Meiyijia Trapped in "Fake Cigarette Gate": The "Connected but Not Locked" Dilemma Behind 40,000 Stores' Frantic Expansion

21st Century Business Herald Reporter Tang Weike

The fake cigarette sales incident at Meiyijia stores across multiple regions exposed during the March 15 evening gala is revealing management issues behind the rapid expansion of domestic convenience stores.

According to Guangdong 315 reports, all 10 Meiyijia stores secretly visited in Guangzhou, Foshan, and Dongguan found problematic cigarettes. A total of no less than 854 packs of questionable cigarettes were seized. Some stores engaged in mixed sales of genuine and fake cigarettes, cross-region stock transfers, and secretly sourcing from non-exclusive channels, which have become unwritten rules. As of 3 p.m. on March 15, the Guangdong Tobacco Monopoly Bureau had inspected 6,325 Meiyijia stores, handled 306 cases, and confiscated nearly 1.4 million illegal cigarettes.

This “king of convenience stores” with over 40,000 outlets, which achieved scale leadership through low-threshold franchise models, has shown systemic failures in highly regulated categories. The incident not only questions the governance ability of a single brand but also highlights the fundamental differences, cost structures, and control boundaries between direct-operated and franchised models, sounding an alarm for the entire chain convenience store industry.

Unlike 7-Eleven and FamilyMart, which adopt strict control models with headquarters deeply involved in store operations—from product displays to food waste management—Meiyijia operates more like a “supply chain wholesaler + brand landlord,” relying on distribution margins and logistics fees for profit, with minimal intervention in daily store management.

This incident originated from on-site undercover investigations during Guangdong’s March 15 gala in 2026.

Investigations show that all involved stores are franchisees; no direct-operated stores appeared on the problem list. Store owners generally admitted that tobacco was self-sourced through local tobacco monopoly channels. To reduce costs and increase profits, some chose to purchase from external wholesale suppliers, transfer stock between stores, or even buy counterfeit cigarettes directly.

Third-party testing revealed that many of the cigarettes involved had abnormal smoke gas indicators, with higher addictiveness and carcinogenic risks, severely infringing on consumer health rights.

Following the exposure, Meiyijia’s headquarters issued an apology statement on March 15, admitting management lapses, shutting down 10 involved stores, and launching a nationwide sweep of over 40,000 stores. Dongguan’s market regulators, police, and tobacco authorities jointly interviewed Meiyijia’s headquarters, demanding the full withdrawal of illegal cigarettes, implementation of corporate responsibility, and establishment of long-term control mechanisms.

It is noteworthy that Meiyijia’s official supply chain provides unified distribution for all categories except tobacco. This system design directly leaves gaps for franchise stores to secretly source goods, which was a key factor in this incident.

Meiyijia’s rapid expansion relies on a lightweight, low-threshold franchise model.

A former Meiyijia franchisee in South China shared a real cost analysis with reporters: for a community store of about 40-50 square meters, a one-time franchise fee of 25,000 yuan, a deposit of 30,000 yuan (refundable after the contract ends without breach), and a fixed monthly brand usage fee of 1,000 yuan. Renovation costs range from 40,000 to 100,000 yuan; equipment investments include cash registers, refrigerators, surveillance, totaling 30,000 to 120,000 yuan. The initial stock purchase requires 80,000 to 100,000 yuan, with total investments between 250,000 and 350,000 yuan, excluding rent and labor. Its core advantage is not taking a share of store revenue or profit, with main income from franchise fees, deposit interest, supply chain margins, and monthly management fees, making it highly attractive to small entrepreneurs.

“The model is very friendly to small entrepreneurs; couples can run it. But tobacco requires its own licensing, ordering, and management—without headquarters involvement—which is the root of subsequent problems,” the former franchisee told 21st Century Business Herald.

Within the industry, different brands have significant differences in models, costs, and control methods.

A person with experience in the South China region developing 7-Eleven stores told reporters that 7-Eleven adopts entrusted and franchised models, with startup costs between 500,000 and 1 million yuan per store. The headquarters earns about 30% gross profit share, with strong control, full process management, and tobacco sourced and traced centrally by headquarters.

Lawson operates with a close franchise plus rebranding model, with startup costs of 350,000 to 650,000 yuan per store. The headquarters profits from a 5% to 8% markup on supply chain sales, with strong control, unified procurement, and systematic monitoring of tobacco channels.

FamilyMart mainly uses entrusted franchise, with startup costs of 400,000 to 700,000 yuan. The headquarters’ income comes from gross profit sharing and supply chain profits, with strict control, a closed loop for fresh food and quality control, and unified management of tobacco—strictly prohibiting external sourcing.

The fundamental differences between these models are clear. Meiyijia pursues a lightweight, fast-expanding, low-control, low-commission route, trading scale for market coverage, more suitable for sinking markets and community coverage.

Brands like 7-Eleven choose asset-heavy, slow expansion, high control, and high profit-sharing paths, building brand barriers through standards and quality control. The core dividing line is whether the headquarters deeply involves store operations, controls procurement rights, and aligns interests with franchisees.

The Meiyijia fake cigarette incident is a typical collapse of franchise models in highly regulated categories, offering multiple key lessons for the industry.

Expansion speed must match control capacity; lightweight franchising does not mean shirking responsibility. Once store numbers exceed ten thousand, supervision deployment, inspection frequency, and compliance training systems must expand and upgrade simultaneously. Focusing solely on store count as a performance metric will inevitably lead to comprehensive quality and compliance failures.

Some franchisees previously told reporters that during operations, headquarters’ supervision in certain regions was infrequent, mainly checking displays and hygiene, with little involvement in tobacco categories. Franchisees naturally pursue maximum profits; the profit margins on fake cigarettes and stock transfers are larger, and once external sourcing channels are open, risks increase.

In other brand systems, strict screening and long-term training of franchisees are implemented, with full-system monitoring of high-risk items like fresh food and tobacco. Abnormal orders and large, frequent shipments trigger automatic alerts, and violations result in contract termination and confiscation of deposits, deterring franchisees from crossing red lines.

High-risk categories must implement strict control exceptions. Tobacco, alcohol, infant foods, and other highly regulated categories should be separated from regular franchise systems, with 100% centralized procurement and distribution, supported by smart cigarette cabinets, traceability codes, and real-time data monitoring. Violations should lead to immediate contract termination, deposit confiscation, and blacklisting.

An industry analyst in East China told reporters that the industry needs to reconstruct the shared interests between headquarters and franchisees, reduce reliance on one-time franchise fees, increase compliance rebates and performance rewards, and raise the proportion of centralized procurement, thereby reducing external circulation risks. Digital tools should replace manual inspections, enabling automatic early warning of abnormal orders and high-volume illegal cigarette purchases.

In the long term, a hybrid model may be the optimal solution: core cities and prime commercial districts establish standards through direct operations; sinking markets rapidly expand via strong control franchises; high-risk categories and sensitive areas are managed directly by the company. This approach maintains expansion efficiency while firmly safeguarding brand integrity.

Convenience stores are the most closely related retail format to people’s livelihoods. Scale and trust should complement each other. Recently, whether traditional convenience store brands or other brick-and-mortar supermarkets, all are treating community stores as the “last mile” of competition. The Meiyijia “fake cigarette scandal” proves that franchising can be lightweight, but control cannot be lax; expansion can be rapid, but bottom-line standards must not be compromised. The lesson from 40,000 stores is a turning point from “scale first” to “quality first.”