Franchising In China: A Flourishing Business Model

China Briefing:

Among the permitted business activities a FICE can conduct (besides retailing, wholesaling and commission agency activities) is franchising. The nature and use of franchising – and the business circumstances that affect it – have changed dramatically over the past three decades.

Today, despite a period of disordered development in its early years due to a loose legal environment and little local knowledge of franchising, China has the largest franchise market in the world. There are an estimated 4,000 brands with over 330,000 franchised stores in over 80 sectors today.

In 2011, with the Chinese economy booming, franchising offers a low cost rapid growth model that provides easy access to the expanding consumer market and second-tier cities. Further, franchising enables faster brand recognition, drawing in consumers that see large brand name chains as being more reliable.

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