Franchising in China

Big Event before Franchising

was introduced in China

1957-1961 Great Leap Forward-Goal: to become a leading industrial power

through the construction of steel plants

-Resulted in famine and 16.5-40M death

Beginning of Franchising in China

1987 –KFC in Beijing, which brought

the idea of “fast food”

1990 –McDonald’s in Shenzhen

-Pizza Hut in Beijing, which

brought the idea of “casual dining”

Major US Franchisers

Catering Sector

Retailing Sector

Real Estate

Photo Developing

Printing Service

Footwear

December 1991 –Ronghua Chicken“Wherever there is KFC, there is Ronghua”

2000 –it shut down all its stores“lack of the kind of well developed system

that KFC possesses which oversees every

detail of the business from making the

product, to service, to site, to staff training

and management.” –Jieng Wei, president

Franchises that Originated in China

April 1995 –Red Chinese Sorghum

Mutton Noodle

After 8 months, + 7 stores

But years later, it ran short of money for

Qiao’s intent on expanding without

improving the management of the

chain.

Successful

Franchises

Ranked as the 3rd most

popular food chain in

1999, after KFC and

McDonal’ds

–chinadaily.com

China’s Regulations in Franchising

1997 –Regulation on Commercial Franchise Business established by Ministry of Internal Trade

2005 –Regulation on Commercial on Franchise announced by Ministry of Commerce

Growth of Major Franchising Industries in 2004