Since the reform and opening up, China's beverage market, especially the soft drink market continues to grow and gradually prosperous, at the same time, the competition has become increasingly fierce. Here I will unlock KFC's business approach, I hope to help you.

KFC to ? franchising? As an effective way to expand business around the world, began in 1993 to try to carry out franchising in China, after a period of silence, since 2000, KFC franchise in China only to take "not from scratch" a form of "franchising" is the first brand of KFC's strategy to succeed in the representative of the strategy, with a? Chinese characteristics.

I. What is? Not from scratch?

The so-called "not from scratch" means: KFC will be a mature, profitable restaurant to the franchisee. Franchisees don't have to do a lot of the heavy lifting of choosing a site, opening a store, and recruiting and training staff - it's all readily available." Among other things, site selection is often the key to success, and KFC has done it for you."

This is one of the best ways for KFC to carry out franchising in the Chinese market at this stage," said Su Jingshi, president of Yum China Restaurants Greater China, which owns KFC, Pizza Hut, and other well-known brands, "handing over a profitable KFC restaurant to a franchisee, the franchisee's business risks are greatly reduced, and the franchisee can be successful just by sustaining it."

The KFC franchisee has a lot of work to do.

KFC said the "current stage of the Chinese market" means: on the one hand, some Chinese enterprises are forming a certain economic scale and perfect management system, chain management is rapidly developing and gradually standardized; on the other hand, due to the development of a variety of economic components, fragmentation is a major feature. China has not yet developed a regional business characteristics and the development of such special laws and regulations, only a trial "Business Franchise Management Measures", the provisions of the simple, unable to regulate the franchise brought about by the regional economic cooperation, business assets and commercial capital expansion and other issues of the function.

Under these circumstances, KFC's caution is justified. Since 1998, KFC in the Chinese market since the open application conditions to join the franchise, KFC headquarters in China almost every day to receive hundreds of telephone inquiries and requests to join the letter, but KFC for the franchisee's audit requirements are very strict, the franchisee in addition to the franchisee must have 1 million U.S. dollars or 8 million yuan as a franchise and store renovation, the introduction of equipment and other costs, but also must have the operation of the In addition to having US$1 million or RMB8 million for the franchise and the cost of store renovation and equipment introduction, the franchisee must also have a background and practical experience in operating the restaurant, service and tourism industries. Considering that the competition in the restaurant industry in large cities has been very fierce, the current KFC can be transferred to the restaurant is basically distributed in the higher consumption level of small cities.

Since August 2000, when the first KFC franchise in China "not from scratch" was authorized to be transferred in Liyang, Changzhou, in January 2004, 11 such restaurants have been authorized to franchise. At present, 95% of KFC's 1,000 restaurants in China are directly operated and 5% are franchised.

Second, "not from scratch" franchise content

Financial aspects:

First of all, in the beginning of a franchise must pay $ 37,600 franchise initial fee, which is a one-time fee, and will be based on the U.S. price index in the year to make some adjustments, at the same time, each franchisee in the development of a new store, you have to pay this fee.

Second, the transfer fee for each restaurant is more than 8 million yuan. The business area of a KFC restaurant ranges from 350 to 400 square meters. This RMB 8 million is a reference price for purchasing a KFC restaurant based on some comprehensive indices, and the actual transfer fee will depend on the sales and profit situation of the target restaurant. The franchisee pays this fee to take over an operating KFC restaurant, including all decorations, equipment and facilities, and trained restaurant staff, and including future cash flow and profits generated from the operation. It does not include the cost of leasing the property.

Third, ongoing operating expenses include a royalty of 6% of sales and an advertising share of 5% of sales. These rates and fees are set on an ongoing basis and remain unchanged for ten years after the signing of the franchise contract.

Locations: Certain franchise opportunities are currently available mainly in small and medium-sized cities in China, where the non-agricultural population is greater than 150,000 and less than 400,000, and where per capita consumption is greater than RMB 6,000 per year, in areas where there are already KFC restaurants open. Now KFC does not allow the use of its own stores to open new stores, only the transfer has been operating KFC restaurants.

Timing: from the start of the application to the transfer of stores in about six months; the first term of the franchise agreement is at least 10 years, and future franchisees must voluntarily engage in KFC franchise operations for more than 10 years, preferably 20 years.

Training: Training is a must when joining KFC, successful candidates will be required to participate in an extensive 12-week training program prior to operating a restaurant, 12 weeks of restaurant training to enable the franchisee to effectively master the shift management, leading the restaurant, and other courses that are required to run a successful restaurant, but also includes such as burger workstations, french fries, and other various workstations to learn. Once the franchisee takes over the restaurant, a 5 - 6 month restaurant management internship is also arranged. During the training process, the prospective franchisee will bear their own expenses (transportation costs, living expenses).

It can be seen that behind the strict rules of franchising is a relationship of interest between KFC headquarters and the franchise **** the same. The success of KFC depends on the success of each franchisee. The franchisee must be given adequate support by the franchisee's licensor, and only when each franchisee is profitable can the whole franchise system become stronger. These training courses on the one hand, improve the candidate's ability to work for KFC to train suitable management personnel; on the other hand, the candidate to identify with the KFC corporate culture, with a strong service concept, so as to realize the headquarters of KFC and the franchise *** with the growth.

Three, win-win is the ultimate result

As an advanced business model, franchising does have its superiority. For the franchisee, a mature profit model can be obtained immediately, thus greatly reducing the investment risk. In addition to using the franchisor's trademark and trade name, the franchisee can also utilize the successful store management model and methodology that has been verified by the headquarters, and receive all-round guidance and support from the headquarters. Headquarters of the brand, trade name and products, the franchise business has a basic guarantee; headquarters unified distribution system so that the cost of products have a strong competitive edge; can be advertised and promoted with headquarters resources **** enjoy; join a good franchise system, but also to make their own purchasing, financing and other aspects of the bargaining chips. Therefore, some people regard franchising as the most convenient way to invest in entrepreneurs, is "standing on the shoulders of giants picking peaches", can quickly realize the dream of being a boss.

As a franchise owner, the absorption of investors to join the benefits will be gained: the franchisee to join a one-time payment to the franchisor of the franchisee; a certain percentage or a fixed amount of turnover from the franchise royalties extracted from the franchise; to the franchisee to sell their own products (equipment) profits; distribution of franchised stores, training fees charged. There is also a very important benefit: you can not use their own investment that is to achieve brand and market expansion, thus suppressing competitors.

For KFC, each transfer of a store, will receive a franchise initial fee of $ 37,600, and a one-time transfer fee of 8 million yuan, and each year there are 6% of sales of the franchise royalties and 5% of sales of the advertisement to share the cost of all the transfer of the store, mostly for the C cities, which have a relative potential for development, the pressure of competition is less. It is conducive to investors to achieve a good return, and at the same time this also gives KFC to reduce management costs and business risks. Through the transfer of the proceeds of the funds, you can continue to open stores, for KFC, is a risk-free high-speed expansion path.

For the licensee, join KFC, through training, can master the advanced enterprise management, their own personal management of KFC, often more than hiring a professional manager to be more attentive to the transfer of the store, the proceeds will be more than before, which is why KFC want to licensee personal management of the reason, at the same time, this is to KFC to save a lot of money to manage the cost. The licensee stands on KFC's shoulders, and through his own hard work, he can also bring in considerable revenue for himself.

This new way of franchising by KFC called "Chinese characteristics", the essence, that is, behind the strict rules of franchising, is the headquarters of KFC and the franchise **** the same relationship of interest. KFC's success depends on the success of the franchisee. This is compared with some domestic only collect franchise fees, no management of investors, no training chain owners, KFC's strong brand awareness is precisely another guarantee of its success.

In the hundreds of franchise brands in China, KFC's "not from scratch" franchise is probably the most robust, and also the best overall results. This approach ensures the win-win situation that KFC has been pursuing - investors make money with little risk, and KFC expands the brand's market share with no risk.

Globalization Philosophy for Entering the Chinese Market

First of all, at the time of the entry period, the main strategy was to introduce a new western-style fast food service system and catering concept.

1. With its new chain business model of unified logo, unified clothing, unified distribution methods, and ultimately relying on its high-quality products, fast and friendly service, clean and hygienic catering environment to establish its position in the Chinese market.

2. We have been insisting on 100% localization of staff and continuously investing money and manpower to carry out multi-faceted training at all levels. From the restaurant waiters, restaurant managers to the company's functional departments of management, the company in accordance with the nature of their work requirements, the arrangement of scientific and rigorous training programs. In order to make the management staff reach the professional level of fast food management, KFC has also set up a professional training base applicable to restaurant management? Education Development Center.

3. KFC? Speed-oriented? The spirit of the fast food industry makes it pay special attention to the team spirit, relying on its teamwork to achieve high efficiency, which ensures that the peak business service correctly and quickly. So that the formation of a highly efficient and flexible, perfect and advanced management incentive mechanism of its team spirit and excellent management level is the secret of KFC based on the market.

4. High-quality service, in KFC, you get the service will be more than you originally hoped to get the service. KFC's mission is to put the customer first, and it is this mission that makes every customer, adult or child, feel at home.

Maturity, developed a strategy of combining Chinese and Western

1. KFC hired more than 10 domestic experts and scholars as consultants, responsible for improving and developing fast food varieties suitable for the needs of Chinese people. KFC has been to fried chicken, shredded vegetable salad, mashed potatoes as the main varieties, but for the Chinese people's dietary tastes continue to change, the varieties are too single on the development prospects are not favorable. In order to cater to the tastes of Chinese people, Lao Mei has successively launched KFC, which is very popular among Chinese people. Spicy Chicken Wings? The KFC Spicy Chicken Wings Chicken Thigh Burger? The KFC Hot Wings, Chicken Thigh Burger, and Chicken Burger Burger. Hibiscus Fresh Vegetable Soup? etc. This is an unprecedented shift for KFC, which has always focused on tradition and standardization.

2. KFC has set up a special China Healthy Food Advisory Committee to research and develop new dietary products suitable for the tastes of a new generation of Chinese consumers, in order to further expand the market.

Establishment of Franchise Approach

Like other regional operations, franchising has played an important role in the expansion of KFC. A franchise is the right to use a patent, trademark, product formula, or any other valuable method obtained by the franchisor by paying a transfer fee to the transferor, who does not control strategic and production decisions or participate in the distribution of the franchisor's profits.

KFC adopted the means of operation is this franchise franchise way, KFC provides brand, management and training and centralized and unified raw materials, service system, the partner to use the unified brand, services to operate, and finally the two sides in accordance with the agreement to share the commercial interests. Because China had not yet opened up to the outside world, the political risk of KFC's development in China was greater, and China's cultural segregation was more serious, so franchising became the first choice for KFC to enter the Chinese market. Another advantage of franchising is that KFC can ensure a stable income with little investment and it will leverage the existing business situation. This is a very attractive option in places where franchisees can be easily prevented from deviating from KFC's operating procedures. It was by developing the right market strategy to enter China that KFC has blossomed in the country since its introduction from the US in 1986.

No Starting From Scratch

No Starting From Scratch means that KFC turns over an established, profitable restaurant to a franchisee. Franchisees don't have to do a lot of the heavy prep work of choosing their own site, opening a store, recruiting & training employees, etc., it's all readily available." Among other things, site selection is often the key to success, and KFC has done it for you." This is one of the best ways for KFC to carry out franchising in the Chinese market at this stage, handing over a KFC restaurant that is making a profit to the franchisee, the franchisee's business risk is greatly reduced, and the franchisee can be successful just by maintaining...?

Since 1998, KFC in the Chinese market to join the public franchise application conditions, KFC China headquarters almost every day received hundreds of telephone inquiries and requests to join the letter, but KFC for the franchisee's audit requirements are very strict, the franchisee in addition to the must have 1 million U.S. dollars or 8 million yuan as a franchise and store renovation, the introduction of equipment and other costs, but also The franchisee must have a background and practical experience in operating restaurants, service industries and tourism. Considering that the competition in the restaurant industry in large cities is already very fierce, the restaurants that KFC can transfer are basically located in smaller cities with higher consumption levels. Since August 2000, when the first "not from scratch" KFC franchise in China was authorized to be transferred in Liyang, Changzhou, in January 2004, 11 such restaurants have been authorized to be transferred. At present, 95% of KFC's 1,000 restaurants in China are directly operated and 5% are franchised.