20,000 Stores' "Poor Ghost Burgers" Voluntarily Delist, Who Forced Wallace into a Corner?

Annual revenue nearing 10 billion yuan, but profits are not even comparable to a popular noodle shop; 20,000 stores, only 10 million in funding over ten years; gross profit margin of 6%, less than a fraction of industry peers. On March 11, 2026, the topic “Wallace Officially Delists” trended on Weibo.

The brand that once warmed countless small-town youths and delivery workers with “3 burgers for 10 yuan,” and that once had more stores than KFC, McDonald’s, and Dicos combined, the domestic fast-food king, quietly removed its cap from the capital markets after nearly ten years listed on the New Third Board.

Once the news broke, many netizens’ first reaction was: “Will I never be able to eat such cheap burgers again?” Don’t worry, Wallace is still here. You can still buy a burger, a Coke, and a box of chicken wings for 10 yuan.

But when you look back, you’ll suddenly realize: the low-price era that carried a generation through the cheapest Western fast food has been like a constantly full green train, roaring through 25 years, and finally, at this station, quietly applying the handbrake.

01

“Jet Warrior” Counterattack: From 80,000 to 20,000 Stores

Talking about Wallace, you can’t avoid the legendary “Jet Warrior” story.

“After eating Wallace, the toilet becomes my hometown”—this joke has circulated on social media for over a decade, even being called the “Constipation Miracle Drug,” playing on the idea of “poison with poison.” Despite serious food safety issues, over the past 25 years, it didn’t crush the brand but instead became a kind of “anti-counterfeit mark.” For young people and students in county towns, the logic was simple: as long as the price is low enough, occasional gut training isn’t unbearable.

But have you ever thought about a question: How can a brand mocked online as “eat and then vomit” open 20,000 stores?

Rewind to 2001. Outside Fujian Normal University, Wenzhou businessmen Hua Huaiyu and Hua Huaiqing pooled 80,000 yuan to open the first Wallace. At that time, KFC and McDonald’s had just entered China, representing the “middle-class civilized first experience” for post-80s—sitting by the bright floor-to-ceiling windows, eating a kids’ meal with a toy, a reward for being in the top ten of the class.

The Hua brothers initially wanted to copy this model, selling combo meals for over 20 yuan. But? “Stores were empty”—students weren’t fools; since they were going to spend 20 yuan, why not eat authentic ones? They had air conditioning, toys, and that shiny logo.

Wenzhou businessmen’s instinct told them: If they can’t beat face, then beat substance.

In 2002, Wallace launched the legendary “Special Price 123” campaign: Coke for 1 yuan, chicken leg for 2 yuan, burger for 3 yuan. Looking at it now, it was basically a “suicide attack.” But a miracle happened: long lines appeared at school gates, selling thousands of burgers a day, and revenue skyrocketed.

From that moment, Wallace found its survival philosophy: in the face of absolute low prices, brand, environment, and taste all had to give way to the wallet. The “Jet Warrior” joke was embedded in the brand’s DNA from the start—not because it didn’t care, but because it bet on: there will always be people who need that 10 yuan to fill their stomach.

Over the next 20 years, Wallace grew wildly like weeds.

It didn’t compete head-to-head with Western giants in first-tier cities but rooted itself in county towns, rural areas, around schools, and near bus stations—those low-rent, hard-to-penetrate corners. Data shows that in third-tier and below cities, Wallace stores once accounted for over 50%.

By 2022, Wallace’s store count exceeded 20,000, surpassing the combined total of KFC, McDonald’s, and Dicos at the same time. From 2019 to 2023, Wallace’s revenue soared from 2.5 billion to over 6 billion. In 2024, it even reached 9.993 billion.

A brand mocked online as “eat and then vomit” has, under the noses of Western giants, built an empire of fast food. Nothing in this world is without reason; every low price hides an invisible cost.

01

Gross Margin of 6%: Dancing on the Edge of a Billion-Yuan Revenue

The foundation of this empire is actually fragile.

Looking at the financial reports of Wallace’s parent company, Huashi Food, you’ll see shocking figures: in the first half of 2025, Huashi Food’s revenue was 4.625 billion yuan, with a net profit attributable to shareholders of 122 million yuan. At first glance, a 35.32% year-on-year increase looks good. But look closer at costs: In the first half, operating costs were 4.345 billion yuan, accounting for 93.96% of revenue, with a gross profit margin of only 6.04%, and an operating profit margin of 3.76%.

What does this mean? A popular noodle shop’s net profit margin can reach over 15%. But 3.76%—what does that really imply? Industry comparisons reveal how brutal this figure is.

According to the “2025 China Food Service Financial Analysis Report,” the average net profit margin in the domestic restaurant industry is about 5%. This means Wallace’s 3.76% operating profit margin is already below the industry average.

And how are its former “teachers” and “competitors” doing?

McDonald’s profit margin is 12 times that of Wallace. KFC’s per-store profit margin is 4.6 times Wallace’s. Even Dicos, which also targets lower-tier markets and faces similar difficulties, has a slightly higher net profit margin than Wallace.

This means Wallace sells 100 yuan worth of food but only keeps about 3.76 yuan; McDonald’s can take 46 yuan. With the same rent, rising raw material costs, and wages, Wallace’s profit margin is as thin as a sheet of paper—easily torn. While others can raise prices to survive, Wallace’s price hikes could kill it; others can invest in quality control, but Wallace cannot afford it; others can hire better staff, but Wallace can only rely on its “own people.”

Even more worrying is its debt. As of mid-2025, Huashi Food’s total liabilities reached 2.108 billion yuan, with a debt-to-asset ratio of 73.73%. In 2022, this figure was 1.085 billion yuan—doubling in just two years.

Why did debt soar? Because Wallace’s model requires continuous expansion, opening new stores, and squeezing suppliers to maintain that slim 6% profit. Once growth slows, the capital chain tightens.

In the first half of 2025, Wallace’s revenue declined by 0.49% year-on-year—the first negative growth in years. From 2022 to 2024, revenue growth slowed from 24.36% to 13.31%. Its “scale,” which once supported its survival, is also shrinking—by February 2026, Wallace had about 19,494 operating stores, nearly 500 fewer than in 2024.

With no further growth in scale and profits already thin, this giant ship is experiencing its “deceleration moment.” The truth of Wallace: a scale empire built on 3.76% profit margins, stacked like a house of cards.

03

Internal and External Challenges: The “Own People” Empire Being Overthrown by “Apprentices”

Wallace’s ability to reach 20,000 stores relies not only on low prices but also on a unique “Fujian model.”

What is the “Fujian model”? Simply put, “store crowdfunding + employee partnership”—when opening a new store, the headquarters takes about 50%, the store manager and core staff take 30%, and the remaining 20% goes to external suppliers or partners. Employees invest money and become shareholders, working harder than bosses: saving on electricity, paper, and turning even small savings into dividends.

This model solves a major challenge in chain restaurants: how to make store managers work like owners.

But it also harbors a hidden risk: when cost-cutting becomes everyone’s KPI, food safety becomes the first sacrifice.

To squeeze profit out of a 5-yuan burger, store operations began to deform. During the March 15, 2025, consumer rights day, reporters from Beijing News undercover visited Wallace stores in Zhengzhou and Hefei, discovering shocking scenes: expired ingredients still in use, frying oil with acid values exceeding standards by 60% after three days, and store managers openly admitting that “everyone’s health certificates are fake, obtained through intermediaries.”

Image source: Beijing News

“After eating Wallace, the toilet becomes my hometown”—the long-standing online meme “Jet Warrior” finally has a real-world footnote. On the Black Cat Complaint platform, nearly 14,000 complaints about Wallace involve issues like post-meal diarrhea and spoiled ingredients.

But the real deadly problem isn’t just internal sabotage of reputation; it’s that former “apprentices” are now executing a counterattack from outside.

This “apprentice” is called Tastin. Its founder, Wei Youchun, was a Wallace franchisee from 2011 to 2013, opening seven Wallace stores. In 2012, he launched Tastin independently, and by 2019, he found a differentiated positioning for “Chinese-style burgers”—using freshly baked hand-rolled buns instead of industrial bread, branding as “Chinese-style burgers.”

With the same low prices, Tastin took a completely different route.

Pricing-wise, the average per capita consumption is about 18 yuan, almost the same as Wallace’s 17 yuan. But with just a few more yuan, Tastin offers the “freshly made” feeling of hand-rolled dough in a visible kitchen, with trendy packaging that young people are eager to share on social media.

Expansion-wise, Tastin copied Wallace’s franchise model but grew faster. From fewer than 100 stores in 2019 to over 11,124 stores by late November 2025—breaking 10,000 stores in just six years. In contrast, Wallace took 18 years to reach 10,000 stores.

Capital-wise, Tastin received 120 million yuan investment from Source Code Capital and Foolish Venture Capital in 2021, and its setup as a red-chip company was seen as preparing for a Hong Kong IPO. Wallace, listed on the New Third Board for ten years, raised only 10 million yuan in total.

When KFC makes “Crazy Thursday” a regular event, and 9.9 yuan combo meals enter lower-tier markets; when McDonald’s “1+1” deals are always available, and 12.9 yuan can fill you up; when Tastin uses “freshly baked hand-rolled” to attract young consumers and capital— the once-exclusive low-price battlefield of Wallace is now crowded with competitors.

More brutally, when everyone’s prices are similar, consumers will vote with their feet for better experiences and more reliable quality control. The “Jet Warrior” label is becoming Wallace’s heaviest burden.

This is Wallace’s deadlock: internally, the “own people” model is constantly undermining its reputation under razor-thin margins; externally, former “apprentices” are executing a differentiated counterattack, while KFC and McDonald’s leverage brand strength to encroach downward.

The low-price empire built on 20,000 stores is being squeezed from inside and outside, gradually eroding its foundation. The question is: when “cheap” is no longer a moat, what does Wallace have left?