The Development of Franchising in China

Abstract

Two decades ago the term "franchising" was not part of the Chinese language. Although in per capita and GDP terms the Chine.se fratichise sector is still at an carly development stage, China is today the most franchised countiy in the world in terms of number of systems. Franchising as a method of business operation was introduced to China by the United States' fast food pioneers KFC and McDonald's in the late 1980s in an environment which was by then increasingly receptive to foreign investment and western concepts tinder Deng Xiaoping's economic reforms and open-door policies. A decade later, China's first rudimentary franchise law signaled the government's imprimatur on franchised distribution and led to its wide adoption by both public and private seetor enterprises. Regulatory reforms pursuant to China's World Trade Organization accession in 2001 have liberated franchise sector entry for foreign franchisors ¡ind facilitated cross-border franchising. This paper outlines the history and the development of franchising in China, addresses the challenges and opportunities for both domestic and international franchise companies, and discusses the future development of the Chinese franehise seetor.

Latin American franchise internationalization: The impact of institutional environment

“…In the current decade, due to growth in emerging markets, a second wave of internationalization of North American chains in these markets has been present (Aliouche & Schlentrich, ; Baena, ; Dant & Grünhagen, ;). The inverse path has also occurred; that is, franchise chains from emerging countries have sought to expand into international markets (Alon, ; Castrogiovanni & Vozikis, ; Dant, Perrigot, & Cliquet, ; Grünhagen, Dant, & Zhu, ; Grünhagen, Witte, & Pryor, ; Wang, Zhu, & Terry, ; Welsh, Alon, & Falbe, ). As a result of this late internationalization and, in particular, country of origin, the study of these chains is seen as worthy research (Dant & Grünhagen, ).…”

An Overview of Franchising Law: Why is it Important?

“…The introduction of the Franchise Regulation in 2007 is the official response to these problems. In China, as in other countries, the law plays an important role in improving the environment for franchising (Wang, Zhu, & Terry, 2008). For example, in 2002, Kazakhstan passed a franchise law which entitled "On Complex Entrepreneurial Licenses ".…”

Pioneering Asian Franchise Brands: Pho24 in Vietnam

“…Recent work exploring Asian franchising includes that of Wang, Zhu, and Terry (2008), who have written about franchising in China; Terry (2008) on Vietnam;and Paswan (2008) who has explored the growth of franchising in India. Recent work exploring Asian franchising includes that of Wang, Zhu, and Terry (2008), who have written about franchising in China; Terry (2008) on Vietnam;and Paswan (2008) who has explored the growth of franchising in India.…”