A 21-year-old asked his money grandmother to open a street line stand. Now it is the largest fast food chain in the world, eclipses McDonald’s

• It may surprise you to learn The fact that the largest fast food chain in the world is not an American staple food like McDonald’s or Starbucks. It is actually mixed, an ice cream and a boba store founded in 1997 which exploded in popularity in China and throughout Asia. Zhang Honghao was a university student when he created the first mix of mix; Now it’s a billionaire.

McDonald’s was founded 85 years ago in San Bernardino, California. It is the second largest private employer in the world – that Walmart, n ° 1 in fortune 500, and has more than 40,000 locations worldwide.

However, McDonald’s is still late on a company in terms of imprint: mix with ice cream and tea.

Mixue, in March, is currently the largest fast food chain in the world by stores, with more than 46,000 sites in Asia, Australia, the Middle East and South America. About 40,000 of its total locations exist in continental China, which means that the company has even more room to operate on a global scale. And the company has performed well since its beginnings in March on the Hong Kong Stock Exchange, leaving its opening price of $ 290 HKD per share at $ 584.50 HKD Monday morning.

Zhang Hongchao probably did not expect to be the founder of such a giant when he opened his first hiking stand 28 years ago.

Humble beginning

Zhang frequented the University of Economy and Henan law when he had the idea of ​​opening a food stand, mainly to sell drinks like cold drinks and shaved ice. He asked his grandmother to borrow 3,000 yuan – more than $ 362 at the time, or $ 417 today – to open a small stand in the streets of Zhengzhou, the capital of the Chinese province of Henan and a large international transport center.

The stand succeeded, even at the beginning. According to a long profile on mix in the state of sale of China Sina News,, Zhang was able to sell products of a value of up to 1.5 yuan for more than 100 yuan; In other words, it could make a drink that costs around 21 cents and sell it for more than $ 14.

Unfortunately, Zhang’s inexperience and Zhengzhou’s rapid modernization would become obstacles. The villages of Zhengzhou were constantly subject to demolition efforts when the region became more urban, which led to the demolition of the Zhang store three times in a single year, according to Sina News. And he learned how hard how difficult it is to sell cold treats during the winter season, which forced him to sell Mandarin oranges for additional species.

Get the right formula

Despite the reverse, Zhang remained there. He bought more machines, added more sugary drinks to his menu and notably introduced a mild ice cream horn for only 1 yuan, or around 14 cents, which solidified the brand among consumers concerned about the budget.

The company also obtained stronger operational chops when Zhang called on his younger brother, Hongfu, to help manage the company in 2007. Since many mixed franchisees were led by friends or family, few Zhang rules or regulations have applied; This has changed when Hongfu, which now acts as the CEO of the company, took the reins. (The older brother Honghao Zhang, the founder, is president.) One of the most important things that Hongfu has been to present store managers, which finally helped the two brothers to avoid disputes with family members who exploited some of their franchises.

While Mixue has added hundreds of stores over the years, the company has faced quality and consistency problems, as well as supply chain misfortunes when fruit or powdered milk ran in shortage. But sales have been rebounded while Zhang pushed new products like Boba Tea, and supply problems have been improved when Zhang decided to establish a storage base in 2014 which would collect the raw materials of farmers and produce its own materials as powders and snacks, essentially consolidating a large part of its supply chain.

In 2022, Mixue said he had warehouse and logistics bases in 22 different provinces, and the company intensified quality control efforts to avoid store closings. The mixture controls the selection of the site, the decoration of the stores, the training of the staff, the supply of raw materials and the food security to ensure the success of its franchisees.

Current success

In 2024, Mixue declared 4.4 billion yuan ($ 615 million) in profits, up 22% compared to the previous year, out of 24.8 billion yuan (approximately 3.43 billion dollars) of income, which was almost 40% year -round year. Its profit per share, 12.3 yuan ($ 1.71), also increased by 41% compared to 2023. The company’s supply and vertical property chain network has contributed to maintaining costs at only 30% of its sales income, compared to the industry average from 45% to 55%, according to a recent study published in the Journal of Fininch and Business Analysis.

Above all, the company continues to develop. He added 4,192 new franchisees in 2024 and opened more than 10,000 new stores, with a closing rate of only 3.5%.

While more than 99% of its 45,000 stores and more are franchised, franchise costs represent only a small percentage of its income. According to the company, most of its income comes from the sale of goods and franchise equipment, which are necessary to buy these items directly from Mixue.

Earlier this year, Mixue celebrated a successful first public offer, one of the biggest IPOs on the Hong Kong Stock Exchange this year, collecting $ 3.45 billion HKD, or $ 444 million.

As for the Zhang, Hongchao and Hongfu brothers maintain relatively low profiles, but would have a combined net value of $ 8.1 billion.

This story was initially presented on Fortune.com