Zhang Gang’s independent spirit emerged at an early age. Aged 9, he stole some money from his parents for a lollipop. After his mother gave him a beating, he decided never to ask for a penny from his parents again. So he had to start making his own money and, at technical school, Zhang and a few friends started a street stall selling flared trousers. After graduating in 1984, he joined Baotou Steel.
Zhang then returned to garment-making for his first business venture. By the mid-nineties he had saved Rmb100,000 ($15,000), which he used to establish a mobile phone business. At the time his brick-like contraptions came with a hefty price tag – Zhang remembers that he made a Rmb1,700 profit selling his first unit. He opened a successful shop, but ran into aggressive competition. It was time to move on to something else.
In 1999, Zhang launched the restaurant that would make his fortune. Little Sheep began as a single hotpot restaurant in Baotou City, Inner Mongolia. But its success led to many more, through a franchising model. At its height, a new restaurant was opening every three days. Little Sheep, as the name might suggest, is famous for its mutton dishes, as well as extracts of herbal medicine said to promote a healthy diet.
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Further expansion was helped with a Hong Kong IPO in 2008 that raised $100 million. Since then, the hotpot chain has grown to more than 300 outlets, with stores not only in China but also in Hong Kong and the US.
As one of China’s best known dining brands, Little Sheep then attracted the interest of a bigger player, and in May, Yum Brands offered to buy out the company for $586 million. Yum already has a major China presence in the form of KFC and Pizza Hut. But the addition of Little Sheep aims to help the US company to localise more of its culinary portfolio.
Zhang decided to sell up because Little Sheep’s initial growth spurt is coming to an end, reports Southern Weekly, leaving a wide network of stores but in an increasingly competitive market. The founder also believe that Yum has the resources and management skills to manage the restaurant chain as it matures. (The deal still awaits approval from the Department of Commerce.)
In his own words
“My nature is to be the boss in anything I am doing, and no-one can change this. I’d rather quit if I am the number two.”
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