Franchise Your Business
Franchise In China
The New Franchise Regulations define “franchise business” as an arrangement whereby a franchisor through an agreement grants franchisees the right to use its business operating resources, including registered trademarks, logos, patents, and proprietary technologies, whereby the franchisee conducts business under a uniform mode of operation and pays franchise fees according to the agreement.
Qualifications of Franchisor and Franchisee
(1) The franchisor must be an enterprise, not an individual or other entity.
(2) The franchisor must possess registered proprietary marks (trademarks, logos, patents or other proprietary technologies).
(3) The franchisor must have a stable and reliable system to supply goods and if the franchisor is required to supply goods to the franchisee assure the quality of such goods.
(4) The franchisor must have a good business reputation without any record of dishonest and/or fraudulent behavior in franchise-related activities.
(5) The franchisor must have a mature business model and provide franchisees continuous support and services with respect to management instruction, technical support and training.
(6) For a franchisor to be engaged in franchising it must have at least two company-owned stores and have operated them for at least one year (the “2 + 1” requirement).
Offering Franchisors International Opportunities for Expansion
China has developed an important market serving the worlds' business growth and Franchise Expansion. Business today has the ability to penetrate the Chinese Market in it's early stages. Later on, these windows of opportunity may have passed.
The Chinese marketplace has a proven consumer base of over 1 Billion persons. The economy in China is growing at double digit figures and its' people have a desire for more luxuries and a better way of life. Western ideals and styles, including dress and food consumption have skyrocketed into one of the most expansive economies in the world today.
The United States is the leading franchising market in the world, so far. But China is fast on its' heels and might soon overtake the USA. It is a very astute and exciting market for international franchise companies to penetrate, since the Chinese have always tried to adapt to the Western way of life.
The Chinese Government has allowed foreign franchise companies to penetrate the China market with new, more relaxed rules and much easier entry. Some of the American companies presently franchising in China are: KFC, McDonalds, Pizza Hut, Starbucks, Days Inn, Sign-A-Rama, and many more. To facilitate this new attitude in China, the government has joined the WTO, (World Trade Organization) and adopted their rules of conduct.
The method of entering the Chinese marketplace is best used by securing area developers in the 100 + urban enters that have over 100 million consumers. These persons have demonstrated an ongoing desire for more western goods and services.
Franchising in China with a Master Franchise system geared to the extremely large Chinese market, normally multiple master franchises are best advised. The most important thing to remember when contemplating the Chinese Franchise Market is that you are entering the second largest Franchise market in the entire world and to be prepared to expand your Franchise system quickly to take advantage of this burgeoning consumer marketplace.
Provinces in China