China's No.2 tea chain closed 1,605 stores in 90 days

Shuyi Burnt Grass Jelly (书亦烧仙草) built a national tea-drink franchise around a single signature product: burnt grass jelly, a traditional southern Chinese dessert served as a cold drink. By September 2021 it had surpassed 7,000 stores, making it the second-largest new-style tea brand in China behind Mixue Bingcheng. The model was asset-light franchising: Shuyi collected fees and supplied ingredients while franchisees bore the rent and labour.

In 2023 the brand attempted a major revamp — a '爆改' — repositioning its menu, store design and pricing. The revamp did not land. In a single 90-day period through mid-2024, Shuyi opened 496 new stores but closed 1,605, a net loss of over 1,100. By 31 August 2024, active stores stood at 5,819 — more than a thousand below the 2021 peak. By October, the count had fallen further to 5,585. Franchisees were selling used equipment on secondhand platforms; some reported it could only be sold as scrap metal.

Shuyi spent ¥178 million in 2023–2024 subsidising franchisees — cutting material prices, reducing decoration costs by 20 percent, waiving franchise fees. The closures did not slow. Reports indicated that investors had exited. The brand that had been China's tea-drink number two was now shrinking faster than it could open, in a market where the sector as a whole opened 17,174 stores and closed 8,608 in the first half of 2024.