The transition from chasing a 100-billion-dollar market value dream to trending on social media for bankruptcy rumors took just one year for the well-known Chinese restaurant chain.
On the evening of September 19, the hashtag "Xibei exposed to completely shut down" surged to the top of Weibo's trending list. The whistleblower was a Weibo blogger who claimed to have received information three weeks prior: Xibei would collapse entirely within two to three months. According to the post, founder Jia Guolong would personally shoulder the vast majority of the debt and relinquish his equity stake, leaving only roughly one hundred profitable stores to be run by employees as self-operated ventures, in an effort to sustain the livelihoods of 3,000 to 4,000 people. The blogger added at the end: "This is an irreversible fact."
During the lunch rush on September 20, a visit to the Xibei outlet on the seventh floor of Beijing's Chaoyang Joy City shopping mall revealed only three to four tables of customers dining at the corner-located store. This stood in stark contrast to nearby brands like Feidachu and Sushiro, where queues routinely exceeded an hour during the same period. Foot traffic at the Xibei location was even lower than that of a neighboring, lesser-known noodle brand. Xibei's official response to the bankruptcy rumors was textbook: all stores nationwide are operating normally, and they pleaded with the public to view online information rationally.
However, when recent facts from the past six months are pieced together, it becomes clear why so many people are inclined to believe the rumor. Over the past year, Xibei's operating store count has been halved from nearly 400 to 226. Between September 2025 and March 2026, cumulative losses exceeded 600 million yuan. Its valuation has plummeted from a peak of 20 billion yuan to just over 1 billion yuan during a new funding round in March of this year. Severance pay, year-end bonuses, and share redemption payments for departed employees have been unilaterally deferred until 2028, with some former workers already initiating labor arbitration. Adding to the intrigue, a business registration record surfaced nearly in tandem with the trending topic: on September 2, Jia Guolong's wife, Zhang Liping, pledged her directly held 5.1959% equity stake in Xibei—corresponding to a 5.4 million yuan capital contribution—in its entirety to a branch of the Industrial and Commercial Bank of China. Notably, she pledged every bit of her direct holdings.
All signs point to Xibei teetering on the edge of a cliff. Whether the company can survive, and for how long, or whether a miracle might occur, perhaps even Jia Guolong himself does not know the answer. But had it not been for this turmoil, the man who announced his return to the helm two years ago with bold reform plans might right now be basking in the glow of a "100-billion market value" dream.
Where It All Began: A Recently Returned Jia Guolong
At 4:55 PM on September 10, 2025, Luo Yonghao posted that Weibo message. To understand why Jia Guolong would harden his stance so defiantly in the aftermath, one must rewind three months. In May of that year, Jia had just completed an exclusive interview. At that time, he had recently reassumed the role of Xibei CEO in October 2024, marking a return to core dining after a decade of fast-food ventures and three years of retail expansion. In the interview, he calculated his own efforts over the years: retail consumed 60% of his energy, fast food 30%, and core dining at most 10%. A billion yuan had been invested, which he described as "100 million yuan per year in R&D expenses." He had shuttered the fast-food line and scaled back retail, declaring a full focus on the main dining business. He also announced a bold move: gifting 70% of his and his wife's dividend rights to the team. His state of mind, in his own words, was "returning from founder mode to founder mode."
What does founder mode mean? It means going directly to the front lines, making decisions on the fly—"when I feel it, I decide immediately," "I follow my instincts." When asked whether he listens to his team on major decisions, he replied candidly: "I am the founder and largest shareholder. My decision-making power and returns are the greatest, and so are the risks and losses. Therefore, I have the primary say." He even added: "Democratic decision-making based on majority rule cannot produce good decisions; it only produces mediocre ones." When asked if this approach might change, he said: "This is fate."
Understanding this mindset, his reaction after September 10 becomes unsurprising. Luo Yonghao's Weibo post hit trending within 15 minutes. The following evening, Jia Guolong personally addressed the matter for over an hour, delivering a core message: Xibei uses zero pre-made dishes, and he threatened to sue Luo Yonghao. Luo responded succinctly: "Fine, bring it on." He then countered by offering a 100,000 yuan reward for evidence. Five days later, Xibei apologized. Yet the real takeaway is not the spat itself, but another remark Jia made during the debate: "I can give up business, but I must clarify right from wrong." This statement encapsulates the man entirely. A founder who, just three months prior, had told an interviewer that he loves to stir things up, that democratic decisions lead to mediocrity, and that it's fate, would never respond to external criticism with a low-key approach or a concession that there is room for improvement. That would contradict the decision-making instincts he has honed over 37 years.
Interestingly, in that same interview three months earlier, Jia had just admitted that 2024 was Xibei's most difficult year, confessing that "I made too many fake moves for myself; any move not centered on customer value and customer experience is a fake move." He had paused to reflect, vowing to redirect his focus back to core dining and customers. But when Luo Yonghao's post landed, he instinctively chose the most confrontational path. A Jia Guolong still in the adjustment phase, still relearning how to be a restaurant operator, responded to his most unfamiliar crisis in his most familiar way. The price of this hardline stance was a forced apology five days later. But the greater cost was that the statement "Xibei uses zero pre-made dishes" became permanently etched into public discourse. Every time someone revisits Xibei's past missteps, that phrase is dragged out.
Why Just 226 Stores Remain From a Peak of Nearly 400
When the storm first broke, outsiders had confidence in Xibei's resilience. After all, this was a brand that had claimed the title of "No. 1 in Chinese sit-down dining" for 11 consecutive years, served tens of millions of customers annually, and boasted a goal of exceeding a 100-billion market value by 2026. But the numbers soon told a different story. Jia Guolong later revealed to the media that between September 2025 and March 2026, Xibei accumulated losses exceeding 600 million yuan. This is a company that survived the darkest days of the pandemic in 2020.
What followed was store closures. On January 15, 2026, Jia Guolong posted a 700-character message on his WeChat Moments, confirming the closure of 102 stores nationwide in one fell swoop—30% of the then-total store count—affecting approximately 4,000 employees. He wrote: "More than 17,000 Xibei employees have done their best." The tone was less that of a business tycoon and more of an apologetic elder.
After closures came salary adjustments. Starting in February, Xibei implemented a deferred payment scheme: employees earning above 20,000 yuan per month received 50%, those earning between 10,000 and 20,000 received 80%, and those earning less than 10,000 received their full salary. Year-end bonuses for 2025 were postponed from Chinese New Year in 2026 to July. Eventually, even this plan proved insufficient. At the end of July, Xibei unilaterally revised its settlement agreements for departing employees, stretching severance, year-end bonuses, and share buyback payments all the way to 2028. Multiple former employees have since filed for labor arbitration.
The capital market's reaction is even more telling than the stores. Jia Guolong publicly announced Xibei's plan for a Hong Kong IPO by 2026 in September 2022, and by the 2023 annual meeting, he was already referencing a 100-billion market value. At that time, Xibei's expected valuation hovered around 20 billion yuan. By March 2026, however, Lin Lairong, the actual controller of Dazhong Mining, acquired a 2.16% stake in Xibei for 2.2476 million yuan. Working backwards from that ratio, Xibei's valuation at the time was approximately 1.04 billion yuan. In one year, the number had shrunk by 95%. Two other familiar faces appeared in this period: Zhang Yong, founder of Xin Rong Ji, holding 4.42%, and Hu Xiaoming, former CEO of Ant Group, holding 2.21%. They have been dubbed "white knights" from the outside. As of September 19, data from a restaurant industry tracker showed Xibei had 226 operating stores. A year earlier, that number was close to 400. In other words, it's not that the chain collapsed entirely—it has been cut in half. That's precisely why the blogger's revelation found such ready belief. The dire picture it painted aligns directionally with the declining curve visible in public data.
The Structural Squeeze on Mid-Tier Dining
What truly has Xibei on the precipice is a structural shift sweeping through China's entire restaurant industry. And Xibei happens to occupy the most awkward position in this transformation. Looking at the broader market, industry monitoring data shows that in the first half of 2026, the national restaurant sector saw 2.0552 million closures against only 1.65 million new openings—a net decrease of 410,000 outlets. This marks the first negative growth in total restaurant numbers since the pandemic ended. Drilling down, the hardest-hit segment is not budget fast food at 9.9 yuan per meal, nor is it high-end black pearl establishments at thousands of yuan per person. It's the squeezed middle: mid-tier sit-down dining with per-person spending between 80 and 300 yuan. Industry data indicates the closure rate in this band exceeds 60%.
The reason is straightforward: consumers have become smarter. A telling detail emerged during the crisis when Xibei launched aggressive discounts. Foot traffic temporarily rebounded in late September 2025, and October even saw higher numbers than the same period in previous years. But as soon as the discounts stopped, traffic reverted to baseline. This suggests consumers don't "hate" Xibei; rather, they're recalculating a simple equation: at over 100 yuan per person, is it really worth it? This is what Luo Yonghao's post truly exposed. It wasn't asking "do you use pre-made dishes?" It was asking: "You rely on factory-based supply chains, standardized mall store formats, and a nearly unchanged menu, yet you charge double what a freshly cooked home-style meal costs. Does this premium still hold?"
In the past, that premium held because Xibei represented safety, a no-fail choice for dining with kids, and face for hosting guests. But when the entire consumption environment is redefining what constitutes value, such a vague brand halo becomes the first casualty. Xibei itself recognizes this. Over the past year, it launched two new sub-brands: Tianbian Casserole Braised Noodles in March, priced at 40 to 50 yuan per person and emphasizing freshly kneaded and braised noodles, and Tianbian Goat in August, featuring whole fresh goats carved on-site in a counter-style format. Sound familiar? The journey from a representative of northwestern cuisine at over 100 yuan per person down to braised noodle shops and fresh-cut lamb stalls at 40 yuan is, in itself, an implicit rejection of the past decade's model. Moreover, neither new brand is thriving. By mid-September, some Tianbian Casserole Braised Noodles locations had paused operations or pivoted to other formats, and Tianbian Goat's pricing of 150 to 180 yuan per jin for lamb has drawn mixed reviews.
Xibei is not alone. High-end brands like Xin Rong Ji are growing, and giants with supply chain advantages such as Mixue and Haidilao are expanding. The losers are the middle tier: brands with recognition but lacking cost advantages, differentiation, and relying on premium pricing to survive. Put bluntly, this is the "Xibei-ization dilemma."
So will Xibei actually "completely collapse within two or three months"? Most likely not. It still has over 200 stores generating revenue, Jia Guolong personally pushing forward under debt, and capital partners like Xin Rong Ji and Hu Xiaoming entering at low valuations to provide a safety net. A 37-year-old company will not vanish because of one trending post. But the Xibei that claimed to be the No. 1 in Chinese sit-down dining for 11 years and aspired to be a 100-billion market value public company is indeed gone for good. The tuition Xibei paid this year—600 million yuan in losses, over 100 closed stores, and a valuation collapse from 20 billion to just over 1 billion—ultimately boils down to a more fundamental lesson: in an age when everyone is recalibrating what things are worth, any premium sustained by information asymmetry, brand aura, or the assumption that "everyone thinks you're worth it" is just paper-thin. The headlines about Xibei may linger for a while, but what restaurant owners should really study is the industry curve that moved half a beat too slow. It remains to be seen who will take the same spot next.