Ccfa 10 20 Milano
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Transcript of Ccfa 10 20 Milano
中国连锁经营协会China Chain Store & Franchise Association
Franchising Operation in Franchising Operation in ChinaChina
By Guo Geping, Chairperson of CCFA
October 20, 2006. Milan, Italy
中国连锁经营协会 China Chain Store & Franchise Association
Environment of Franchising in China
Introduction of CCFA
Status of Franchising in China
Category
Trends of Franchising in China
Tips for Foreign Franchise Brands into China
中国连锁经营协会 China Chain Store & Franchise Association
Environment of Franchising in China
Introduction of CCFA
Status of Franchising in China
Category
Trends of Franchising in China
Tips for Foreign Franchise Brands into China
中国连锁经营协会 China Chain Store & Franchise Association
Established since 1997;
The only official representative of China’s retailing industry & franchise field.
Membership of Over 1100 , including domestic & FIEs retailers, franchisors, suppliers; Franchisors cover 50% (up to now).
Introduction of CCFA
中国连锁经营协会 China Chain Store & Franchise Association
Environment of Franchising in China
Introduction of CCFA
Status of Franchising in China
Category
Trends of Franchising in China
Tips for Foreign Franchise Brands into China
中国连锁经营协会 China Chain Store & Franchise Association
GDP growth: by 9.5% between 2003 to 2005;
by 10.9% for the first half of this year;
Retailing sales growth: by 13.3% in 2005.
Economic Figures
Environment of Franchising in China
中国连锁经营协会 China Chain Store & Franchise Association
Laws & Regulations
a. Franchisor shall have at least two directly-run stores within China that have been operated for at least one year , or directly run stores set up by its subsidiaries or companies in which it has a controlling share ;
b. Foreign-invested enterprises shall not engage in the types of business prohibited under the Foreign Investment Industrial Guidance Catalogue in the form of franchising.
c. Foreign-invested enterprises engaging in commercial activities in the form of franchising shall apply to the original examination and approval authority for addition of “engagement in commercial activities in the form of franchising” to the scope of business .
d. Information Disclosure
Measures for the Administration of Commercial Franchise Operations released by the Ministry of Commerce, China, in Dec 2004
Environment of Franchising in China
中国连锁经营协会 China Chain Store & Franchise Association
Laws & Regulations
a. Contract Law ;
b. Corporation Law;
c. Labour Law;
d. Anti Unfair Competition Law;
……
Character: The government departments have been expedited the franchise legislation and built the harmonious and healthy market order.
Relevant Laws:
Environment of Franchising in China
中国连锁经营协会 China Chain Store & Franchise Association
Policy
Aiming to: Promote the Development of
Retailing/Restaurant/Services Industry
Sales Goals (by 2010)
a. Restaurants: USD 250 billion ;
b. Hotel & Lodging: USD 62.5 billion;
c. Beauty & Haring: USD 75 billion
Environment of Franchising in China
中国连锁经营协会 China Chain Store & Franchise Association
Environment of Franchising in China
Introduction of CCFA
Status of Franchising in China
Category
Trends of Franchising in China
Tips for Foreign Franchise Brands into China
中国连锁经营协会 China Chain Store & Franchise Association
0
1000
2000
3000
Number ofFranchi si ng Systems
410 600 1200 1900 2100 2320
2000 2001 2002 2003 2004 2005
Franchise systems in China increasing rapidly and steadily
Status of Franchising in China
Source: Year Surveys By CCFA
中国连锁经营协会 China Chain Store & Franchise Association
Contributions
Jobs 3,360,000
Investment ( Billion US$ )
10.5
Sales ( Billion US$ ) 52.5
Economic Contributions From Franchising in China, 2005
Status of Franchising in China
Source: 2005 Year Survey By CCFA
中国连锁经营协会 China Chain Store & Franchise Association
Sectors Sub-Sectors Existence in China
1.Food Retail General: Super & Hyper markets/CVs
Y
Specialized Food Stores Y
2.Restaurants/Fast Foods/Cafes/Bars/Pubs Y
3.Hotel/Motels Y
Franchise Sectors (suggested by EFF)
Status of Franchising in China
中国连锁经营协会 China Chain Store & Franchise Association
4.Clothings/Personal Equipment Y
5.Home/Garden Furnishings/Fittings/Maintenance
Textiles & Furniture Y
Fittings & Equipment N
Maintenance/Repairs/Cleaning Y
Sanitation & Pets Control N
DIY Stores Y
Second hand furnishings & equipment
N
Status of Franchising in China
中国连锁经营协会 China Chain Store & Franchise Association
6.Other Property Services (Domestic & Professional) Y
7.Transport & Vehicle Products & Services
Servicing & Sale of accessories Y
Car and Truck rentals/Driver hire Y
other Y
Status of Franchising in China
中国连锁经营协会 China Chain Store & Franchise Association
8.Office/Business Supplies & Services
Fittings/Equipment/Security/Maintenance/Cleaning Y
Parcel/Courier Y
Offices Supplies/Printing/Copying Y
Computer/ITC/Phone & Mobile Sales & Services Y
Advertising/Publicity/Graphic Design Y
Human Resource Services: Employment/Executive Search/Management
N
Finance/Tax/Insurance/Audit/Accountancy/Paralegal N
9.Training & Education Y
10.Personal Care/Beauty/Fitness/Medical/Pharmaceutical
Beauty Products & Services Y
Fitness Y
Medics & Pharmaceuticals Y
Care Services: elderly, children N
Status of Franchising in China
中国连锁经营协会 China Chain Store & Franchise Association
11.Travel/Sports/Leisure (Not sportswear)
Travel Agencies Y
Sports Clubs Y
Recreation Centers & Equipment Y
Matrimonial/Dating Agencies N
12.Pets/animals Y
13.Other Specialized Retail Stores Y
14.Other Y
Status of Franchising in China
中国连锁经营协会 China Chain Store & Franchise Association
Status of Franchising in China
24%
25%
28%
57%
62%
0% 10% 20% 30% 40% 50% 60% 70%
Legi sl at i on &Pol i cy
Product & Servi ce
Franchi sees'Behavi or
Standardi zat i on
St rategy
Franchisors’ Top 5 Focuses 2006
Source: Blue Book of 2006 Franchising in China
中国连锁经营协会 China Chain Store & Franchise Association
Status of Franchising in China
89%
90%
95%
96%
100%
80% 85% 90% 95% 100% 105%
Trai ni ng & Di recti ng
Manual
Operati on Support
Promoti on & Ad
ROI
Franchisees’ Top 5 Focuses 2006
Source: Blue Book of 2006 Franchising in China
中国连锁经营协会 China Chain Store & Franchise Association
Status of Franchising in China
< 100 Thousand23.1%
100-250 Thousand29.9%
250-500 Thousand18.5%
500-1000 Thousand15.6%
1000-2000 Thousand8.4%
> 2000 Thousand4.5%
Investment Capability of Potential Franchisees 2005
Source: Blue Book of 2005 Franchising in China
中国连锁经营协会 China Chain Store & Franchise Association
Environment of Franchising in China
Introduction of CCFA
Status of Franchising in China
Category
Trends of Franchising in China
Tips for Foreign Franchise Brands into China
中国连锁经营协会 China Chain Store & Franchise Association
78%78%78%78%
88%100%
0% 20% 40% 60% 80% 100% 120%
Fast Food
Af ter Auto Market Servi ce
Express & Package Del i very
Economi c Hotel
Physi cal Trai ni ng Gym
Home Appl i ances
Trends of Franchising in China
Experts Consensus: Top 6 Potential Sectors
Source: Repot on Trends of Franchising in China, 2005 by CCFA
中国连锁经营协会 China Chain Store & Franchise Association
Industry/Sector Ratio
Chinese Fast Food 23.00%
Western Fast Food 13.00%
Gift Specialty 12.00%
Physical Training Gym 11.00%
Home Appliances 10.00%
Leisure Beverage 10.00%
After Auto Market Service 9.00%
Training & Education 9.00%
Others 3.00%
Prospective Franchisees’ Hottest Choices
Trends of Franchising in China
Source: 2005 Prospective Franchisee’ Survey by CCFA
中国连锁经营协会 China Chain Store & Franchise Association
Environment of Franchising in China
Introduction of CCFA
Status of Franchising in China
Category
Trends of Franchising in China
Tips for Foreign Franchise Brands into China
中国连锁经营协会 China Chain Store & Franchise Association
Tips for Foreign Franchise Brands into China
Localization due to Different Cultures
Difference of Franchising Operation in Different Countries
Design of Business Model
Focus on Products & Services Safety
中国连锁经营协会 China Chain Store & Franchise Association
14 of Top 20 USA Franchising Brandings in China
10
32
1 1 1 1 1
7
32
1 10 0 0
0
2
4
6
8
10
TOP2014 i n Chi na
TOP20 10 3 2 1 1 1 1 1
14 i n Chi na 7 3 2 1 1 0 0 0
F&B餐饮 Hotel 酒店 Real CVS便利店 Envi romen Travel 旅 R&V音像 Ect
Tips for Foreign Franchise Brands
into China
Source: Repot on Status of Foreign Franchise Brands Development in China, 2005 by CCFA
中国连锁经营协会 China Chain Store & Franchise Association
Tips for Foreign Franchise Brands
into China
37%
33%
13%9% 8%
GovernmentRel at i onshi pI ndust ryBackgroundCurrentPerf ormanceManagementSki l l sCapi talAbi l i ty
Franchisee’ Most Valued Capabilities By Foreign Franchisers
Source: Repot on Status of Foreign Franchise Brands Development in China, 2005 by CCFA
中国连锁经营协会 China Chain Store & Franchise Association
Tips for Foreign Franchise Brands
into China
5%
76%
11% 7%
Fi xed Fee
Propoti on ofSal es
Propoti on ofProfi t
Propoti on ofDi stri buti onSal es
Source: Repot on Status of Foreign Franchise Brands Development in China, 2005 by CCFA
中国连锁经营协会 China Chain Store & Franchise Association
Tips for Foreign Franchise Brands into China
Localization due to Difference Cultures
Difference of Franchising Operation in Different Countries
Design of Business Model
Focus on Consumable Safety and Health
中国连锁经营协会 China Chain Store & Franchise Association
Tips for Foreign Franchise Brands into China
Localization due to Difference Cultures
Difference of Franchising Operation in Different Countries
Design of Business Model
Focus on Consumable Safety and Health
中国连锁经营协会 China Chain Store & Franchise Association
What can CCFA assist you?
To provide the legal information and current states analysis on franchising;
To organize twice franchise exhibitions in each year ;
To organize the training course for the potential master franchisees;
To make the matchmaking between the foreign franchisors who are eager to access China market and the potential investors who are interested in purchase the franchising right for region or nation in China mainland.
中国连锁经营协会 China Chain Store & Franchise Association
Main Activities :
Policy & Regulation recommendation, Lobby and Coordination;
Series training programs, retail & franchise;
Survey & Data services;
Seminars, Conventions & Exhibitions etc.
What can CCFA assist you?
中国连锁经营协会 China Chain Store & Franchise Association
China Franchise ExpoChina Franchise Expo 2006 2006
中国连锁经营协会 China Chain Store & Franchise Association
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