A former HAIDILAO employee has revealed that staff were forced to personally pay for gifts given to customers as compensation for complaints. The company has acknowledged the practice and initiated refunds to affected employees following internal complaints.
HAIDILAO officially responded yesterday, confirming the basic facts of the internal complaint. The company stated it has discussed compensation with the individuals involved and notified over a thousand stores to conduct internal reviews, with related investigations still ongoing.
Regarding communication progress, the former employee, Ms. Jiang, confirmed that HAIDILAO's headquarters has contacted her. "The money forcibly spent on gifts will be refunded, though the specific amount hasn't been calculated yet," she said. She also indicated that the responsible manager of the involved store would face disciplinary action.
The incident has impacted all HAIDILAO locations. Employees from multiple regions expressed gratitude to "Ms. Jiang for speaking out." An employee from Hubei disclosed that internal refunds have begun. "During yesterday's meeting, every employee who had paid fines received their money back. The frustration and wasted money have finally been acknowledged," the employee shared.
Ms. Jiang, who worked for HAIDILAO for six years, explained that her store enforced a rule requiring staff to buy gifts personally following any customer complaint. These gifts were kept in the store and ultimately given to customers. Purchase records provided by Ms. Jiang showed she bought items including towel gift sets, plush toys, tissue paper, photo frames, and gift boxes, totaling nearly 2,000 yuan. She had previously reported the issue internally without resolution, only receiving attention from senior management after going public.
Ms. Jiang stated, "This is both about protecting my legal rights and genuinely hoping the company will standardize management to create a fairer and more comfortable working environment for all employees. Only when employees are happy can they provide better service and customer experiences—this reflects my long-term affection for the company."
Most consumers expressed sympathy and support for the employees. One commented, "I don't want your gifts; I want you to be happy and work without stress because I'm also an employee." Another remarked, "HAIDILAO's exploitation of staff is severe. So those small gifts actually come out of employees' pockets. I won't dine there again."
When asked about the origin of this practice, Ms. Jiang couldn't specify a timeline but noted, "HAIDILAO was much better when I joined; it has become increasingly arrogant recently." Multiple HAIDILAO employees have previously reported unfair treatment. Current staff mentioned being overworked, often handling tasks for three people, and frequently unable to leave on time. Ms. Jiang confirmed severe overtime issues, with early shifts sometimes extended from 9:00 PM to 11:00 PM despite low customer traffic.
A 28-year-old former employee, Wang, previously criticized the company's strict policies online, including penalties for taking a 16-minute bathroom break, allowing customers to self-serve water, failing to smile, or not running three steps to greet guests. Punishments reportedly included deep squats for lateness and copying rules for yawning. Wang's posts were later removed.
From a legal perspective, a lawyer from Henan Haibo Law Firm stated that China's Labor Law prohibits employers from arbitrarily deducting wages. Fines constitute administrative penalties, and companies lack the authority to impose them. Forcing employees to buy gifts infringes on their right to full compensation and represents an illegal wage deduction. Employees are advised to retain evidence such as attendance records, chat logs, and online orders, and report violations to labor authorities.
Industry commentator Zhang Shule argued that customer experience issues should follow commercial complaint procedures handled by stores. Penalizing staff should adhere to established rules. Bypassing formal processes by forcing employees to buy gifts shifts responsibility unfairly and disrespects standard business protocols. "For HAIDILAO, which prides itself on customer experience as a key differentiator, this practice evokes an image of poorly managed small outlets," Zhang noted.
Meanwhile, HAIDILAO's first annual report since founder Zhang Yong's return showed declining performance. The 2025 financial report revealed revenue of 43.225 billion yuan, up 1.1% year-on-year, but net profit fell 14% to 4.042 billion yuan. While revenue saw slight growth, profit margins faced clear pressure, with core operational metrics fluctuating.
HAIDILAO's growth slowed from double digits in 2023 to single digits in 2025, hitting a three-year low. Net profit declined for the first time in four years. The core restaurant business encountered growth bottlenecks, with revenue dropping 7.1% to 37.543 billion yuan, reducing its share of total revenue from 94.5% to 86.9%. Contributing factors included a reduction in self-operated stores from 1,355 to 1,304 and a decrease in table turnover rate from 4.1 to 3.9 times per day, falling below the internal benchmark of 4 times set after the Woodpecker Plan. Same-store sales also fell 6.8% to 32.89 billion yuan, with average daily sales per store dropping from 85,200 to 79,500 yuan.
Food industry analysts observed that HAIDILAO's main brand underperformed in 2025, with declining customer traffic and operational efficiency. The bright spots were a doubling of delivery revenue, now accounting for 6.1% of total revenue, and the "Pomegranate Plan" sub-brands generating 1.52 billion yuan, or 3.5% of revenue. However, these contributions remain limited. As of end-2025, HAIDILAO operated 1,383 stores, including 79 franchises, indicating a more conservative expansion strategy.
"The main brand shows signs of weakening, with per-store profitability under pressure. Relying solely on new openings for growth may no longer be viable," an analyst stated. The overall hot pot sector performed poorly in 2015 amid intense competition, with community-based and regional brands offering greater appeal and lower prices. The analyst added that when HAIDILAO initially franchised, the market expected it to突破 category limits, but the company now appears cautious due to rising risks, compounded by recent negative publicity.
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