From four hotpot tables to HaidilaoHow did Zhang Yong build an advantage through service?

Four tables and a clear disadvantage

Haidilao was founded in 1994 in Jianyang, Sichuan, China. According to Forbes, Zhang Yong's first restaurant had four tables. He did not come from the restaurant industry and admitted not knowing traditional Sichuan hotpot preparation when starting.

Three friends helped provide initial funding, including Shu Ping, later his wife and Haidilao cofounder. Zhang lacked clear advantages in capital, cooking technique or scale. Instead of competing on assets he did not possess, he focused on what a small restaurant could control from day one: customer service.

Forbes says Zhang slept on a folding bed in the first restaurant. He observed what pleased customers, listened to feedback, offered suitable incentives and sought reasons for them to return. From a practical choice, service gradually became central to Haidilao's identity.

When service becomes a competitive choice

A small restaurant often struggles to differentiate sustainably through food alone. Recipes can be learned, competitors can match prices and attractive locations can gain rivals. Customer experience offers another path because it combines many small touchpoints before, during and after a meal.

Haidilao is known for caring for waiting customers, snacks, proactive employees and service exceeding expectations. These manifestations are not the whole advantage. A rival can quickly copy gifts or free services but struggles to copy organization-wide coordination producing consistent experiences.

The lesson is that Haidilao does not treat service as a short promotional campaign. It is embedded in recruitment, training, empowerment, manager assessment and employee-customer relationships.

Behind the experience: people, autonomy and operating discipline

To enable thousands of staff across restaurants to deliver suitable experiences, a company needs more than instructions. Frontline staff must understand service objectives, their decision scope and accountability for outcomes.

Haidilao's listing prospectus emphasizes employee respect, service quality and developing managers internally. Forbes also notes Zhang's view that responsibility and autonomy express trust. This matters because customer experiences often hinge on situations that cannot wait for multiple approval levels.

Empowerment does not mean unrestricted action. Safety standards, cost limits, reporting and accountability remain necessary. Only autonomy combined with operating discipline enables personalization without losing consistency.

From four tables to more than 1,500 restaurants across two reporting systems

As of December 31, 2025, Haidilao International reported 1,383 restaurants within its scope: 1,304 self-operated and 79 franchised. International operations had been separated into Super Hi International, which operated 126 Haidilao restaurants in 14 countries at year-end 2025.

Across the two reporting systems, Haidilao had more than 1,500 locations. This is far removed from the first four-table restaurant, but the scope must be stated correctly: Haidilao International and Super Hi International are separate reporting entities.

The 2025 picture shows that scale does not guarantee easy growth. Haidilao International reported RMB 43.23 billion revenue, up 1.1%, while profit fell 14%. Guest visits declined 7.5% to 383.9 million, and self-operated restaurant table turnover fell from 4.1 to 3.9 times daily.

Internationally, Super Hi reported USD 840.8 million revenue, up 8%, and 32 million guest visits. These differences show one brand can face different growth rhythms and operating challenges by market. Service is important, but results also depend on premises, products, pricing, supply chains, management and local competition.

The lesson is not copying Haidilao's visible extras

A business can add snacks, waiting activities or small staff-given gifts. These can create initial impact but not an advantage if experience depends on a few enthusiastic individuals or service costs outgrow customer value.

Competitive advantage must pass three tests: do customers genuinely value it; can the business deliver consistently across outlets; and is the whole supporting system hard for competitors to copy? Without one, service can easily become decorative expense.

Haidilao illustrates the gap between an easy-to-tell idea and a hard-to-build capability. The gap comes not just from one caring gesture but from people and operating decisions repeated over a long period.

From one small action to organization-wide capability

Many businesses seek advantage by adding products, discounting or raising ad budgets. These may deliver short-term results but often invite easy competitive responses. A well-designed experience can be more durable if linked to operating organization rather than only promotion budgets.

A small shop can start by serving better at one specific moment. As it grows, the question is no longer whether the founder cares well for customers. It is whether the system helps thousands of staff understand customers, solve problems proactively and maintain cost discipline.

That is the transition from individual dedication to organizational capability—and the largest gap between a good business idea and a business built for the long run.

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