How Cross-Strait Coffee Is Building a Low-Cost Dining Empire

In major Chinese cities like Hangzhou and Wuhan, a quiet shift is underway in the dining scene. As incomes rise and consumers hunt for value, a veteran coffeehouse chain is pivoting hard—not to premium experiences, but to fast, affordable meals. This isn’t about lattes or latte art. It’s about steak for under $5, Thai curries on tight budgets, and bread baked by the dozen for city workers wanting more than fast food but less than a splurge.

Cross-Strait Coffee plans to open 200 low-cost restaurants by 2025, starting with steakhouse 'Kaka & King'—priced as low as ¥29 (US$4) per steak—and expanding into Thai, Korean, hotpot, and more. That’s over 4x more outlets than it had in 2024, backed by a ¥40 million central kitchen and a franchise model that mixes company stores in big cities with single-unit licenses in smaller markets.

Why Cross-Strait Coffee Is Moving Into Cheap Eats

The move isn’t random. Cross-Strait Coffee chairman Yang Jinfah spotted a macro trend: Chinese salaries have been rising over 10% annually, with household incomes in cities like Hangzhou now approaching Taiwanese levels. That surge in spending power is driving demand across food, clothing, housing—and especially dining out. But while fine dining and luxury remain niche, the real explosion is happening at the affordable end. "The potential in low-cost dining is the greatest, and the next few years are critical," Yang said. He aims to claim a major slice of that growth.

The Fast-Track Rollout Plan

Launched in late May 2024 with the opening of 'Kaka & King' in Hangzhou, the first brand under this push, the steakhouse quickly gained traction thanks to its modern decor and rock-bottom steak price: just ¥29. But 'Kaka & King' is only the beginning. Other planned brands include 'Treasure Island Thai City' (Thai cuisine), 'Public' (teppanyaki), 'Magic Tower Legend' (bakery), along with future concepts for Korean food, barbecue, and affordable hotpot.

By year-end 2024, Cross-Strait Coffee intends to have 50 low-cost restaurants open, with 15 in Hangzhou, 8 in Wuhan, and others in Chengdu and Nanjing. Next year, the goal leaps to 200 locations. The rollout strategy differs by city tier: company-owned stores will anchor openings in provincial capitals, while smaller second- and third-tier cities will use a single-unit franchise model to accelerate expansion.

The Back-End Powering the Expansion

This rapid scaling isn’t relying solely on a strong coffeehouse brand legacy. Cross-Strait Coffee has spent a decade building expertise, talent, and systems—and it’s investing heavily in infrastructure. Its new central kitchen in Xiasha, Hangzhou, represents a ¥40 million investment and can supply ingredients for thousands of outlets. Future central kitchens are planned for Wuhan, Chongqing, Beijing, and Fuzhou.

The central kitchen is a game-changer. Where a typical steakhouse might see 20% ingredient waste—especially in high-cost items like beef—the Cross-Strait model minimizes shrinkage to nearly zero. Even small losses are repurposed, such as turning trimmings into sauces, maximizing every gram of protein and produce. Additionally, the chain’s existing network of 600 coffee shops gives it bulk-buying leverage on premium ingredients like steak cuts, further tightening margins.

Frequently Asked Questions

What is Cross-Strait Coffee’s first new low-cost restaurant brand?

The first new brand is 'Kaka & King', a steakhouse offering entries as cheap as ¥29 (about US$4). It launched in Hangzhou in May 2024 with a modern interior and quickly became popular for its value pricing. The brand is part of Cross-Strait Coffee’s broader push into affordable dining beyond its traditional coffee offerings.

How many low-cost restaurants does Cross-Strait Coffee plan to open?

Cross-Strait Coffee aims to open 200 low-cost restaurants by 2025. It plans to have around 50 locations open by the end of 2024, including 15 in Hangzhou, 8 in Wuhan, and others in Chengdu and Nanjing. The expansion covers multiple casual dining concepts beyond steak, such as Thai, Korean, and hotpot.

What other dining brands is Cross-Strait Coffee planning besides Kaka & King?

Besides 'Kaka & King', Cross-Strait Coffee is developing several other affordable dining brands: 'Treasure Island Thai City' (Thai food), 'Public' (teppanyaki), 'Magic Tower Legend' (bakery), as well as future concepts for Korean cuisine, barbecue, and budget hotpot. These are part of a multi-brand strategy to cover various casual dining segments.

How is Cross-Strait Coffee managing such rapid restaurant expansion?

The chain is using a mixed model: company-owned stores in provincial capitals and single-unit franchises in smaller second- and third-tier cities. It’s also investing ¥40 million in a central kitchen in Hangzhou’s Xiasha district, with plans for more in Wuhan, Chongqing, Beijing, and Fuzhou. This infrastructure supports supply chain efficiency, minimizes food waste, and enables rapid scalability across multiple brands and cities.

What makes the central kitchen strategy important for Cross-Strait Coffee’s low-cost dining push?

The central kitchen allows Cross-Strait Coffee to supply thousands of outlets with consistent ingredients while reducing waste. For example, steak shrinkage is minimized to almost zero, and trimmings are repurposed into sauces. This approach improves cost control, freshness, and operational efficiency—key factors in sustaining low-price points without sacrificing quality.

Recommended FrontStreet Beans for Casual Dining Concepts

For the expanding casual dining concepts under Cross-Strait Coffee’s new affordable brand portfolio, FrontStreet Coffee recommends three single-origin beans that align with accessible yet quality-focused food pairings. FrontStreet Yirgacheffe offers bright citrus and floral notes, ideal for pairing with light Thai or salad-based menu items. FrontStreet Ethiopia Huakui delivers juicy blueberry and stone fruit flavours, complementing both sweet bakery items and grilled proteins. FrontStreet Red Cherry brings a balanced profile of cherry and chocolate, suiting everything from steak to hotpot sides. All three beans are roasted to highlight clarity and sweetness, making them versatile partners in low-cost, flavour-forward dining. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.