The franchise fees for McDonald's, KFC and Dicos are 3 million yuan, 8 million yuan and 2 million yuan respectively. KFC and McDonald's entered the Chinese market in 1987 and 1990 respectively. Initially, they adopted direct sales. Chains, basically no franchise chains have been developed. Since 1999, when KFC implemented the "zero-start franchise" franchise, McDonald's has always adhered to a single direct chain model. It was not until 14 years after entering China that it began to consider the two-way development of "direct chain" and "franchised chain". Which one do they prefer? investors? Tips: McDonald's: You must be willing to devote all your time and energy to the daily operations of McDonald's restaurants, and multiple investments are not allowed; KFC: Franchisees must not only have a capital of 8 million yuan, but also have sufficient management experience; Dicos: There are a variety of store types and investment methods for different investment abilities, and we can accept some investors to do Dicos while doing their original business. At the 7th China Franchise Chain Exhibition in 2005, McDonald's received applications from 3,000 people, but only a very small part of them were able to become McDonald's franchisees. As we all know, for international fast food chain brands like McDonald's and KFC, the conditions for developing franchisees are very demanding. It is reported that almost 90% of the 20 KFC franchisees are returnees from overseas, either from the United States or Australia. They generally have high academic qualifications and rich management backgrounds. In addition, strong financial strength is also a common feature of them. The franchise plan launched by McDonald's in China is to find individuals or individuals who meet the following eight conditions: have noble ethics; have an entrepreneurial spirit and a strong desire to succeed; are outgoing and sociable; and are willing to put themselves forward. Dedicate all time and energy to the daily operation of McDonald's restaurants; The applicant is willing to undergo 12 months of training; has the ability to effectively manage and train personnel; can work competently within the franchise organization; the investment amount is not less than RMB 300 Ten thousand yuan. "In order to become a McDonald's franchisee, in addition to the franchise fee of 3 million yuan, franchisees also need to have rich management experience, be a successful manager themselves, and be a businessman who knows how to wear an apron. It's all ketchup," Zhu Yuanhe, senior vice president of McDonald's China Development Company, said vividly. KFC provides franchisees with a low-risk franchise that "does not start from scratch." Franchisees must first have a capital of 8 million yuan, but even if they have 8 million yuan, they may not be able to become a KFC franchisee. KFC requires franchisees to meet four conditions at the same time: eager for development and truly willing to personally engage in KFC business; have sufficient management experience; accept training and be willing to establish a cooperative relationship of up to 10 years; and have corresponding financial strength. Successful franchisees who meet the above criteria will be required to attend an extensive 12-week training program. In comparison, Dicos' entry barriers are much more flexible. The franchise fee of 2 million yuan basically covers most store opening expenses such as store rent and decoration costs. Moreover, there is no mandatory one-year or 10-month off-the-job training period for franchisees. Instead, the main training is The focus is on front-line practitioners, not investors themselves. Because the investment is relatively small and the operating requirements are flexible, it attracts many repeat investors. It is reported that the repeated franchise phenomenon is prominent and has become an important feature of the rapid development of Dicos. According to Deng Renrong, associate director of Dicos Development Department, as of February 20, 2005, the total number of Dicos repeat franchise stores has reached 195, accounting for half of the 423 Dicos stores. The so-called repeated franchise means that a franchisee continues to join Dicos after the opening of the first franchise store, opening more than 2 stores (including 2 stores). These franchisees have become franchisees or even subsidiaries of Dicos. What should investors pay most attention to? Tips: McDonald's and KFC: whether the training can have a good effect on you and whether it is necessary to spend nearly a year on training; Dicos: whether the location is good and whether there is stable cash flow. Some franchisees tend to blindly focus on the brand and franchise fees when choosing franchise projects, but often ignore many specific details in the franchise process.

Many of the details have become the key to success or failure. Therefore, it is necessary for the franchisee and the franchisor to understand and study each other during the selection and selection process. In this regard, no matter which project you choose, you must first like this industry and the business model of this store, then you will be willing to invest, rather than just looking for something to make money. In addition, it is necessary to compare in many aspects to understand the background of the company, its development time, and the stability of the store. Because the longer a company develops, the more stable it will be. Unlike many companies that are short-lived, it will take a few years for an average company to start making profits, so you need to be very clear about the background and strength of the company. "You must visit the corporate headquarters to understand the development of the company. In fact, you can tell whether a company's headquarters is developing well by visiting the headquarters, whether their services to franchisees are attentive, whether employees are busy, and how well they communicate with franchisees. Whether it is frequent or not, be sure to talk to people who have joined the company about the status of joining. "It is recommended that investors should not invest all their assets, leave a way out, and do not invest 100%. Any investment has risks. "So Dicos will examine the background of the franchisee. In addition to operating the store, whether there is stable cash flow to ensure its daily expenses." Experts unanimously suggest that before joining, the choice of location is the most important. Different Industries have different site selection characteristics. Site selection is the most critical. It is best to spend more time to conduct a detailed assessment of the location. After joining, people are the most important. You must find the right people and build the right team. Zhu Yuanhe, senior vice president of McDonald's China Development Company, believes that franchisees need to understand what the company can provide you, and whether there is a good training mechanism for you, and whether the training can have a good effect on you. "Then we need to understand whether the company's operating system is complete and whether franchisees need to worry about the source of daily materials. We also need to understand the company's daily promotion capabilities." Zhu Yuanhe continued. Finally, Zhu Yuanhe thought that he should study himself to see whether his personality is suitable for this company and whether he can resonate with this company. Franchisees should calculate and understand the return on investment tips: McDonald's: Generally, costs will be recovered and profits will be made within 5 years. McDonald's will buy back those with poor management. It is recommended that investors focus on the brand effect of McDonald's and make long-term investments; KFC: For franchisees There is no estimate or commitment, and it is up to the franchisees themselves to judge the reasonable payback period of the project; Dicos: With lower franchise fees and lower operating costs, the investment can be recovered in about two and a half years. Franchise fees are often the issue that franchisees are most concerned about, because the amount of franchise fees directly affects franchisees' investment choices and investment returns. At this China Franchise Chain Exhibition, the franchise fees of McDonald's, KFC, and Dicos were 3 million yuan, 8 million yuan, and 2 million yuan respectively, which were the highest among all franchise projects. Therefore, for investors, calculating the return on investment will be Helps make rational choices and reduce investment risks. Regarding the return on investment issue, the first item on Dicos’ promotional page clearly states: The annual return on investment exceeds 40%. The relevant person in charge of KFC told reporters that they do not make estimates or promises to franchisees because they choose mature franchisees who have their own evaluation and judgment of the reasonable payback period of the project. Zhu Yuanhe said that franchisees can recover their costs and make profits within five years, and McDonald's will buy back those who do not perform well. Ding Liming, deputy general manager of Shanghai Little Tail Sheep Catering Management Co., Ltd., which specializes in franchise chains, said that the five-year investment return period is long, which will exclude many investors with slightly weak financial strength. However, some professionals believe that if you have strong financial strength, it is more feasible to make long-term investments focusing on McDonald's brand effect. As an investor, it is not enough to just believe in the company's calculations and commitments. You need to use relevant data for analysis. For example, to calculate the investment returns of McDonald's and KFC, you need to understand the company's domestic operating conditions. According to 2003 data, McDonald's and KFC opened nearly 600 and 1,000 restaurants in the country respectively, and their operating income was 5.3 billion yuan and 9.3 billion yuan respectively. Based on this calculation, the average operating income of a single store is 9 million yuan respectively. yuan and 9.3 million yuan. In addition to normal operating costs, KFC franchisees must also pay a royalty fee of 6% of sales and an advertising fee of 5% of sales to the headquarters every year. Based on these data and combined with operating costs, we can roughly estimate the average annual return rate of a single store.

Compared with the high franchise fees of KFC and McDonald's, Dicos claims to have lower franchise fees and lower operating costs. Dicos claims that their investment is only between 1 million and 2 million yuan, and operating costs are strictly limited to an appropriate range. The average operating cost of a single store is 10% to 15% lower than KFC and McDonald's. According to the Dicos single store It is estimated that with an average annual turnover of 3 million to 5 million yuan, the investment can be recovered and profitable in about two and a half years. However, the obvious disadvantage of Dicos is its weak brand power, which to a certain extent will affect its ability to make stable profits

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