, planning to open 1,000 restaurants within ten years. This is also the largest franchising agreement in Wendy's history.

Ken Cook, then interim CEO and CFO of Wendy's, revealed that the company's partner is "a large catering operator with decades of experience in China, known for its strong hospitality". The two sides are working closely to formulate an implementation plan, and the name of the partner will be announced when the first store is nearing its opening.

This description once sparked public speculation that Wendy's partner would be a company such as Yum China or Haidilao. However, insiders in the catering chain industry analyzed that due to non-compete agreements, Western fast food chains operating in China through franchising such as Yum China, McDonald's, and Burger King can be ruled out. The partner is likely to be a Chinese catering enterprise.

In this regard, a catering industry insider told FoodInc that Wendy's had negotiated with Haidilao on this matter, "but the negotiation failed". Another catering management person said that the failure of the negotiations between the two sides was due to differences in the revenue sharing ratio. As of press time, the above statement has not been confirmed by Haidilao.

It is worth noting that when Wendy's is pushing forward its entry into China, Haidilao's business strategy has also changed, including that its brand diversification has shifted from extensive expansion to a more focused approach. In addition, its hot pot business has not yet fully recovered, so creating a foreign hamburger brand from scratch at this time will undoubtedly distract energy and resources. Therefore, the phased strategic misalignment may be another reason why the two sides went separate ways.

According to the statement from Haidilao's management at the 2026 interim results meeting, in the first half of the year, the group's multi-brand business officially shifted from scale expansion to efficiency improvement. In the future, it will concentrate resources to support verified potential projects, and at the same time adjust and integrate stores or brands with immature business models. At the meeting, the group designated Haidilao Street Hot Pot and Sushi YI as its main diversification brands. The former YANQI Roast Meat Shop, which once had a large number of stores, has experienced a round of store closures.

The "Hard" Mode

In fact, against the backdrop of intensifying competition in China's catering chain industry, many brands are cautious about diversification and seek incremental growth from their main business. For example, many Chinese catering chains have closed their sub-brands opened in the early years, concentrating resources back to the main brand; most coffee and tea brands also expand their product categories by upgrading the capabilities of existing stores, rather than opening independent new brands.

This shift may have prompted Wendy's to shift its key search scope for partners from catering enterprises to capital parties. The aforementioned catering management person analyzed that in addition to the changes in industry trends, seeking to cooperate with capital parties may also be because Wendy's wants to gain stronger dominance in the Chinese mainland market.

"On the one hand, capital parties generally judge projects based on feasibility and profitability, rather than intervening in or controlling the brand, while catering enterprises often seek in-depth participatory management. On the other hand, capital enterprises can often connect to more resources, such as digitalization, real estate and other fields. Wendy's may hope to find resources to support its business development in China," the person speculated.

However, some people believe that it is more difficult for Wendy's to enter the Chinese mainland market through capital parties.

"Capital players are all very shrewd. In China's catering market, the most competitive market in the world, Wendy's has not yet shown any competitiveness. Some hamburger chains that were relatively competitive in the United States in the past have made little splash in China in recent years. It's too late for Wendy's to catch up now," said a Western catering industry operator.

Harry Han, senior analyst of the catering industry at Euromonitor International, believes that the core challenge Wendy's faces in entering the Chinese mainland is how to build a differentiated local single-store model with low cost in a late-entering and price-sensitive market. For example, consumer mindshare and high-quality store locations have already been occupied by mature brands; as the average per-person spending of fast food declines, the halo of overseas brands is no longer enough to support high pricing; the construction of menus, membership systems, marketing and other links all need to adapt to the Chinese market.

Not only the "hard mode" of China's catering market, but Wendy's personnel adjustments have also added variables to its road to entering China.

After announcing its entry into the Chinese mainland, Wendy's management underwent a major reshuffle, with the CEO, Chief Financial and Strategy Officer, and Chief Marketing and Customer Growth Officer all coming from outside the company. These external senior teams often carry out comprehensive reforms and adjust strategic routes in the company. More importantly, their top priority is to put out fires in their home U.S. market. In contrast, international expansion is no longer as important and urgent.

FoodInc noticed that during Wendy's 2026 Q2 earnings call, there was no content related to the Chinese market throughout the meeting, and the international business was only briefly mentioned in a few sentences. The focus of discussions between the senior management and analysts was on how to repair the U.S. business.

According to Wendy's Q2 report, in the quarter ending June 28, the company's global system sales decreased by 6.5%, mainly due to an 8.2% decline in the U.S. market, partially offset by a 3.4% growth in the international market. In terms of same-store sales, the U.S. market decreased by 7.0%, and the international market decreased by 2.3%.

"Our foot traffic, value proposition and franchisee earnings all failed to meet expectations," said Bob Wright, the new CEO of Wendy's. The company has begun to take actions to promote recovery, including rebuilding cost-effective menus, launching marketing campaigns that can stimulate demand, improving operational efficiency, creating a digital experience that can increase customer visit frequency, and building restaurants into growth engines. It can be seen that international expansion is not on the new leader's current "key task list".

Hamburger War

Although it is not yet clear whether Wendy's schedule for entering the Chinese mainland has changed, it is certain that the hamburger market it targets will only become more and more competitive.

According to the "2025 China Western Fast Food Industry Development Status and Consumer Behavior Survey Data" released by iiMedia Research, among the Western fast food dishes preferred by Chinese consumers in 2025, hamburgers ranked first with a share of 55.03%. Among the preferred combinations of Western fast food consumption, hamburgers appear in the top two combinations, namely hamburger + snacks + drinks, and hamburger + snacks.

In this most popular category, foreign brands include KFC, McDonald's, Burger King, etc., while local brands include Wallace and Tastien. In addition to these mass brands, there are also high-end hamburger brands such as Shake Shack and Five Guys in China. That is to say, there are many representative players in the hamburger market at different tiers of cities and different price ranges.

At the same time, more cross-border players are pouring into the track, but most of those who can gain certain popularity are catering chains with brand and supply chain foundations, rather than complete new entrants. For example, Pizza Hut, backed by Yum China, launched the innovative module "Pizza Hut Burger" this year. It opens stores in a "side by side" mode (i.e. opens stores relying on existing restaurants), and the stores focus on freshly made hamburgers ordered on the spot in an open kitchen, which is deeply loved by young consumers and the single-person dining group.

With this module that emphasizes differentiated product strength, "Pizza Hut Burger" is expanding rapidly.

Joey Wat, CEO of Yum China, once said that the team reached a clear consensus at the beginning of deciding to launch Pizza Hut Burger: Pizza Hut Burger must be highly unique and clearly differentiated from KFC and many other players in the market. For example, the bread is freshly baked in the store, the patty is freshly fried after ordering, and the product focuses on high quality and high cost performance. The company plans to accelerate the promotion of the Pizza Hut Burger module in the second half of the year, reaching 500 to 600 stores by the end of 2026, accounting for about 10% of Pizza Hut's nearly 5,000 stores.

In addition, ice cream chain DQ opened its first hamburger store DQ BLIZZARD & BURGERS in China as early as 2024, and it is developing steadily. Last year, Alan Hsu, CEO of CFB Group, told FoodInc that the group planned to open about 50 more hamburger stores within three years (note: CFB Group is one of the operators of DQ in China).

Alan Hsu added that affected by the downward trend of catering consumption, DQ's hamburger stores have adjusted their menus and added a number of medium-priced set meals at around 30 yuan. "Our entire product line is now richer and more diversified, meeting the needs of consumers at different price points. The effect after the adjustment is very good, so we decided to accelerate the pace of store opening."

On this crowded hamburger track, Wendy's may be able to open the door to the Chinese market with the help of a resource-rich partner. But the real test is not limited to finding a partner, but whether it can maintain this partnership for a long time, and build differentiation and scale in the highly competitive market.

Original title: Why has Wendy's 1,000-store opening plan in China not been implemented? It is reported that the negotiation with Haidilao failed, the new management is busy with local adjustments, and one of the "Big Three" American hamburger chains may need to find a new partner

This article is from the WeChat official account "FoodInc" (ID: foodinc), written by Pan Xian, authorized for release by 36Kr.