China’s food businesses seek the recipe to satisfy home diners

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HONG KONG — Six months ago David Chang thought he was on to a surefire moneymaking opportunity: China’s booming trade in pre-prepared food. Now, he’s lost his appetite for the business.

Chang quit his job and signed up as a franchisee for A-Bite, a company selling frozen dishes such as sweet and sour pork tenderloin, and Kung Pao chicken. He says A-Bite — founded by Charles Lu, the former chairman of fraud-hit Luckin Coffee, which was once a rival to Starbucks — told him that for a one-off franchise fee of 30,000 yuan ($4,300), plus an annual management fee of 20,000 yuan, he could get a gross margin of 50% by selling meal kits to consumers who would be bombarded with advertisements paid for by A-Bite.

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