Haidilao's most distinctive organisational strength has long been its delegation of authority to frontline staff. Yet, as the restaurant industry contends with mounting operational headwinds, the limits of that approach are now being redefined.

On 25 August, Haidilao disclosed its unaudited interim results for 2026. For the first half, the company posted revenue of RMB 22.337 billion, a year-on-year increase of 7.9%. Core operating profit under non-IFRS measures reached RMB 2.513 billion, up 4.4%, while profit for the period stood at RMB 1.764 billion, a modest gain of just 0.5%.

The flagship brand has yet to fully recover. Revenue from Haidilao restaurant operations slipped 4% to RMB 17.837 billion, with average daily sales per same-store falling from RMB 78,900 to RMB 77,800.

Store efficiency, however, is showing signs of stabilisation: the table turnover rate for self-operated Haidilao restaurants edged up from 3.8 times per day in the prior-year period to 3.9 times, and system-wide sales, including both self-operated and franchised outlets, grew 0.8% year on year.

Haidilao is not without fresh growth engines. Delivery revenue surged 121.2% to RMB 2.051 billion, while revenue from other restaurant brands outside the core label climbed 113.1% to RMB 1.271 billion, with both segments achieving double-digit expansion.

More telling than the financial metrics is management's unusually candid retrospective on the company's past organisational model.

The interim report acknowledges that prior growth "relied primarily on store-level management capabilities," with strong incentives for store managers, but notes that "headquarters functions remained relatively lean." As a result, 2026 has been designated as the "inaugural year for building mid-office management capabilities," with growth momentum set to transition gradually from "store-driven" to "headquarters platform-driven."

This marks a departure from Haidilao's historical expansion playbook.

Following organisational flattening around 2016, Haidilao cultivated a classic bottom-up fission mechanism: store managers were responsible not only for daily operations but also for mentoring new managers and scouting new restaurant locations. Headquarters provided directional guidance on site selection, while managers identified specific properties, with final decisions made jointly.

This emphasis on frontline flexibility persisted for years. As recently as 2025, Haidilao continued to champion local autonomy in operations.

The annual report described a "one store, one strategy" approach, with certain product decision rights delegated to regional divisions, resulting in over 100 region-specific menu items that year. Themed outlets, including fresh-cut, late-night, family-friendly, and pet-friendly concepts, also emerged during this phase.

The boundaries of that flexibility soon became evident. After a pet-friendly pilot expanded to three locations, related videos triggered hygiene controversies, prompting the company to discontinue the trial in May 2026.

Under the latest division of responsibilities outlined in the interim report, headquarters will consolidate operational insights, coordinate strategy and resources, and then "deliver unified outputs to stores." Store teams, in turn, return to their core mandate: "serving customers with one hand, supporting staff with the other."

Product management is also being centralised. Headquarters will now "plan seasonal product launch lineups in a unified manner," integrating marketing, in-store experiences, and membership operations.

The company has also migrated foundational operational tasks online to establish standardised store procedures, while exploring artificial intelligence applications for business analytics.

The "Red Pomegranate Plan," a key mechanism for incubating new Haidilao brands, best illustrates this shift.

Launched in August 2024, the initiative explores diverse business formats through internal entrepreneurship. By 2025, the company had developed a dual system: "Wok Master" focused on employee-led ventures, while "People's Restaurant" leaned toward headquarters oversight.

This year, Haidilao has begun systematically evaluating active projects, channelling resources toward those that have been validated. Concepts with immature models are being adjusted or consolidated, and new openings now require more rigorous feasibility assessments and monthly performance reviews.

The strategic tightening reflects the inevitable convergence of macroeconomic conditions and internal corporate evolution. As the marginal returns on frontline incentives diminish, headquarters must consolidate decision-making authority and manage the bigger picture.

In January 2026, founder Zhang Yong returned as CEO after nearly four years away from the role. His predecessor, Gou Yiqun, transitioned to overseeing process automation and intelligence, focusing on advancing the smart mid-office build-out.

Under headquarters coordination, business units are moving away from their previously fragmented exploration efforts. Two newly selected formats, "Da Pai Dang Hotpot" and "Sushi," will now have their expansion and operations fully managed by the central mid-office.

This mid-office empowerment logic extends to flagship brand store development as well.

The company anticipates accelerating store openings in 2027, but new locations will "leverage different store models generated by the mid-office," targeting premium malls in tier-one and tier-two cities as well as lower-tier markets. Franchising will also adopt a "more cautious approach."

Whether this new framework can serve as Haidilao's remedy ultimately hinges on same-store sales at the flagship brand, the quality of new store openings, and the profitability of its multi-brand portfolio.