The difference can make or break a business.
Getting Started The Pros and Cons of Franchising in China US companies must jump hurdles to operate successful franchises in China, but the potential benefits are too great to ignore.
The China Chain Store and Franchise Association CCFA —a quasi-government nonprofit membership association for Chinese and foreign retailers, franchisers, and well-known foreign brands—also formed. The industry association now has members withoutlets across China. CCFA has also monitored the top franchises in China to gain a clearer picture of franchise development.
Inthese companies operatedfranchise stores, an increase of Franchising, a business development method for expanding a company and distributing goods and services using an established business system and a recognized brand name, has advantages and disadvantages.
On the positive side, franchises give individuals an opportunity to start a business with a proven success rate at minimal risk. The franchisor owner of the business that provides the product or service gives the franchisee independent party training, support, and marketing programs.
In addition, the business can be a highly recognized foreign brand known for quality and service. On the negative side, to open a franchise a franchisee must pay an initial fee to acquire the brand, business system, and other resources; pay on-going royalties; and follow the franchise system.
Filling consumer needs As Chinese consumers earn more discretionary income, they want the quality, brand, convenience, and service associated with Western brands. This group is largely a young, upwardly mobile, and aspirational two-income family demographic with one child and considerable discretionary income.
Food service As with franchise development in other emerging markets, food franchises first came to China from the United States. The Yum Brands, Inc. None of these brands initially franchised their outlets in China, however; they were company-owned and operated, in some cases with a joint venture JV partner.
Many other food franchises have entered and expanded in China, some of which grant a regional license to a Chinese company, which builds, owns, and operates units by itself.
Before these US brands entered China, there were few places where Chinese or foreign companies could get printing service; print shops were not fully equipped and staff did not speak English. After a slow start, many US hotel brands have entered China—some by granting franchise licenses and some through JVs.
First, hotel brands built five-star hotels for foreign business travelers in large, first-tier cities. But in recent years, US companies have also been building hotels for Chinese business travelers in second- and third-tier cities.
Customer service franchises Auto, education, and real estate franchises soon followed business services franchises. As Chinese consumers started to buy cars, they began to need professional service centers for car repair and maintenance. Foreign franchises face opportunities… Many trends indicate that the China market is ripe for franchises.
The consumer class is expanding fast. The large group of middle- and upper-class consumers can afford to buy more than basic necessities, and many members want to show their wealth through what they buy—for example, by purchasing a cup of expensive foreign-branded coffee and walking around with it.
They are purchasing big-ticket, branded items—often on their credit cards. Western brands are highly regarded. Many consumers perceive Western brands as providing quality, convenience, and customer service.
This is true especially in the retail and food sectors, where most major food franchises are either already present or are entering China see Understanding Chinese Consumers.
Western franchises bring new and modern business systems. Successful US franchises bring a complete business system, management processes, job training, and the potential for healthy and reproducible bottom line margins.The McDonald’s Success Story.
Max Book Notes, Business October 26, August 8, 8 Minutes. Examining the company’s history, there are three elements that stand out: their franchising model, their leadership in cost and time efficiency, and their ability to convey those . The history of McDonald’s is as nauseating as you might expect.
offering to franchise their business across the US. Consumed with his own success, Kroc enlisted a lawyer and started his. For example according to (leslutinsduphoenix.com), under a McDonald’s franchise agreement, McDonald’s owns and leases the site and the restaurant building.
All the franchisees must use standardized McDonald’s branding, menus, design, layout and administration systems. Check out this list of companies that are available for franchising in the Philippines! We provide below detailed information about the franchise fee, total investment cost, franchising application steps, and contact information for each franchise.
The Story of How McDonald’s First Got Its Start From the orange orchards of California, two brothers sought a fortune selling burgers (First Original McDonald's Museum via Facebook).
Approximately 90% of McDonald’s U.S. restaurants are owned and operated by independent business men and women: our Owner/Operators. McDonald’s management listens carefully to and collaborates with our Franchisees, working together to develop successful, independent businesses all over the globe.