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The office of KFC in China receives numerous phone calls daily from entrepreneurs or would-be entrepreneurs around the country seeking to become a franchisee to operate the famous US fast-food chain business.
"The business model of franchising is increasingly known to ordinary Chinese in recent years," said Xu Zhen with Yum! Restaurants China, which operates the KFC business in China. "It seems the time has come for franchising in China."
The country's growing affluence and status as the world's biggest consumer market have attracted many foreign established brands to open franchised stores in China.
About 30 US brands have franchised operations in China, according to the US Commercial Center in Shanghai, as the United States is the world's most developed country in the franchising business.
The brands include fast-food chains KFC, Kenny Rogers and Subway, beverage brand Starbucks, Athlete's Foot and America's Eyes.
A group of six US franchisers dealing in education, home-moving services and postal services will visit Shanghai from September 21 to 23 to seek new business opportunities, the center said.
"Seen as less risky, inexpensive and lucrative, franchising has become popular among those who hope to start new business in an easier way," said Tara Qu, chief representative of the center.
Franchise sales in China accounted for a mere 2 percent of total retail sales last year, compared with more than 40 percent in developed countries, according to Bill Janeri, general manager with Global Sources, a trade publisher.
"There's significant room for franchising sales growth in China in the long run," he added.
Last year, more than 1,000 franchisees were operating 100,000-plus outlets in China, according to the China Chainstore and Franchise Association. They generated US$85 billion in sales last year.
The association expects franchising will represent more than 30 percent of total retail sales by 2010.
But sha Yiwen, director of the Shanghai Trade Exhibi-tion Office, noted that China's lack of a legal frame-work for licensing and peo-ple's insufficient knowledge of the business form could hamper the development of franchising in the country.
(eastday.com September 4, 2003)
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