Equity Structure Design and Dynamic Financial Monitoring for a Rice Noodle Chain in the Sichuan and Chongqing Region

Project Background

The client, a rice noodle chain with 15 directly operated stores in the Sichuan-Chongqing region, planned to introduce three new partners (including financial investors and regional resource providers) to expand to 30 stores. However, conflicts arose among existing and new shareholders over equity distribution due to differences in capital contributions (totaling 8 million RMB), resource contributions (supply chain support and regional site selection), and risk-sharing ratios. Additionally, the client faced challenges with dispersed financial data (60% manually recorded), making it impossible to monitor new store investment progress and single-store profitability in real time. The client urgently needed a fair equity structure and a dynamic financial control system.

Project Execution

We assembled a team of equity design experts, financial analysts for the chain industry, and legal advisors to address these challenges. In the equity structure design phase, we developed a contribution quantification model to convert shareholder capital (60% weight), resource value (supply chain discounts + regional resource exclusivity assessment, 30% weight), and management responsibilities (10% weight) into equity allocation coefficients. We designed a four-tier equity structure (headquarters holding + regional subsidiaries + store limited partnerships + option pool), ensuring the core founder retained 52% decision-making power. We also embedded performance-based clauses (resource providers had to secure 5 new store locations within 6 months) and a dynamic capital injection mechanism (financial investors would inject funds in phases based on new store survival rates).In the financial monitoring system deployment phase, we deployed a cloud-based financial platform to integrate POS, supply chain, and HR data. We customized a 12-key metric dashboard (e.g., single-store labor efficiency, ingredient loss rate) with T+1 data updates and established a traffic light warning system (automatically issuing rectification checklists for stores with gross margins below 20%). Additionally, we generated monthly decision-making packages for shareholders to provide actionable insights.

Project Outcomes

After implementation, all shareholder agreements were signed within 7 days, with resource providers fulfilling 100% of their site selection commitments and the first tranche of 6 million RMB being injected as planned. The financial platform reduced new store cost overruns from 35% to 8%, and 11 out of 12 new stores opened within 6 months achieved profitability within 3 months (average gross margin of 28%). The warning system identified abnormal labor costs at 3 existing stores, reducing monthly expenses by 15%. A "Sichuan-style snacks + combo meal" strategy increased daily revenue at 2 new stores by 40%.The project also delivered a 《Regional Expansion Gradient Map》 based on store clustering analysis, identifying eastern Sichuan’s lower-tier markets as the primary expansion zone. This contributed to a 30% increase in the client’s potential financing valuation and a 27% exceedance of annual net profit targets, providing a replicable governance model for the chain restaurant industry’s capital-driven expansion.