Xiaomuzhi Featured in CCFA Digital Franchising Report: Technician Content and Franchisee Tiers Offer a Case Study

According to public reporting on 3 November, the China Chain Store & Franchise Association (CCFA) has included practices from automotive service chain Xiaomuzhi in its Third-Generation Digital Franchising Report (2026). The case study focuses on frontline technicians creating content, head office reviewing and distributing it, and franchisees being assigned tiers based on operating data. It offers a concrete example of digital support for those assessing China’s franchise market.

From supplying products and business models to providing digital capabilities

The report identifies three stages in the development of franchising. The first centres on supplying products, with head office providing stock and branding. The second centres on replicating a business model, emphasising standardised outlets. The third centres on providing digital capabilities.

According to the report, a key feature of third-generation digital franchising is a single-layer platform architecture that directly connects head office, outlets and consumers across the entire chain. When assessing such a system, the question is not simply whether outlets use software. It is also how head office receives information from outlets, provides support and turns frontline experience into resources that can be shared.

The technician programme brings frontline experience into a shared system

Under the theme of content and talent development, the report documents Xiaomuzhi’s ‘Craftsperson Programme’. Frontline technicians turn repair cases and technical tips into short videos or illustrated tutorials and upload them. Head office then reviews the content and helps direct audiences to it, supported by a points and recognition scheme.

The report describes the programme as turning individual experience into an organisational asset, shortening the time needed for new staff to develop their skills and helping make technical standards more consistent. Rather than head office simply issuing training materials, this is a collaborative approach in which outlet staff create content and head office organises its review and distribution.

The figures relate to different reporting points and should be kept separate. The report records average monthly production of more than 50,000 short videos. In October 2026, the company disclosed monthly averages of 100,000 short videos and 72,000 livestreams, alongside 13,000 technicians registered under their real names. These two sets of figures should not be used directly to calculate growth.

Franchisee tiers linked to different levels of support

The report also mentions Xiaomuzhi’s red, amber and green franchisee grading system. Franchisees are graded using operating data, with each tier receiving a different level of service and resource allocation.

For prospective franchisees, this points to specific questions worth asking: which indicators determine the grades, how ratings are adjusted and what support each tier receives. Understanding these practical details is more useful for assessing the day-to-day working relationship than simply checking whether head office has a digital platform.

Inclusion in a case study is not accreditation

The report’s appendix lists 24 organisations that supported its case studies. Hangzhou Xiaomuzhi Automotive Technology Service Co., Ltd. is the only automotive aftermarket business among them. However, the report is a research document. Inclusion does not constitute an assessment or certification of the company’s business performance by the association, nor does it mean that the practices described are suitable for every outlet.

Practical tip: When assessing digital franchise support, ask the brand to demonstrate its content review, training-sharing and tier-based service processes, and check the support commitments in the contract. Do not treat inclusion in a case study or content production volumes as evidence of outlet earnings.