The world’s largest fast food franchise, bigger than McDonald’s, is famous for its affordable drinks at 65p… but it might not be familiar to you.

MCDONALD’S has lost its title as the world’s biggest fast food chain after a little known company soared to the top as shoppers feel the pinch.

In just three years, China’s Mixue Ice Cream and Tea more than doubled its locations, now having more than Starbucks and McDonald’s.

Mixue ended 2024 with 45,000 outlets across Asia and Australia compared to McDonald’s with over 43,000 and Starbucks’ 40,576.

Mixue has become extremely popular amidst China’s economic downturn and housing crisis, with its bubble tea and ice cream products priced at an average of just 65p.

On Monday, the company’s shares jumped by more than 40 per cent in its debut on the Hong Kong Stock Exchange.

It sold 17 million shares in the deal at a fixed price of HK$202.5 each (£20.59).

Investors were eager to invest in the company, buoyed by the resurgence of interest in the bubble tea market, as highlighted by Longdley Zephirin, a principal and analyst at The Zephirin Group.

In its first public offering of shares, Mixue raised $444 million (£352 million) which was the largest sum of the year for the exchange.

It’s shares rose by almost 30 per cent in early trading giving the company a valuation of over $10 billion (£7.9 billion).

Despite the challenging economic environment, Mixue shows no signs of stopping its growth trajectory, with outlets established not only in China but also in 11 other countries such as Thailand and Singapore, as mentioned in the company’s IPO filing.

The Zhengzhou-based company has hopes of becoming more global, the filing stated, with 90 per cent of stores in China.

China’s largest bubble tea, iced drinks, and ice cream chain operates through franchisees rather than directly having a hand in the running of its thousands of stores.

Most of its income is made by selling supplies like milk, coffee and syrups to its franchisees, charging them below average costs.

Mixue also supplies franchisees with equipment.

These efforts mean that the company has a reduced cost of procurement at around 20 per cent less than industry standards meaning it can offer its products to customers for less money.

Customers who visit any of the locations are greeted with the company’s mascot – a lovable snowman – and the constant ringing of Mixue’s jingle.

Ernan Cui, a Beijing-based analyst for research firm Gavekal Dragonomics has explained why the company is soaring in popularity.

“People are chasing more cost-efficient products,” she told the Wall Street Journal.

Cui highlighted Mixue’s expansion strategy that saw it focus on increasing its operational footprint in smaller cities where it is hugely popular rather than in major hubs.

Its simplicity is one of the major factors of its success with basic bright-red stores selling a limited number of products.

On the menu is a selection of bubble teas, a signature ice-cream cone, and a lemonade making the company the biggest buyer of lemons in China.

Meanwhile, the Snow King mascot has helped boost popularity among young consumers.

The drink and ice cream company began in 1997 when Zhang Hongchao opened his first store selling shaved ice in Henan, a province in Central China’s Yellow River Valley.