First, the development of franchising in China.
Franchising refers to the trademarks (including service trademarks), trade names, products, patents and proprietary technologies, business models, etc. granted to them. The franchisee is awarded in the form of franchise contract, and the franchisee engages in business activities under the unified business model of the franchisor according to the provisions of the contract, and pays the corresponding expenses to the franchisor. Since 1980s, some enterprises in China have begun to use existing brands to expand their scale and develop joint-venture factories and shops. Typical brand associations include Forever, Phoenix, Wangfujing Department Store and Goubuli Steamed Bun Shop. This way of joint venture with brands to expand the scale is the bud of franchising in China.
In the middle and early 1990s, internationally renowned franchise enterprises entered the business circles of China on a large scale. Franchised brands such as clothing and catering have become familiar to people, such as Pierre Cardin, Crocodile, Giordano, Apple Store, KFC, McDonald's fast food restaurant, and color expansion stores such as Fuji and Kodak. At the same time, some domestic enterprises began to follow the example of franchising and launch franchise chains. Their brands include Quanjude Roast Duck Restaurant, China Resources Chain Store and Lianhua Supermarket. Due to the lack of franchise laws and regulations, franchising enterprises lack understanding of brand awareness and standardized management mode, and franchising is still in the exploratory period in China.
In the late 1990s, with the change of market environment, especially the approach of China's entry into WTO, many enterprises began to have a deep understanding of franchising, and gained rich benefits in pioneering franchising practice. The role of franchising in product promotion, expanding service trade, protecting consumers' rights and interests, broadening employment channels and developing individual businesses has also attracted great attention from the government. 1997 The Ministry of Internal Trade issued the Measures for the Administration of Commercial Franchising. Chain Store Association was established in 1998. The government's regulation of franchising activities has promoted the development of franchising. At present, franchising involves retail, catering, repair, automobile service, dyeing and other industries. Franchise contract management, franchise manual, operation manual and standard business model are gradually maturing.
Second, the problems that should be paid attention to when joining.
In recent years, China's franchise has developed rapidly, but the franchise market is not standardized. Those franchisees who advertise in the franchise market and promise to join with various benefits often want to defraud your franchise fee. Therefore, franchisees should consider:
1, join the network. Have a comprehensive understanding of the concession project. Statistics show that China's tertiary industry, especially the service industry, has great room for development, and the franchise projects with small shops and scattered outlets have good prospects. In addition, it depends on whether you have a certain understanding of the project, because with the development of franchising, there are more and more industries to choose from, and the prospects and profitability of each industry are constantly changing.
2. Investigate the franchisor's situation. According to the Measures for the Administration of Commercial Franchising issued by the Ministry of Internal Trade (1997), franchisees should meet the following conditions: ① They have independent legal qualifications. (2) Having a registered trademark, trade name, product, patent and unique management technology or proprietary technology, and having good business performance for more than one year. ③ Have certain business resources. (4) Have the ability to provide long-term business guidance and services for franchisees. Among these conditions, we should pay special attention to know whether the franchisor's trademark is registered with the State Administration for Industry and Commerce and whether the trademark or licensed brand is well-known. The method is to understand through customer survey, advertising volume and brand reputation.
3. Understand whether the franchisee's business network is successful. To know whether his business model is successful, we should not only listen to his words, but also look at his publicity materials, visit franchisees' stores and make unannounced visits to more than three franchisees to see how franchisees evaluate the franchise system. If franchisees don't like franchisees and don't make money, it shows that the franchise system is invalid in coordinating the relationship between the two parties; If the franchisees are independent in image and operation, it shows that the franchise system cannot succeed without strong management technology.
4. Learn and understand the franchisor's operation manual. Whether the project plan and operation standard manual of the franchisor are required to be effective and feasible. Understand whether the franchise store is in accordance with the plan and manual, and whether the actual operation is consistent with it. If the plan tells you how easy it is to dislike money and how small the risk is, it is untrue and unreliable. Because, if the project is so profitable, he won't leave it to you.
5. Be sure to study the franchise contract carefully. We should carefully understand the contents of the contract and inspect the performance of the contract, in which we should carefully evaluate what kind of training the franchisee can provide, what kind of business and technical support it has, how much the joining fee is, and what rights you have. Once the contract is signed, the initial fee will be paid.
Third, the problems existing in franchising.
1. China lacks the system and legal environment related to franchising. Driven by different interests, the good relationship between franchisees needs the support of the corresponding institutional environment and legal environment. At present, the laws applicable to franchising in China include trademark law, economic contract law, anti-unfair competition law, general principles of civil law, regulations on the management of technology import contracts, and regulations on the registration of industrial and commercial enterprises. These laws are difficult to solve the new problems in franchising, and it is also difficult to provide more powerful support for the healthy and standardized operation of franchising.
2. The affiliated enterprises are small in scale and have low influence. At present, there are hundreds of franchised enterprises in China, which are generally small in scale and have low influence. The general development space is limited to this province or this region, and there are few influential enterprises and brands nationwide, and the internationally renowned franchise brands are even rarer.
3. Franchising behavior needs to be standardized. The rapid rise of franchising in China has aroused widespread concern in academic and business circles. Among them, the two tendencies are generally representative. First, some people regard franchising as a panacea for getting rich quickly and accumulating original funds quickly. A considerable number of enterprises take advantage of the rapid rise of franchising to advertise and speculate with less investment, and then use the joining capital of early franchisees to expand their influence and quickly withdraw funds. Secondly, some people think that franchising needs the support of well-known brands, and the establishment of brands requires a lot of capital investment, and the risks are unpredictable. The rise of franchising will soon disappear, just like the fleeting business changes in the past. Based on cognitive bias, it is difficult for franchised enterprises to have long-term strategic considerations. In addition, quite a few franchised enterprises in China do not have standard operation manuals. Most of the operation manuals are paper-based, and the operability is not high, so it is more prone to deviation in the implementation and coordination of network consistency, which offsets the successful effect of franchise cloning.
4. It is common for affiliated enterprises to close down. Compared with self-employment, joining a huge franchise chain network is relatively less risky, and this experience has been confirmed in the practice of international operation. In recent years, the franchise practice in China is not like this, and closed franchisees abound. This is because a considerable number of franchise headquarters are completely focused on how to attract franchisees, as long as they can receive the franchise fee (charged when joining). As for how to support after joining the network, how to improve the influence of the brand and how to maintain the best service quality, they all need to invest, and they don't care. The result will inevitably lead to the confusion of the whole marketing network and the closure of affiliated enterprises.