Chapter Five: Partnering Franchisees

No one spoke; regardless of how hot it was, they each grabbed one and popped it into their mouths. The first bite was crisp on the outside, soft within, and fragrant with flavor.

Seeing everyone enjoying the food, Yang Cheng said, "Among the products I plan to present today, noodles and dumplings are only two. Let’s not sample too much for now. I trust you’re all full by now—any more and it would no longer be enjoyable.”

Everyone chuckled, curiosity and anticipation growing in their hearts for what else might be revealed.

Yang Cheng then pulled aside the cloth hanging on the wall, revealing his drawings of various foods. Using a bamboo pointer, he indicated the first, “Please look, this is the dumpling you all tasted yesterday. The filling can be meat or vegetables, with a variety of flavors. It can be steamed for a delicate, smooth taste, and if served with dipping sauces, the flavor is even better. They can be pan-fried, crispy on the outside and tender within, or boiled…”

“This is the noodle; it can be…”

“These are fried dough sticks…”

“This is soy milk…”

“These are biscuits… and these are glutinous rice balls…”

Yang Cheng explained each one in detail. Noticing the surprise on everyone’s faces, he paused and continued: “In Wuzhou City, our staple food is mainly coarse grains, and the flavors are rather monotonous. Though there is plenty of meat, it is mostly steamed, boiled, or roasted. All of you run taverns, catering to travelers and guests. However, from what I understand, there aren’t many outsiders in Wuzhou—apart from a few merchants and cultivators. There are few who need lodging, and even fewer who stop in just for a meal. Forgive my bluntness, but business at your taverns isn’t exactly thriving.”

Since they were all tavern owners and well aware of each other's situations, none felt embarrassed. They sighed; the business barely provided enough to keep their families fed but would never make them wealthy. Many even took on other trades—like the stout man, who ran both a tavern and a general goods store, with several ventures so he wasn’t overly concerned about his tavern’s income.

Yang Cheng had chosen these small tavern owners precisely because they were struggling and needed a breakthrough. If he’d approached the larger establishments, they might have scorned cooperation with a small operator like him.

“Have any of you considered,” Yang Cheng asked, “that since there are so few outsiders, why not shift focus to doing business with the locals?”

The stout man replied, “Young Master Yang must be joking. Taverns have always been for travelers to rest their feet. Locals have food and lodging at home—who would waste money eating out at a tavern for no reason?” His words brought another round of laughter.

Indeed, Wuzhou City was vast, and unless people from the East, West, or North Districts came on business, needing a meal and a place to rest, the locals would never visit a tavern. They lived close by, and the food and drink at home tasted the same; there was no reason to spend money at a tavern.

Yang Cheng said, “That’s how it has been, but what if the taverns offered food better than what people could make at home? Who would refuse the occasional indulgence? For those who eat plainly every day, a change of taste might be welcome. For celebrations, to host friends, who wouldn’t want delicious food to satisfy the palate? If your taverns offered these new dishes, how would that impact your business? Noodles, dumplings, buns, fried dough sticks—these are perfect for breakfast before heading out for the day. Over time, the habit of eating breakfast at the taverns in our South District would catch on, fostering a new custom and guiding consumer behavior. The people living nearby would form the habit, and once established, it would greatly improve your business.”

Everyone seemed to ponder this. Yang Cheng continued, “Today, I’ve invited you to propose a partnership with some of you. I will act as your supplier, providing goods for your taverns. Which of you is interested?”

Their eyes lit up. “Young Master Yang, we’re all interested. What about the price?”

“It’s like this,” Yang Cheng replied. “I’ll be looking for franchise partners throughout Wuzhou. I’ll supply the goods; the taverns sell them. The franchise fee is eight hundred spirit coins, plus a ten percent cut of your daily sales.”

Everyone frowned. The commission was acceptable, but the franchise fee seemed rather high.

Yang Cheng continued, “I understand you might be hesitant about this concept of guiding consumer habits, and that's reasonable. Therefore, for the first wave of partners, I will select twenty-five establishments in the South District. For these first partners, the franchise fee is only five hundred spirit coins each.”

There was a buzz of conversation; even five hundred was no small sum.

Someone asked, “Young Master Yang, isn’t this franchise fee still too high? What if we simply pay you for the goods we take, buy and sell as needed? Wouldn’t that be easier?”

“Yes, that would be much simpler for us.”

Yang Cheng explained, “The franchise fee is actually an authorization. Once you become a partner, I won’t work with any other taverns within a two-li radius. Not only can you sell to your own customers and attract more business, but you can also supply surrounding taverns at a lower price and earn the difference. Moreover, if large families need a lot, they’ll have to come to the local partner.”

Everyone suddenly understood. With this arrangement, securing a partnership meant no competition nearby and the opportunity to act as a supplier.

Seeing many of them swayed, Yang Cheng went on, “Let’s do some math. For example, with dumplings and noodles, we set a standard price of twenty silver coins per serving. The South District has over twenty-eight million people, at least six million of whom can afford to buy. Our supply will fall far short of the demand. Even if each tavern sells just one hundred servings a day, after deducting my share, you’d earn about eighteen hundred silver coins daily—that’s eighteen spirit coins. That’s far better than the few dozen silver coins you make now on lodging. In one year, you could make a minimum of six thousand five hundred and seventy spirit coins.”

“This…”

“It does sound possible.”

“If you add supplying the surrounding taverns, the profit could be much higher.” The discussion grew lively.

But someone raised a concern: “Isn’t twenty silver coins per serving too expensive? And as more partners join, won’t some lower their prices, leading to less profit for everyone?”

Yang Cheng replied, “Rest assured, since we’re partners, we form a kind of guild. We currently have the advantage, so standard pricing is mandatory. Anyone who refuses will be excluded. For now, these foods are rare, so our customers will be those with money—higher profit for less effort. In time, as more shops sell these foods, prices will drop, but that’s nothing to fear. Each price drop opens up a new group of customers who can afford them, filling the profit gap.”

Everyone nodded in agreement.

“Of course, over time, people will try to imitate these foods—it’s inevitable. But that’s not a problem. First, the cost of research and production is too high—it’s not worth it for you. By giving me a modest share, you save yourself trouble and expense and can focus on selling or developing your own tier of vendors.

“Second, as you see, the Yang family will continue to develop new food products, and franchise partners will have priority. Any copycat shops will be denied cooperation, and we will always improve quality and variety to keep you competitive.”

Yang Cheng addressed all their worries.

Some shopkeepers gasped, realizing, “This really is a great deal.” Some had been thinking about figuring out the recipes and methods themselves, but now saw there was no need. Not only would they risk losing the first-mover advantage, but if their version didn’t taste good, it would damage their reputation. It was better to share a small portion of profits and save effort, focusing on sales and supply to seize the market first.

Yang Cheng had considered that these foods weren’t technically complex, and anyone determined enough could soon learn to make them. All he could do was buy time with this arrangement, and he wasn’t placing all his hopes on these simple snacks—his real aim was to build some capital. Once these foods became common, standard pricing would give way to price wars, and profits would thin, so only large-scale sales would earn much, but that would also mean higher labor costs. At that point, he’d have to give up part of the market and let others develop it, contributing to the culinary diversity of this world.

“To be frank, I will select twenty-five partners in each of the East, South, West, and North Districts as the first franchisees for these two foods. If you’re interested, sign up and sign the agreement quickly. In future, if others seek partnership, the price will be eight hundred. But my agreement guarantees that within a two-li radius, there will be no other franchisee selling the same food.”

The stout man was the first to speak up: “I’ll sign up.”

“And me.”

“Count me in.”

Several people stood up at once.

Many others hesitated—the five hundred spirit coins was no small amount, and few were carrying that much on them; even if they returned home, they’d have to scrape together the funds.

“Those interested, please queue up at the table to sign,” Yang Cheng said, bringing out the prepared agreements.

Boss Liu of Gathered Guests Pavilion was first in line. After reading the agreement and finding it matched everything Yang Cheng had said, he nodded. “Young Master Yang, we haven’t brought so many spirit stones with us. May we send someone with the payment later?”

Yang Cheng nodded, and Liu happily signed, keeping one copy and leaving one for Yang Cheng.

One after another, the agreements on the table were used up—exactly twenty-five in all. Those at the back of the line protested, “Young Master Yang, I came in good faith, but I was just too late. We can’t just go home empty-handed, can we?”

“Yes, yes, Boss Zhang was quick on his feet, but those of us in the back couldn’t get through.”

“That’s right, Young Master Yang, we all want to cooperate. Can’t you add a few more spots? If we wait for the second round, it’ll be eight hundred.”

“It’s not fair—we all came together,” the ones at the back began to clamor.