World Business Report: After more than ten years of development, the franchise market and potential in China have attracted worldwide attention! Chinese and foreign franchising enterprises have made positive contributions to the modernization of China's economy, especially the circulation industry and service industry, and franchising is playing an increasingly important role in China's economy. The franchising in China is described from five aspects as follows:

The present situation of franchising in China

1. Franchising in China is developing rapidly, and its influence on China's economy is increasing day by day. According to the data released by China Chain Store & Franchise Association in March 2116, the number of franchised enterprises in China has become the first in the world, and a large number of new franchised enterprises are still being produced every day.

in p>2115, the number of franchise systems in China reached 2,321, with 1.68 million franchise stores, up by 11.4% and 41% respectively over the previous year. From the figure, we can see that from 2111 to the end of 2115, franchising in China showed a steady and rapid development trend. (See Figure 1)

Figure 1: The franchise chain system in China grew steadily from 2111 to 2115. Franchised enterprises owned 72 stores on average, five times that of the end of last century, and achieved sales of 421 billion yuan, more than eight times that of the end of last century. In 2115, the sales scale of "Top 111 Chain Stores" in China reached 717.6 billion yuan, accounting for 11.5% of the total retail sales of social consumer goods, while it only accounted for 4.3% in 2111 (note: most chain enterprises in China adopted franchise mode).

It can be seen that while the scale of franchising enterprises is growing rapidly, the impact of franchising on China's economy is also growing.

2. The franchised industries in China have covered all conventional franchised industries. According to the classification of franchising industries recommended by the European Franchise Union (EFC) to the World Franchise Federation (WFC), except for some professional service industries, franchising in China has covered all the 13 categories of this classification at present, only in human resources services, headhunting companies, finance, taxation, insurance, accounting, auditing, advertising and other aspects in the category of "office and business supply and service". Analysis of the reasons is mainly influenced by social system, consumption habits, market maturity and other factors. Of course, China also has some unique industries and formats, such as foot massage and rural chain stores.

3. China has become the largest international franchise market. With the saturation of the franchise market in developed countries, the vigorous development of China's economy and the comprehensive opening of China's franchise market, almost all international first-line franchise enterprises have set up their camps in China, and a considerable number of international second-and third-line franchise brands are actively entering the China market. In 2114, the import value of exclusive rights royalties and user fees in China was US$ 4.49 billion. China is becoming an important importer of international franchise brands.

According to the survey of China Chain Store & Franchise Association, among the overseas franchise brands entering China, the franchise brands from the United States account for nearly 51%. According to the statistics of "Top 211 Franchise Brands in the United States in 2114" published by Franchise Times magazine, more than 61 American franchise brands have entered the China market. In 2114, 14 of the top 21 licensed brands in the United States entered China, and Singaporean brands also accounted for a large proportion in China, while Korean, German, French, British and Italian brands were equally divided in China.

in addition, there is another remarkable feature, that is, among overseas franchise brands, catering brands account for half of the country. For example, among the top 21 licensed brands in the United States, 14 brands entered China, and catering brands accounted for 7.

4. China government and industry organization-China Chain Store & Franchise Association have successfully led and promoted the development of franchising in China. Franchising has been strongly supported by the Party and state leaders of China since it landed in China in the 1991s. Premier the State Council, deputy prime ministers, government ministers and local government departments have given firm support to the development of franchising in China. Since its establishment in 1997, China Chain Store & Franchise Association, an industry organization of franchising in China, has effectively led and promoted the development of franchising in China. Such as: participating in the legislation related to franchising, being entrusted by the government to draft and formulate national industry standards, coordinating policies, industry research and information services; Hold two large-scale franchise seminars and exhibitions in Beijing in April and Shanghai in August every year, and organize overseas franchise brand project promotion and exhibition activities; Release the annual "Blue Book of Franchise in China" and "China Chain Management Yearbook"; Hold franchise related training, etc.

5. There is still a long way to go before China franchising can reach the level of Europe, America, Singapore and Japan, and there is a lot of work to be done. Generally speaking, there are many gaps in the management concept, brand building, management system building, maturity of management team, implementation and control level of chain operation standards and norms among China franchised enterprises, and there are also great differences among them.

In short, China franchise lacks rules and management while developing at a high speed. Franchised enterprises have not become stronger while expanding. They lack efficiency and quality while pursuing quantity. While taking advantage of franchising, they still lack the exploration of core values of franchising, innovative thinking and research on business model. They lack a scientific attitude and a rigorous, pragmatic and down-to-earth entrepreneurial spirit on the basis of franchising. Speculation and impetuous mentality are more common, and some people even drill into the law.

6. Brief introduction of China franchise market survey. In September, 2115, China Chain Store & Franchise Association conducted a survey on the professional visitors who participated in the Shanghai International Franchise Exhibition. The results showed that:

(1) There were more investors who planned to invest 1-511,111 yuan, nearly 51%, and nearly 31% of the investors who invested more than 511,111 yuan; Institutional investors accounted for 19.4%, with an investment of more than 1 million accounting for 19%, and 42.4% chose to join in the region; Investors aged 31 to 41 accounted for 52.5%.

(2) The industries that investors are most interested in are Chinese and western fast food, sports and fitness, automobile aftermarket service, education, household items and so on.

(3) The franchise industry that people in the industry are optimistic about.

According to the survey report on new business opportunities and trends of franchising in China in 2116, the franchised industries that people in the industry are optimistic about are:

(4) The most concerned issues of franchised enterprises in China.

At the beginning of p>2116, the annual survey of franchising in China showed that the top five issues that franchisees were most concerned about were:

(5) the issues that franchisees in China were most concerned about.

At the beginning of p>2116, the annual survey of franchising in China showed that franchisees were most concerned about operating efficiency, that is, return on investment, followed by brand maintenance and brand promotion, followed by management support and manual applicability, and supervision training.

What franchisees want the headquarters to improve most is to provide more business know-how and treat all franchisees equally. Franchisees are most interested in training and technical exchanges at headquarters.

the position of franchising in China's economy

1. Franchising is an important means for China to establish an innovative country and implement the brand China strategy. As we all know, building an innovative country and developing independent brands has become the national policy of China, and the core of franchising is innovation, knowledge management and brand management. The greatest value of franchising is that it can build a platform of knowledge management and brand management for both franchisees. Therefore, franchising will play an important role in promoting China to build an innovative country and implement the brand China strategy.

2. Franchising is an important part of the modernization of circulation industry in China. Franchising is a modern business model that is recognized, mature and successful so far, and conforms to the modern business philosophy, modern market demand and consumer demand. Just as enterprises in the industrial age want to adopt industrialized production methods, enterprises in the information age want to use computers, franchising has become an important part of China's modernization of circulation industry, and the China government and commercial authorities have taken franchising as an important task of circulation modernization.

3. Franchising is an important way to encourage social forces to start businesses and obtain employment. In China, a country with a huge demand for entrepreneurship and employment, it is of great social significance and value to encourage members of society to use franchising to make small businesses into big businesses, or join a franchise brand, find a career and livelihood, and actively start businesses and employment.

According to the sampling survey of China Chain Store & Franchise Association in 2115, the current operating scale of China franchise stores is: about 21 employees in a single store, with an investment of about 511,111 yuan and annual sales of about 2.5 million yuan. According to this calculation, 168,111 franchise stores in China have created 3.36 million jobs, boosted investment by 84 billion yuan and realized sales of 421 billion yuan.

4. Franchising has improved the commercial civilization of China. The premise of franchising is to make everything standard, meticulous, in place and successful. The vigorous development of franchising in China means that there are more and more enterprises with unique technology, unique service and unique successful experience. The development of franchising in China has improved and promoted the overall development level of China's economy, especially the commercial economy, and promoted the commercial civilization of China.

China franchise prospect

1. China will be the most active international franchise market in the world. According to the data of the National Bureau of Statistics, the annual growth rate of China's GDP remained above 9.5% from 2113 to 2114, reaching 9.9% in 2115 and 11.9% in the first half of 2116. Due to the rapid development of China's economy, active market and huge capacity, and the comprehensive opening of China's franchise market, China's franchise is in a vigorous growth period, and there are many opportunities to create and franchise development. Franchising will also become an important way for many international brands to enter China. In the next few years, China will remain the most active international franchise market in the world.

2. China is expected to become an ideal market for the establishment of franchise development. First of all, with the concerted efforts, mutual promotion and reference of Chinese and foreign franchise enterprises, China's outstanding franchise enterprises are gradually maturing in brand management and management; Second, with the gradual popularization of the concept of franchising, the investors of franchising in China are also maturing; Third, the overall level of franchising in China is rapidly in line with international standards; Fourthly, the system of franchise laws and regulations in China is constantly being established and improved. Fifthly, franchising in China has a positive policy environment. According to "Several Opinions of the State Council on Promoting the Development of Circulation Industry" issued in June 2115, and the development goal of business service industry put forward by the "Service Industry Work Conference" organized by China Ministry of Commerce in August 2115, by 2111, the retail sales of catering industry in China will reach 2 trillion yuan, with an average annual growth rate of 1.7%; The retail sales of accommodation industry will reach 511 billion yuan, with an average annual growth rate of 11%; The operating income of the beauty and hairdressing industry will reach 611 billion yuan, with an annual increase of 1.7%. Among the above industries, franchising is becoming an important way of enterprise expansion, and will play an important role in the process of achieving the above objectives, and China franchising enterprises will usher in greater development opportunities. In addition, China's "Blue Book of Private Economy in 2116" released by the All-China Federation of Industry and Commerce in China on September 21th, 2116 shows that during the 11th Five-Year Plan period in China, the proportion of private economy in China's economy will reach 71%, and at present, the jobs provided by China's private economy have accounted for more than 81% of the whole society. Therefore, we believe that investors in China will break through the original pattern of state-owned or large-scale enterprises, and gradually transition to state-owned enterprises, listed companies, private enterprises, individual investments, and overseas students, which will have an important impact on investment in the franchise field. Therefore, despite many problems and difficulties, we still have reason to believe that China is hopeful to become an ideal market for founding and franchise development.

3. The next 5-11 years will be a historic reshuffle stage, and franchised enterprises without foundation will be eliminated. Franchising in China has been very international in the development process of more than ten years. Chinese and foreign franchise brands compete on the same stage, which is a series of hard work that franchise enterprises must practice, such as brand strength, financial strength, management, support, service and control of chain system. Fundamentally speaking, franchise management is a systematic project, and there is no shortcut. In the next 5 ~ 11 years, franchise brands in various fields in China will enter a historic reshuffle stage, and franchise enterprises without foundation will be eliminated. If we try to take advantage of some advantages and characteristics of franchising, the possibility of winning by luck is getting smaller and smaller. For the franchised enterprises in China, the most important thing is how to comprehensively and rapidly improve the brand management level and franchise management level. Similarly, international franchise brands must take the China market seriously before they can gain a firm foothold.

4. The market prospect and capacity of franchising in second-and third-tier cities, urban-rural fringe and rural areas in China cannot be ignored. With the marginalization of urban and rural areas and the vigorous promotion of China government's new rural construction, franchising has good development potential in China's vast urban-rural fringe and rural market, and will become the focus of market development of many franchised enterprises. Franchise enterprises that entered China early, such as KFC, have turned their targets to second and third tier cities in China.

5. Some time-honored enterprises in China will gradually emerge and become franchise brands with China characteristics. Franchising has penetrated into all aspects of people's economic life in China. As a famous historical brand in China, some China time-honored enterprises with modern management ideas and leading position in the industry will become franchise brands with stable and excellent quality and traditional cultural characteristics in China.

6. The frequency of investment M&A in China franchise market will accelerate. With the intensification of competition in China's franchise market, Chinese and foreign franchise enterprises with relatively mature development and certain strength will quickly enter new markets or control industry markets through mergers and acquisitions in order to occupy the commanding heights of brands, rapidly expand their scale and improve their competitiveness; In addition, merger and reorganization will also become an important way for international franchise brands to enter China.

modes for international franchised enterprises to enter China market

(I) Main modes for international franchised enterprises to enter China market

There are three main modes for international franchised enterprises to enter China market: cross-border delivery, joint venture and sole proprietorship.

before the end of p>2114, in order to avoid the policy restrictions of China government on foreign investment in China commercial enterprises, international franchise brands mainly entered China through cross-border delivery or joint ventures. According to the survey conducted by China Chain Store & Franchise Association on overseas franchise brands entering China in 2115, before the end of 2114, among the 13 American franchise brands in the TOP21 that entered China, 7 brands adopted cross-border delivery mode and 6 brands adopted joint venture mode. On February 11, 2114, after the three-year transition period of China's accession to the WTO, China