Franchising in China

2393 words 10 pages
FRANCHISING

China Foto Press

s of the Foreign franch ises are reaching more Chinese consumers over larger segment

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The Pros and Cons of Franchising in China
US companies must jump hurdles to operate successful franchises in China, but the potential benefits are too great to ignore.
William Edwards

40 July–September 2011 chinabusinessreview.com

FRANCHISING

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estern and local franchise brands have developed group is largely a young, upwardly mobile, and aspirational significantly in China over the past 15 years, as the two-income family demographic with one child and Chinese consumer has become an engine of considerable discretionary income. economic growth and the country’s business environment has Food service improved.
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But in establishments that are franchises, thus many US franchises recent years, US companies have also been building hotels for help fill the needs of China’s fast-growing middle class. This chinabusinessreview.com July–September 2011 41

FRANCHISING
Chinese business travelers in second- and third-tier cities. US hotel brands that grant franchises in China include Hilton Worldwide, Inc.; Howard Johnson International, Inc.; Sheraton Hotels & Resorts; and Super 8 Motels, Inc. Customer service franchises Auto, education, and real estate franchises soon followed business services franchises. As Chinese consumers started to buy cars, they began to need professional service centers for car repair and maintenance. And when home ownership boomed in China, real estate firms such as Century 21 Real Estate LLC and RE/MAX, LLC launched franchises. Helping to boost the popularity and supply of education and fitness programs for children and young adults in China, My Gym Enterprises, a US franchise focused on children’s health, entered China in 2008. The Crestcom International, LLC management education franchise, which boosts adults’ managerial skills and is especially helpful to young adults who want to improve their careers, entered a few years later. In addition, the Virginia-based Abrakadoodle Remarkable Art Education children’s art franchise is setting up in China this year and will cater to the new generation of

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