A Hong Kong-listed noodle chain has taken a small family-run restaurant to court over the similarity of their names, a dispute that has now been resolved with a public apology and a trademark donation.

The case involved the listed company XIAO NOODLES (HKEX: 02408) and a small eatery named "Yu Jian Xiao Mian." The restaurant's owner, a woman from Chongqing, explained the "Yu" in the name signifies authentic Chongqing flavor and was not an attempt to imitate the larger chain. She expressed distress over the lawsuit, noting the proposed settlement of 7,000 to 8,000 yuan for withdrawal would require selling over a thousand bowls of her 8-yuan noodles just to cover the cost, not including expenses.

On June 13th, XIAO NOODLES announced via its official social media that it had withdrawn the lawsuit. Two days later, founder Song Qi issued a public apology letter to the couple running the small restaurant. In the letter, he apologized for the trademark dispute and announced the company would donate its registered Class 35 "Yu Jian Xiao Mian" trademark to them free of charge, allowing them to keep their shop sign.

In response, the restaurant owner, Li Yong, stated that while he and his family personally struggled to accept the apology due to the stress endured, he was willing to accept it from the perspective of the wider noodle industry. He expressed a desire to prevent the controversy from further damaging the industry's reputation.

From Humble Beginnings to a Public Listing

Founded in 2014, XIAO NOODLES specializes in Sichuan and Chongqing-style noodles. To master the craft, founder Song Qi and his wife traveled to Chongqing to apprentice under a street vendor. Applying an engineering mindset, they standardized the recipe, which became the foundation for the chain's subsequent expansion.

The company went public on the Hong Kong Stock Exchange in 2025, becoming known as the "first share" of Chinese noodle restaurants. Its global footprint now includes over 500 stores, with its first overseas location opening in Singapore.

However, rapid growth has brought challenges, including food safety and store management issues. Consumer complaint platforms host over a hundred reports related to the chain.

Strong First Annual Results Post-IPO

The company's first annual report since listing showed robust growth. For the 2025 fiscal year, revenue reached 1.622 billion yuan, a 40.53% year-on-year increase. Net profit attributable to shareholders surged 74.83% to 106 million yuan.

Revenue was primarily driven by company-operated restaurants, which saw a 44.9% increase. A strategy of lowering average order values helped boost transaction volumes, leading to a 1% rise in same-store sales for these outlets.

Despite the strong performance, expansion costs are rising. Rental expenses grew by 30.7% to 275 million yuan in 2025, and depreciation and amortization costs increased significantly as the store network expanded to over 500 locations.