Franchising is the franchisor will own the trademark (including service mark), trade names, products, patents and proprietary technology, business model in the form of franchise contract awarded to the franchisee to use, the franchisee according to the provisions of the contract, the franchisee in the franchisee's unified business model to engage in business activities, and to pay the corresponding fees to the franchisor. Obviously franchising is a kind of business skills, business forms of licensing, is a kind of software technology that is the grant of intellectual property rights, it is not subject to financial, geographical, time and other aspects of the limitations, at the same time can be developed in a number of and in any geographical area where there is a group of consumers to develop, and to low-cost small risk characteristics of rapid expansion.
Today, franchising is developing rapidly with a strong momentum as the globalization and internationalization trend of business development. The United States in recent years, more than half of the total social retail sales through the franchise mode of realization, it is every 8 minutes after the opening of a franchise, the success rate of 95%, compared with other modes of operation several times higher. In Japan, Singapore and other Asian countries, the development momentum of franchising is also very strong. China's franchise development, although the time is not long, but the speed of development. Its development status and characteristics are:
1. Rapid development, the scale has expanded, has become a growth point in the development of the national economy. According to the statistics of the Domestic Trade Bureau, as of the end of 1999, the total number of chain enterprises in the domestic trade system has reached more than 1,800, 26,000 chain stores, business turnover of 150 billion yuan, has accounted for the total retail sales of consumer goods of about 5%. And according to the Ministry of statistics franchise in the mainstream chain management business in the supermarket, convenience stores, in 1997 sales of S000 million more than 95 franchise enterprises, an increase of 1.6 times over the previous year, 755 outlets, an increase of 3.7 times over the previous year. Franchise enterprises accounted for the total number of chain enterprises increased to 36%. According to this calculation, there are more than 600 franchised enterprises in various industries in the country, and there are about 5,000 outlets, with an annual business turnover of about 50 billion yuan. Chain management sales realized in recent years to more than 40% annual growth rate, greatly exceeding the national consumer goods growth rate of about 10%, about thirty percentage points.
2. Franchise chain management to multi-format, multi-industry expansion. From the mode of view, to supermarkets, convenience stores, the development of specialty stores, boutiques, warehouses type shopping malls, from the industry, from the zero set of industry to catering, the expansion of the means of production, from the tangible goods business to the expansion of the service business, almost covering the commercial, service industry and other industries. For example, Beijing Quanjude roast duck store existing 60 franchise and outlets. At present, China's domestic franchise industry has been to the books, washing and dyeing, punching and expanding, automobile leasing, maintenance, housekeeping services, fitness and entertainment, hair and beauty and other areas of development.
3. New advanced management technology, promotional strategies, business practices are widely used by franchising. Franchising breaks the traditional way of doing business and business, agriculture and commerce, wholesale and retail relations, in line with the "*** to learn a technology, *** to do a product, *** to enjoy a brand, *** to get a lot of profit" so that its mode of operation has undergone a fundamental change, in particular a number of brand stores, manufacturers as a leader, and the combination of agents, the use of franchising, has been in the country, and has been the first time in the country. The use of franchising, in the country has formed a chain network, such as Shanghai Santana, FAW-Volkswagen, Li Ning sporting goods, Ordos cashmere sweater, Shenzhen Sea Industry, Beijing Hundred Flowers Shoes, etc., and at the same time, the development of related industries. It has also led to the development of related industries.
4. Franchising has become the main means of business expansion. Many chain companies in the city market is relatively saturated, through franchising began to extend from the city to the surrounding areas, in the Yangtze River Delta, Pearl River Delta, Jiaodong Peninsula and other more developed areas, some chain companies have more than half of the stores opened in the county level below the township, such as the Shanghai Lianhua Supermarket, Shanghai Hualian Supermarket, Dongguan, Guangdong, Meijia Supermarket, Shandong Jikelong, etc.. The vast majority of these enterprises through franchising, the use of their goodwill, business technology and commodity procurement advantages to expand to the surrounding areas. Such as Jiangsu Rudong has a, was a loss-making shopping mall, joined the Hualian supermarket sales reached 500,000 to 600,000 yuan, more than 20,000 yuan of profit per month, the staff's wages from the original 200-300 yuan, increased to 800-1,000 yuan, joining the staff's motivation to improve significantly.
5. Franchising from a single state-owned economy, to the diversified development of the main business. In the composition of ownership, state-owned distribution enterprises is the main chain, collective, private, joint-stock, foreign capital and other assets of the main body of the chain of enterprises in the accelerated pace of development, the formation of a state-owned commercial enterprises, collective, private, foreign-funded enterprises *** with the participation of the diversified pattern. In the 93 enterprises, limited companies accounted for 49%, wholly state-owned accounted for 41%, the formation of domestic and foreign enterprises in the field of chain business cooperation, competition **** the existence of the market pattern.
6. Government promotion, policy support for franchising has played a role in promoting and protecting the levy. Government forces to promote, is a feature of the development of chain, but also for the rapid development of chain business mode provides a large environment.
1. Franchise chain business scale. Chain business mode of vitality, is to improve the organization and scale of enterprises to reduce costs and expand market share. Over the past few years the number of China's chain enterprises expansion rate is not slow, but the development of each chain enterprise stores is very uneven, many chain enterprise store size is not up to the internationally recognized profit and loss point of the chain enterprise (more than 14). Now China's chain operation of small scale, the national average of a chain enterprise has only 14 stores, many chain enterprises only three or four stores. Some information shows that Hong Kong has a population of five or six million, only four or five supermarket chain companies to control the chain of more than 1,000 outlets, the average number of stores owned by each company more than 200. The domestic situation is not so, to Guangzhou, for example, the city's 25 chain companies, the average number of stores people 6. According to statistics, the current national sales of more than 100 million yuan of the proportion of the total number of chain enterprises is less than 5%, the formation of the chain of companies to open their own stores, each family is difficult to develop more stores, chain stores everywhere but difficult to form a situation that should be the size of the situation.
2. Franchise chain management standardization issues. At present, China's chain operation is not standardized phenomenon prevails, mainly manifested in three aspects: First, the development is not standardized. In recent years, in the policy concessions, media hype and other inducements, there is a rush. The development of chain management is required to have certain objective conditions. Second, the operation is not standardized. Chain enterprise network development, market positioning, scope of business must be based on the principle of minimizing risk and maximizing benefits to determine the current network layout is unreasonable, market positioning over the same phenomenon. Third, the management is not standardized. According to international practice, the chain of unified distribution rate to reach more than 80%, while most of China's chain enterprises unified procurement, unified distribution ratio of only 30% -60%. In many chain stores in the surface chain and the essence is still a single store operation, each in their own way. Some stores just unified store name, clothing, logo, and the core of the chain: unified procurement and distribution has not been completed, unified accounting, unified management can not be talked about.
3. The impact of the internationalization of franchising on China. In China's chain management has just grown, some of the international super chain enterprises have entered China, the use of joint ventures, cooperation. Output management and other forms of occupation of China's market, constituting the competitive pressure of China's chain management. Such as the world's restaurant giants McDonald's, KFC, Pizza Hut and so on have entered, its chain stores throughout the country's large and medium-sized cities, to June 1996, the three major restaurant giants in China to open stores were: KFC up to 100. McDonald's 62, Pizza Hut 27. At the same time, the international business chains have also come to the beach, the United States of America's Wal-Mart, Kmart, France's Carrefour, Paris Spring, Japan's JUSCO, Daiei, Seibu, the Netherlands, Wankelong, Germany's Metro, and so on, are being penetrated into the Chinese market. China's imminent accession to the WTO, the internationalization of this chain competition will become increasingly clear.
4. Franchise chain development speed and efficiency issues. With the development of chain management, some of the more mature chain enterprises, especially in the catering industry and fashion stores to speed up the development of professional stores, Beijing "Quanjude" Roast Duck Shop, Tianjin "dog" bun store, Beijing "Pierre Cardin Beijing "Quanjude" Roast Duck Restaurant, Tianjin "Goului" Baozi Restaurant, Beijing "Pierre Cardin" Fashion Company, etc., have adopted the franchising mode, and some large-scale retail enterprises have also adopted the franchising mode to develop outlets in the process of development in order to expand their scale. However, the expansion of the scale of chain enterprises should be based on the premise of the expansion of efficiency, is through the scale of large and reduce the unit cost, thereby increasing the economic model of income. Therefore, the enterprise's store sales number is not completely equal to the benefits, if the phenomenon of expansion with the scale of the decline in efficiency is the scale of the uneconomical, and even losses, closure, such as the closure of the Red Apple in Beijing, in addition to the management of the reasons, mainly not according to their own economic strength, blindly put forward the development of a short period of time in a chain of 100 stores, which ultimately led to a lack of funds, can not pay the supplier's payments and closed down. Payment of suppliers and closed down.
5. Brand, trade name, business technology. Brand, trade name, business technology is the core of the franchise and the soul, there is no a well-known brand, there is no a reputable trade name, there is no a strong management system and business technology, can not do a good job of franchising. Recently, when the media reminded people not to fall into the trap, they revealed that some unscrupulous businessmen, under the signboard of franchising, had carried out money-cheating activities without any brand name or business technology at all. This is something we should be wary of.
6. Institutional and legislative issues for the further development of franchising. Institutional constraints are: First, the system of compartmentalization, restricting the scale of development of franchising. This not only results in vicious competition in the same area, but also fails to achieve economies of scale. Secondly, enterprises lack the expansion drive for development. The current enterprise system and operating mechanism, binding the enterprise self-development of the intrinsic motivation. Third, the logistics environment is difficult to ensure that the chain stores unified distribution technology to be. At the same time to establish and improve the franchise laws and regulations, to create a good legal environment, is to ensure the healthy development of franchising prerequisites.
Although China's development of franchising, a late start, there are some constraints and unfavorable conditions. But its development prospects are promising, has shown a trend of rapid growth, development is favorable conditions. Mainly in: First, the domestic chain is to direct chain start, direct chain practice, for the franchise chain provides valuable experience; Second, the private economy has become the most active component of our economy. State-owned commercial capital will be gradually withdrawn from the commercial and service industries, which provides a broad space for individual and private investment; four is the service consumption has become a new hot spot, the service market presents huge consumption potential, which is a huge market for the development of franchising; five has the encouragement of the state, from the policy, legal support. From the development of the international chain industry, when the direct chain store development to a certain scale, the formation of its own brand and molding management software, generally turned to franchise-based expansion of the market. In modern social conditions, franchising is a way to absorb social capital in a wider range and realize low-cost expansion of business scale, especially for small and medium-sized enterprises to develop more attractive. Therefore, franchising is bound to become the most growth potential of the chain business form.
1. Franchising has become China's expanding domestic demand, open up markets for economic growth. Nesbitt called the franchise "the most important form of business operations in the twenty-first century". The development of chain management has a lot of space and market potential, the development prospects are broad. Chain of countries around the world has accounted for 40-50% of the turnover of the total retail sales of consumer goods, while only 2% in China, only 12% on the teachings, at present, franchising to promote China's chain of supermarkets and long-established catering chain enterprises to play a positive role in promoting the development of franchising is fully popularized in other areas such as automobile sales, dry cleaning, Medicine and health care, housekeeping services, beauty salon and other service industries have also emerged a number of use of franchising to obtain extraordinary development of franchising enterprises. Such as Lanzhou Malan Ramen fast food limited liability company's "Malan Ramen Ten Thousand Chain Project", plans to use less than 10 years, the establishment of 20,000 franchise Malan chain stores. After nearly a year of efforts. "Malan Ramen Ten Thousand Chain Project" has begun to bear fruit, the company has been in Beijing, Shanghai and other places to establish more than 50 directly-managed stores. In the country to establish a franchise more than 9,300, the store is operating well, the economic benefits are significant.
2. Franchise will be the main content of the development of chain management. The form of chain management is usually divided into direct chain, voluntary chain, franchise chain, generally speaking, the franchise chain to be superior to the other two forms of chain, so it is easier for enterprises in the development of the use. According to incomplete statistics, the development of franchising business time is relatively short, of which 46% of the franchised enterprises only need a year to start operating franchising, 60% of the enterprises need 1 2 months to operate, limited to a short period of time of 15 days, the longest time of 180 days can also operate. In short, franchising has concentrated both the direct chain (regular chain) headquarters has a strong control and free chain with independent capital, business talent and business enthusiasm, but also to the contractual way, to the franchisee to sell the success of the brand and a set of business skills, to ensure that the franchisee is afraid of monopoly in a certain area of the right to use, therefore, many companies have developed to a certain size, are turning to franchising! The operation of the strip. Founded in 1990, such as Rongchang Laundry is engaged in clothing cleaning, maintenance and equipment, chemical material sales chain, only in Beijing there are 25 chain stores. In order to seek greater development, made the choice to carry out franchising, the plan is within two years in Beijing will be Rongchang washing and dyeing chain stores to 100, in the country to 1,000.
3. The vast rural areas are the space for the development of the franchise chain. To open up the market, the focus is to open up the rural market. From the market space, the vast rural market chain management is still basically blank, which provides a wide space for the development of chain management. With the development of chain operation, some enterprises have extended their retail and service network from the central city to small and medium-sized cities, and to the county towns and economically developed areas, which will be the focus of the development of retail operation for some time in the future. The expansion of chain enterprises to the neighboring areas, especially the rural market, has purified the rural market, satisfied the needs of the vast number of consumers in rural areas, driven the development of the local retail industry, and found a new growth point for the enterprises. For example, 31 of the 38 stores of Guangdong Dongmei Jia supermarket are opened in rural areas, and more than 84% of the sales in the first half of 1998 came from stores in townships. Practice has proved that franchising in rural areas have broad prospects for development.
4. The scientific and technological content of franchising will be further improved. With the development of chain management, the future of China's chain enterprises will move to a new level of technological innovation, while the social scope of the matching will put forward higher requirements. Electronic computers, network technology, bar codes, refrigeration technology, e-commerce, logistics and distribution and other modern technology are chain management further development of technical support.
5. Franchise chain will further accelerate the opening up. After China's participation in the WTO, the commitment to liberalize the franchise, no longer restrictive. This is not only for foreign franchise enterprises directly into the domestic market provides the conditions, but also for China's franchise enterprises to enter the international market, provides an opportunity. Accelerate China's franchise and international market convergence, for the development of franchise management model with Chinese characteristics, laid a good foundation, but also for the development of China's franchise has brought new opportunities.