Chapter 79

Chapter 26-27: Secretly Accusing McDonald's

Lin Feng coughed lightly, drawing the attention of all the journalists to himself.

"Ladies and gentlemen of the press, my Lin's Catering and Entertainment Co., Ltd. — the Qidian Fast Food Chain — will start providing invoices automatically to all customers dining in from tomorrow, and these will be scratch-off lottery invoices." Lin Feng finished with a mysterious smile.

The journalists were taken aback, their minds racing.

"Mr. Lin, what do you mean by this? Are you implying that fast food chains like McDonald's and KFC do not issue invoices, thus engaging in tax evasion?" The journalists swarmed forward, vying for the microphone to ask.

Lin Feng smiled but did not answer.

"Mr. Lin, you should know that the catering industry is subject to a fixed tax rate of 5.45%. McDonald's and KFC would never engage in tax evasion." Zong Qinghou secretly kicked Lin Feng.

"Mr. Zong, rest assured, I know this." Lin Feng secretly patted Zong Qinghou's leg and said, "You know, I know, and almost all entrepreneurs know this. But the general public and journalists do not." Lin Feng secretly pointed to the journalists below, who looked surprised and eager for a big story.

Zong Qinghou remained silent, pondering Lin Feng's intentions.

"Mr. Zong, you also know that for the vast majority of people, your Very Cola tastes no different from Pepsi or Coca-Cola. But why can their colas sell so well while yours cannot? The reason is simple: brand effect. The Chinese people have already been conditioned to recognize Pepsi and Coca-Cola, and they automatically assume that your Very Cola is a knockoff, and thus inferior in taste." Lin Feng's words, though harsh, were true, and Zong Qinghou knew it.

If Very Cola were sold in Pepsi or Coca-Cola bottles, its sales performance would be the same, but when sold in its own bottles, it wouldn't move.

"Therefore, Mr. Zong, even though I know that McDonald's and KFC are excellent taxpayers, I will still say things that mislead the public, all for one purpose: to build brand awareness." Lin Feng smiled slightly and continued, "For entertainment stars to become famous quickly, the fastest shortcut is to create a scandal. For our strategic alliance to become a household name in the shortest time, the quickest way is to engage in a verbal spat with a well-known company."

Zong Qinghou, upon hearing this, felt a sense of joy and secretly thought Lin Feng was despicable, but he liked this method. After all, all businessmen are cunning, and this was just a business tactic.

"But, won't you be afraid that the two fast food giants will come after you? If they sue you, your assets won't be enough to cover the costs." Zong Qinghou expressed his concern.

"Ha, Mr. Zong, did I ever say McDonald's and KFC engage in tax evasion? I only said that my fast food chain will provide invoices automatically. What can they sue me for? For selling burgers cheaper than them?" Lin Feng laughed, "All of this is the speculation of the journalists below who don't understand tax laws. Perhaps they do understand, but they pretend not to for the sake of a good story."

"As for the trouble, I'm not afraid at all. When I decided to open the first fast food chain in the country with independent intellectual property, I realized I would have to compete with McDonald's and KFC. My ambition is not great; I just want to stand on equal footing with them in the domestic market!" Lin Feng clenched his fist and said.

Zong Qinghou trembled, deeply moved by Lin Feng's "small" ambition, which resonated with him, a man who had made his fortune with Wahaha children's nutritional drinks. Looking at this young man, who was about the same age as his son, Zong Qinghou felt a sense of decline for the first time!

Lin Feng's determination, decisiveness, methods, and courage far exceeded those of the young people he had met, and were even on par with the well-known entrepreneurs who had already achieved a certain status in the industry.

This young man will surely achieve great things in the future. — Zong Qinghou marveled to himself.

At this moment, the sharpness that had been dulled by his success and the unique environment of his middle age re-emerged in Zong Qinghou's heart. — I must make Wahaha the largest beverage company in the domestic market, and I will not be the last in the carbonated drink market!

The next day, newspapers and major news outlets across the country reported that Lin Feng's Qidian Fast Food Chain and Wahaha had formed a strategic alliance, and that Qidian Fast Food Chain would no longer sell any beverages from Pepsi or Coca-Cola, with all beverages provided by the Wahaha Group.

But this was not the main focus; the real bombshell was what Lin Feng said afterward.

"Qidian Fast Food Chain CEO暗示洋快餐偷税？" (Qidian Fast Food Chain CEO hints at foreign fast food chains evading taxes?)

"麦当劳、肯德鸡偷税漏税？" (McDonald's and KFC evading taxes?)

"去麦当劳、肯德鸡吃饭一定要索取发票！" (Always ask for an invoice when dining at McDonald's or KFC!)

...

Major newspapers across the country focused on Lin Feng's statement, and for a time, ordinary people across the country, unaware of the truth, cursed McDonald's and KFC for their cunning, demanding invoices when dining and calling for the tax authorities to investigate McDonald's and KFC.

At this point, Lin Feng fanned the flames, secretly posting online: "Everyone, please ask for an invoice."

"If everyone asks for an invoice at KFC and McDonald's, China will have millions fewer children out of school!"

"If everyone asks for an invoice at KFC and McDonald's, China will have a few more aircraft carriers!"

"If everyone asks for an invoice at KFC and McDonald's, it will contribute 2% to China's comprehensive national strength!"

Lin Feng, who owned 5% of Tencent's shares and had a close relationship with Ma Huateng, had Ma Huateng's help to ensure that all QQ users would see a link to this post when they opened QQ. In just three days, the post received over 100 million clicks, inadvertently setting a Guinness World Record for the most clicks in the shortest time, driven by the "blind" patriotism of netizens.

Under the emotional appeal of the post, more and more unaware netizens joined the movement to ask for invoices. For a time, McDonald's and KFC became the targets of public criticism, while Lin Feng's Qidian Fast Food Chain quickly became a well-known brand.

"Ask for an invoice, build schools, construct aircraft carriers, and fight the Japanese!" — This became the slogan that netizens passed around.

Given the severity of the situation, the CEOs of McDonald's and KFC in China reported the "tax scandal" to their respective CEOs in the United States, who were on vacation. McDonald's Chairman and CEO Jim Cantalupo merely glanced at the report, smiled, and replied with four words: "Let it be."

Jim Cantalupo, who had led McDonald's to become the world's top fast food chain in the 20th century, had weathered countless storms. He easily saw through Lin Feng's small trick. If McDonald's responded, it would only make things worse and help Lin Feng build the brand awareness of Qidian Fast Food Chain.

Moreover, even if McDonald's ignored the matter, the Chinese tax authorities would step in to clarify the situation due to public outrage. Since this was the case, why should McDonald's bother?

KFC's CEO David Novak took a similar stance, but his response was even simpler: "Muzzle," instructing the KFC CEO in China not to respond.

After giving their instructions, the CEOs of both companies went back to their vacations, considering this a minor issue. In the growth of McDonald's and KFC, they had encountered all sorts of troubles, which was nothing new.

Leaving aside how McDonald's and KFC handled the "tax scandal," the revenue of Lin Feng's Qidian Fast Food Chain over the past three days was three times what it used to be, while the revenue of KFC and McDonald's was less than half of their usual.

Taking advantage of this momentum, Lin Feng opened a flagship Qidian Fast Food Chain store, over 100 square meters in size, in the prime location between two McDonald's and KFC stores. Since he had already declared war on McDonald's and KFC, he wanted the conflict to intensify and to show the people of Chu City his ambition to compete with foreign fast food chains.

To support the "tax scandal," Lin Feng hung a large poster in the flagship store: "Please ask for an invoice!"

This was particularly irksome to the managers of the McDonald's and KFC stores in Chu City, who felt a bitter taste in their mouths. They wondered if the owner of Qidian Fast Food Chain had eaten a bear's heart or a leopard's gall to dare challenge two Fortune 500 companies so openly.

"Hmph, I'll see how you die!" — The managers of both stores sneered and immediately launched various promotional activities. However, in the current "tax scandal" and the low-price strategy of Qidian Fast Food Chain, these efforts had little effect. Meanwhile, the new flagship store, despite competing directly with McDonald's and KFC, attracted more customers than both combined.

However, Lin Feng was not overly pleased with the current success. It was all due to the advertising effect. Once the "tax scandal" was clarified, his business would gradually decline, and the flagship store would not perform as well as the McDonald's and KFC across the street. After all, for a fast food chain, price is a factor, but taste ultimately determines everything. The taste of KFC and McDonald's burgers was indeed much better than that of Qidian Fast Food Chain.

To address this, Lin Feng focused on improving the quality of the ingredients.

A bun costs about 0.3 yuan; lettuce, at wholesale prices, costs about 0.5 yuan per burger; salad sauce, using a high-quality bottle, costs about 0.1 yuan per burger; chicken, after frying, costs no more than 2 yuan per burger. In total, the cost of a burger is around 3 yuan.

McDonald's and KFC sell a burger for 16.8 yuan, and with the costs of rent, labor, and packaging, the profit per burger is at least 10 yuan.

Lin Feng's burgers, sold in sets of three for 15 yuan, average 5 yuan each. Most customers buy three burgers, as a single burger costs 6 yuan, and the 1 yuan difference is a significant incentive for customers who come for the low prices.

Lin Feng calculated that if the ingredients were used in full and the chefs were skilled, the cost of a burger would be between 4.9 and 5 yuan. If each customer bought three burgers, the profit would be almost zero. However, Lin Feng was not worried. First, if the taste was poor, it would ultimately affect the business. Second, besides the high profit from burgers, fast food chains also make high profits from beverages. A small cup of cola, with ice, costs no more than 0.7 yuan, a medium cup costs 1 yuan, and a large cup costs 1.5 yuan. Customers at fast food chains always order a drink.

Lin Feng's profit came from the beverages, using low-priced, tasty burgers and fried chicken to attract customers and making money from the drinks.

Since Lin Feng ordered the use of full ingredients in burgers and fried chicken, the business became even more successful. Although the taste and quality were still slightly inferior to KFC and McDonald's, the price made Qidian Fast Food Chain's burgers a good value for money.

The concern many customers had about Very Cola being inferior to Pepsi and Coca-Cola was dispelled when they tasted it with a patriotic mindset and found no difference, which further boosted the business of Qidian Fast Food Chain and increased the sales of Wahaha Group's beverages.

However, due to the limited variety of Wahaha Group's beverages, which included only cola among carbonated drinks, many customers felt a bit disappointed, which motivated Zong Qinghou to expand into various beverage markets.

Although Lin Feng's Qidian Fast Food Chain was booming, the profit was not as high as the first three days of opening. Each store's daily net profit was between 1,000 and 3,000 yuan, and the flagship store, despite attracting many customers from McDonald's and KFC and achieving a record-breaking revenue of 100,000 yuan, had a net profit of less than 10,000 yuan due to the high rent.

In contrast, the Chu City branches of McDonald's and KFC, despite the "tax scandal" and Lin Feng's low-price strategy, still had daily net profits of over 10,000 yuan, a significant difference.

As the "tax scandal" escalated, although newspapers disclosed the tax models of McDonald's and KFC, many ordinary consumers still subconsciously believed that not asking for an invoice meant not paying taxes. They continued to call for authorities to investigate McDonald's and KFC for not issuing invoices.

Finally, under the instruction of a leader, CCTV's "Focus Talk" program addressed the tax issues of McDonald's and KFC. In the program, tax officials explained the tax models of McDonald's and KFC in detail, emphasizing that they were excellent taxpayers and did not engage in tax evasion.

The instigator of this "tax scandal" — Lin Feng — was then heavily criticized by the media, accused of using any means to achieve his advertising goals. The "tax scandal" once again sparked controversy, and many foreign food companies, such as Dicos and Pizza Hut, called for McDonald's and KFC to sue Lin Feng for defamation and slander.

However, McDonald's and KFC knew the situation well. If they could sue, they would have