...Franchising Industry in China 1. An Overview of Franchise Development in China Franchising first emerged in China in the late 1980s. In 1987, KFC’s first Chinese outlet was opened in Beijing, the capital city of China. Franchising industry in China experienced a period of disordered development in the early days. In the poor legal environment, some franchisers conducted substandard business or even defrauded franchisees of money. In some cases, franchisees delayed payments to the franchisers or infringed on their intellectual property rights. In 1997, the Ministry of Internal Trade established the first Chinese franchise law, the Regulation on Commercial Franchise Business, which included guidelines on such issues as trademarks, copyrights, and intellectual property protection. A lack of specific provisions in the 1997 version governing foreign direct franchising allowed relatively few major international companies to have significant franchise businesses in China. Although many of these international brands such as 7-Eleven, McDonald’s, KFC and Pierre Cardin, normally do business through franchising, in China foreign franchising was still a grey area before the new rule was published. Because franchising typically does not involve investing in equities, the Chinese Government used to put less focus on such business. But the government came to find that franchises are a good business model for China to help solve its job problems and its scattered private capital. China’s capital...
Words: 2649 - Pages: 11
...| | |Cand. merc. program | |INTERNATIONAL MARKETING AND MANAGEMENT | | | | | | | | | |The cultural and social influences on the buying behaviour process: the Pirelli RE case study | | | | ...
Words: 15068 - Pages: 61
...here.For a full list of our downloadable FDDs please click HERE.The Franchise Disclosure Document (FDD) is a requirement by the FTC. All franchisors are obliged to provide the FDD to prospective franchisees before they commit to investing in a new franchise. The FDD is of great importance to prospective franchisees because it contains important information about the franchise. The FDD provides key financial information such as the initial fees payable to the franchisor, annual royalties, likely start-up costs and probably most importantly, likely earnings from owning a franchise unit. If you are interested in finding out more about a franchise, it is essential that you get a copy of their latest FDD. | | Date Incorporation: 1954 Franchising Since: 1955 Headquarters: Canton, Massachusetts Business Description: A Dunkin' Donuts Store sells coffee, donuts, bagels, muffins, compatible bakery products, sandwiches, as well as other food items and beverages compatible with the franchisor’s concept. Franchise Offer: The franchise offered is for the right to operate a Restaurant, selling doughnuts, coffee, bagels, muffins, compatible bakery products, croissants, pizzas, snacks and other sandwiches and beverages that Dunkin’ Donuts approves. Dunkin’ Donuts encourages franchisees to develop a network of Restaurants within a targeted area or areas under the Store Development Program. Financial Assistance: The franchisor facilitates through third party lenders, financing...
Words: 1582 - Pages: 7
...in foreign currencies - Inflation rates- Unemployment rates B) Visitor Market 1. Hotels ` - Current number of hotels in market are - Age of existing hotels in market area - Occupancy rate of current hotels, as well seasonality of occupancy - Rates of new hotel construction (could indicates per year during last ten years) C) Political Risk - What type of government system is in place - Nationalization of major industries - Reduction of foreign interest in local business ventures D) Real Estate Markets - Liquidity of real estate - Current vacancy rates/occupancy rates - Number of real estate properties owned by global companies - Real estate turnover rates (how often are properties sold and converted to new business venture) - Cost of buying versus leasing commercial real estate 3. Why does the Hard Rock put such serious effort into its location analysis? Location decisions for Hard Rock Café begin with a global view which involves analyzing a country, then a region within the country and then finally a city location (Amer,1999). Specifically, within this assessment, it consists of studying and evaluating political risks, currency risks, social norms, social costs, local business practices and whether the brand will fit the market or not. The company must insure that the market will provide large enough long term populations with high enough...
Words: 647 - Pages: 3
...A business will have two or more options at its establishment to get the premises within which it will operate. It can build or hire a premise, but it can also franchise. Franchising is a strategy by which a business gets a premise by buying and not building or hiring. In franchising thus, the business purchases a building that is already complete and starts operating in it immediately. This is for different reasons. LIVEPAPERHELP.COM is able to write and provide the best tailor made essay on Franchising Franchising is becoming popular in the acquisition of business premises. There are many reasons for the high rates of franchising experienced in many economies. Many businesses are extending their operations by franchising and this is done on many grounds. There are various reasons to justify franchising albeit the challenges. The building of new premises for business is time consuming. The time taken for legalization procedures in the acquisition of land is rather long. There are many bureaucratic steps to be followed pegged on law. Franchising however solves this problem. In franchising, a business does not have to undergo through all the processes of land acquisition for the construction to take place what happens is simply property exchange and business starts. The time wasted between land acquisition and completion of construction for business to commence is used in business operation and this earns the business more profits. The current global costs of construction...
Words: 562 - Pages: 3
...Name Course Date Franchising with Burger King Burger King franchising operations started in 1954 basing its market on the success of signature Whopper hamburger. Success was imminent as years later the fast food empire had more than 12,000 burger franchises in United States and other foreign countries. Modern lifestyles and mobility of the business continuously allow fast-food restaurants to enhance its growth due the growing number of new clientele. The positive market prospects make the quick-service restaurants a successful franchising business. Burger King Corporation encourages standardization of the quality and standards of products offered in franchises. Burger King also entices their franchisees with ways of financial operations, training in store management and the preferable storage facilities. However, franchising could be a new or an existing one. As for a new franchise, the applicant has to meet certain set standards to qualify as a franchisee of the Burger King Corporation. Organizing financial information is the first step as a new applicant. This is a requirement in order to qualify as a franchise or for a bank loan if necessary. As at 2012, a potential franchisee was required to have a minimum of $500,000 in liquid assets and a net worth of $1.5 million to qualify as a potential applicant. After that, the applicant has to research on lenders suitable to supply the food commodities at a cost effective franchise loan. The lenders considered are to provide...
Words: 954 - Pages: 4
...Industry Conditions While a difficult economy has caused most consumers to spend less, the market for quick-service restaurants, has experienced slow growth recently (Standard and Poor’s, 2012). The increase in traffic from those switching from higher priced restaurants to quick-service restaurants has been balanced by the number of individuals who opt to eat at home to decrease their costs of eating out. Further, costs for quick-service restaurants have increased. According to Standard and Poor’s (2012), increases in food and paper costs this past year, have resulted in lower operating margins as restaurants are assuming the costs rather than increasing the cost of food for consumers. According to Jim Yin (n.d.), CFA, “Year to date through February 17, the S&P Restaurants Index was up 4.4% versus an 8.7% increase for the S&P 1500 Index. In 2011, the sub-industry index outperformed the 1500, with a gain of 27.9% versus a 0.3% decline.” Financial Position of McDonald’s Corporation (MCD) McDonald’s Corporation (MCD) is the leader in global foodservice retail with more than 33,000 restaurants worldwide and 1.7 million employees in 119 countries (“McDonald’s Corporation”, 2012). Approximately 68 million people eat at McDonald’s each day (“McDonald’s Corporation”, 2012). With international growth and globalization on the rise for many quick service restaurants, such as Starbucks and Yum!, McDonald’s Corporation has also taken advantage of worldwide global growth. McDonald’s...
Words: 760 - Pages: 4
...One of the company’s primary competitive differences is keeping it simple and perfecting their limited menu. Five Guys was built with the intent of keeping the Murrell family together as a unit and those strong family values remain today. Each of the seven Murrells own equal company shares of Five Guys, totaling 75% of the company. The family continues to hold business meeting at 1:00 PM on Tuesdays at their Virginia headquarters and decisions are made by a unanimous vote. The Murrell family has remained constant on the simple concept they started their business; creating a better burger and while making a little money doing it. Three factors that have contributed to Five Guys success is their branding, business ethics and franchising. Five Guys quality centered brand believes in old-fashion advertising, the company has not used mass media to promote business. The Murrells decided early on, never to embark on marketing, they use their food to market their products. The décor symbolizes their simplistic way; the floor plan provides an open view into the kitchen visible for all to see with red and white tiles on the floors. The Five Guys burger is...
Words: 956 - Pages: 4
...Introduction to International Business Course project: Barriers for franchise business in Kazakhstan Prepared by Shynar Galiyeva 2013 Introduction Kazakhstan is the ninth largest country in the world, sharing its borders with Russia, China, Uzbekistan, Kyrgyzstan and Turkmenistan. Astana is the capital and Almaty is the largest city and considered to be a financial center of the country. The population of Kazakhstan is about, 16 million, which is low considering the large size of the territory. Nowadays Kazakhstan is known as a country committed to the principles of democracy and market-based economy. After the collapse of Soviet Union and over 20 years of transition period, Kazakhstan has developed into one of the leading economies within the Commonwealth of Independent Countries (CIS). This was achieved mostly because Kazakhstan is very rich for natural resources. Up to the present time, around, 160 oil and gas deposits have been discovered on the territory of the country. Business in Kazakhstan is often focused on the oil and gas sector, which has been responsible for the country’s strong economic expansion over the last decades. However, these are not the only strong sectors of Kazakhstani economy, it possesses almost a quarter of the world’s uranium reserves, holds leading ranks in reserves of barite, chromite, phosphate, copper, lead, zinc, iron ore and gold. Although, Kazakhstan’s economic growth is profoundly dependent on the oil and mining sectors...
Words: 3301 - Pages: 14
...Strayer University February 26, 2012 Financial Plan Based on an internet search of various start-up coffee shops, the anticipated start-up costs for the coffee shop I am opening in Atlanta will be approximately $175,000, of which $125,000 was provided by five investors who will each retain ownership shares proportionate with the amount of capital invested. The remaining $50,000 will be financed through a bank loan. Belissimo Coffee Info Group suggests that sit down shops cost approximately $200,000 to open (Belissimo Coffee Info Group) The shop will begin operation as a very small sit-down shop, with barebones décor, which I believe can be accomplished for $175,000 in the city of Atlanta, thanks to historically lower costs of real estate in the south, comparative with other parts of the country. Growth of the business – including expansion of selection and continued purchase of high-quality products -- will be financed through re-invested profits in the business, to avoid the need for taking out more loans. I plan to repay $10,000 of the loan in the first year, $15,000 in the second year, and $25,000 in the third year, as the brand is established and clientele and profits increase. According to an article on smallbusiness.chron.com, businesses should strive for between 15 and 50 percent cash reserves (Dozier). In the fourth year, the business will begin operating with 20 percent cash reserves, to increase by two percent for each of the next six years, reaching a...
Words: 1848 - Pages: 8
...LEGAL FORMS OF BUSINESS Preferred Form of Business for Different Business Scenarios Abstract Either when starting a business, or even when the venture parameters have changed, owners must decide in regard to the most suitable business structure for their needs. Whether the business will be a sole proprietorship, partnership, limited liability company (LLC) or corporation, it depends on the type of business, how many owners it has, and its financial situation. There is no one choice that suits every business situation. This paper analyses several of the most important factors to be considered when deciding in regard to the business structure, including: • Potential risks and liabilities of the business • Formalities and expenses involved in establishing and maintaining the various business structures • Owners’ income tax situation, and • Capital investment needs. Also this paper provides recommendations and examples of business structures which are suitable for different ventures. Sole Proprietorship A sole proprietorship is a one-trader business, that is, an entity owned and managed by one person. The formation and structure of a sole proprietorship business can is very informal, is not subject to extended federal or state regulation, and is relatively simple to manage and control. The main characteristic of a sole proprietorship is that the owner is inseparable from the business, which gives the owner complete control over...
Words: 3501 - Pages: 15
...agreement, as in "we have the Taco Bell franchise in our town." 5) adj. referring to a "franchise tax" which is placed on businesses (especially corporations) for the right to conduct business, as distinguished from a tax on property, income or profits tax. Source: http://legal-dictionary.thefreedictionary.com/Franchise+system According to Steven C. Michael Franchising, in which independent businesses operate under a shared trademark using a common production process, is used primarily by service businesses. It is an enduring and pervasive organisational form. As an organisational form, franchising has a large and visible presence in consumer industries such as restaurants, lodging, auto repair, real estate, hair styling, and specialty retailing, where it has captured typically thirty to forty percent of sales. Business services in which franchising is prominent include temporary employment, commercial cleaning, printing and copying, tax preparation, and accounting services. Recent areas of growth include home health care, business signage, and child development and education. Historically, franchising was introduced in the United States in the early 20th century by manufacturers in order to secure local distribution of their product (Dicke 1992). Franchise...
Words: 1298 - Pages: 6
...Report On “Porcini's Pronto: Great Italian cuisine without the wait!" Submitted in partial fulfillment of the requirement of Course in Strategic Marketing Management Submitted by: Under the Guidance of: Name: Sitaraman V Iyer Prof Yim Bennett Chi Kin Roll No. 2013963031 MBA Full-Time Batch 2013-14 University of Hong Kong INDEX Serial No. | Topic | Page Numbers | 1 | Executive summary | 3 | 2 | Topics | Introduction | 4 | | | Business Model to select | 6 | | | Porcini Pronto’s business projections under various business models | 7 | | | Analysis | 8 | | | Recommendation | 9 | Executive Summary Porcini's is a full service restaurant chain service chain which operates across 23 locations employing over 900 people generating $94 million in revenue at a profit margin of 4%.Although porcini had been growing consistently over the past few years the management believed that the full service restaurant business was nearing saturation and thus the time was ripe to look at other business models to achieve growth. Given that the focus was to grow domestically Mr Tom Alessio, marketing vice president at porcini, influenced senior executives to consider opening limited menu outlets called Porcini's Pronto to serve interstate highway travelers as most outlets serving this segment were either fast food or low end outlets. The problem in the hands of the management was to identify the right format, locations and overall strategy...
Words: 2150 - Pages: 9
...Chapter 4 Franchising and the Entrepreneur Introduction Franchising is an important part of American business and this powerful distribution and marketing system is also influencing the global economy. Franchising can be traced to Civil War times, when Isaac M. Singer devised a more efficient, less expensive way to sell his Singer sewing machines through franchised outlets. Retail outlets dominate franchising, but increasing demand for consumer and business services is producing a boom among service-oriented franchises. The Franchising Boom! Franchising has experienced exponential growth rates in the United States and abroad and its growth in recent years is phenomenal. Franchising is a major reason for U.S. business growth and dominates industries such as lodging, real estate brokerage, quick-serve restaurants and convenience stores and is become increasing poplar in other industries Global Franchising Franchises account for more than 50 percent of all retail sales, totaling more than $1.4 trillion. More than half of U.S.-based franchise companies support international operations and 30 percent of their franchise units are located on foreign countries. The markets to watch include Europe and Pacific Rim countries. WHAT IS A FRANCHISE? Franchising - Defined Franchising describes a semi-independent business owners that pay fees and royalties to a parent company in exchange for the right to sell its product and services under the franchiseer’s trade name and often...
Words: 3988 - Pages: 16
...Wyndham International Summary of Key Facts: Wyndham, restructured from real estate to hotel chain. Upon acquiring by Patriot American Hospitality, a paired shared real estate investment trust (REIT) renamed itself as Wyndham International. They acquired many small hospitality companies. Due to declining financial health and federal regulatory scrutiny, the company came up with restructuring plan. They faced challenges associated with franchising strategy and also largely due to decentralized IT. With the entry of new executive team, they centralized and integrated IT infrastructure, for service standardization and more segmentation. They started various guest recognition/guest loyalty programs. One such novel program was ByRequest which would customize guest profiles according to customer needs. It also won many honors for Wyndham. Problem Statement: Wyndham International despite major acquisitions was facing problems with franchises control. The ByRequest Program had got laurels to Wyndham, but executive team deliberated whether the competitive advantage gained would be sustained over time. They still were unable to generate greater brand awareness Root Cause of Problem: The ByRequest Program did not garner significant value for the members of the program due to lack of adequate business and IT strategizing. Lack of recognition from technology standpoint, managing emerging technologies was a contributing factor, too. Alternative solution: 1) Need of a Proper IT governance ...
Words: 400 - Pages: 2
