Franchising in China

Naturally, when there are great gains to be had, there are great risks. A lack of understanding in cultural protocol is a commonly occurring pitfall for foreign, new to market business endeavors. Also, even positives such as China’s size, can commonly be a double edge sword. It is imperative for companies considering international expansion to create a solid entry to market strategy, which evaluates if the firm has any potential in achieve gains in a foreign marketplace.

Franchising as a method of globalization has lead Subway to seek heights in the international market. However, we conclude that, Subway gives a clear view of its success through various franchising strategies, other businesses can improve their models by changing their plans and organized structure like Subway. Considering Subway as a franchising concept, the advantages rank the disadvantages as more and more Subway restaurants have emerged. According to this, the biggest advantages might be their trademark strength connected to their global marketing and their sophisticated franchise system. The cost in terms of initial start-up fee and on-going costs, as well as the risk transfer can be seen as disadvantages of this system. Even

Despite Yum! brands huge success in china, there have been a lot of risks and threats in entering the local market. In respect to that its critical to mention the oppositionof the local population in perceiving fast food industry and especially western culture entering their own market.

Two immediate risks could potentially hinder the progress of initiating a new Buffalo Wild Wings in the People’s Republic of China. The first immediate risk is starting a new venture so far from home. The distance from the United States can limit the involvement of senior management in the day-to-day operations of the business. In attempt to mitigate this risk, Buffalo Wild Wings can seek out local interested parties in attempt to franchise in China. This action will do a few things. First, it will facilitate the need for someone on the ground that is familiar with the local laws and policies. This lessens the stress of having to do extensive research to ensure the company is compliant will all local and international policies. In addition, by Franchising in the People’s Republic of China the financial burden on Buffalo Wild

The year 2015 was an exceedingly profitable year with revenue growth of XX% and total revenue topping out at $XXX globally. One country’s operations that has contributed a major portion of the escalation in profits is China for which, unlike other restaurants, YUM has found the key to success. In 2015, YUM opened xxxx new restaurants which has permitted massive profits. YUM’s exceptional strategic planning and partnerships have permitted the China market to be spun off into its own standalone entity. YUM believes that this spin off will allow for the pivotal China market to controlled in a more efficient manner that is fueled off key partnerships and allowing local control to assist these restaurants to swiftly adapt to local customs and desires. With the success of this venture, numerous experts are suggesting and predict the separation of the three separate entities to help fuel increased flexibility and allow YUM to meet the ever-rising growth demands of the various stakeholders.

Introduction Opening up a business such as a franchise can carry many risks, both financially and personally but can also be very rewarding and challenging. Some people make a decent living, some end up rich, then again, plenty of people fail. (MSNMoney, 2014) There are many advantages of owning a franchise. Some advantages are that you have association with a well-established brand, reputation and product or service, access to established standard procedures, operating manuals and stock control systems.

The entrance of china was more opportunistic expansion rather than strategic. The huge population of 1.4 billion people and annual GDP growth of 14.5% over the past decade, China’s urban population rise from 36.2% of the total in 2000 to 46.6% in 2009, and the strong middle class whose per capital income surged from RMB 6,282 to RMB 17,175 (In 2010, RMB 1 = USD 0.15.) all made china as great opportunity for the restaurant that was facing a mature market that had a growth of merely 1%. Another attractive factor of china market was the success of many American restaurants such as KFC, McDonald’s and Pizza Hut’s. However

In the 1950s and 60s, fast food chains epitomized by McDonald 's revolutionized the farming and food distribution businesses (Fast Food, 2007). Rivalry against new fast food restaurants ignited competition. This led to franchisers expanding hundreds of fast food restaurants looking for big bucks. Additionally, as these chain became more accessible to

It is a good opportunity for U.S. companies to invest in a franchise in Brazil because the risk of failure in a franchise business in the country is very low compared to non-franchise businesses, it is the easiest and fastest business to launch in the country and because Brazil ranks fifth in the world franchising league table.

3. What are the advantages and disadvantages of McDonald’s using franchising to grow more quickly in China?

Through a joint venture franchising structure with fairly rigorous contractual stipulations Michel’s central administration were able to expand the business to China “on a shoestring” while still maintaining “arms length control” of how the Chinese business was run. The licensee and joint venture partner bore the financial risks, while risks of damage to the brand that a failed venture would cause were deemed negligible due to China being so far away from the Australian market.

Firstly, I would like to put some light on the trade market that was there is late 1800s and early 1900s. This was the time when businesses used to trade within their countries only. Slowly businesses started growing. This was the time when the entrepreneurs started trading globally. Hence, in 1950s the growing of businesses internationally was termed as ‘Globalisation’. Globalisation is the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange (http://www.bbc.co.uk/schools/gcsebitesize/geography/globalisation/globalisation_rev1.shtml). Globalisation has increased trade internationally. Firms which were national firms are today Multinational Companies. Globalisation has rapidly increased in the last 50 years. Hence globalisation has resulted in increasing demand of the products, hence benefiting the economies of scale. As there is an increase in investment by the companies, there is sharing of knowledge and technology between the countries. It has also helped to reduce unemployment all around the world. But like everything, globalisation also has its disadvantages. As countries are becoming more and more dependent on each other, a bad economic shock in one country can affect the economy of other countries as well(http://www.economicsonline.co.uk/Global_economics/Globalisation_introduction.html). It has also

Many International firms competed to enter the vast China market for franchising and expanding their products and services in a market which offers a wide scope of business opportunities mainly the size of its population and the openness of China on the Western world after so many years of its protectionist policies. In this respect, Levendary Café, a huge American leading Company operating in fast food like other American companies such as McDonalds and Kentucky Fried Chicken is trying its chance to enter the China market but there are some discrepancy of views between the top management of the Company at home n America and the appointed manager to run the Levendary Café operations in China, Louis Chen and the new CEO Mia Foster. The new CEO faces many issues to deal with, the design and look of the Levendary outlets which Chen has changed and even used some plastic chairs in some outlets to the discontent and disapproval of the top management of the parent Company in America

KFC, a fast food restaurant brand originated from USA has become the largest foreign fast food restaurant in China. According to the research, there are more than 4600 KFC restaurants in 500 different cities in China in the year 2014 which is much more than McDonald’s 1000 restaurants. (KFC China official) KFC China is held in a high repute and it has a positive impression by the Chinese customers and the main reason KFC China can become such successful is the moderate, sagacious distribution strategies they have.

Franchisors are increasingly having to be more and more selective in the adoption of franchisees with factors such as economic climate and the potential difficulty with growth playing key factors in the decision making process. It is not simply an ability to grow which creates a successful Franchise and nor is it the desire of any franchisor to adopt every potential franchisee. Franchisors are becoming more and more scrutinising as the global economy declines. There is a general understanding within any franchised