ADVICE
Your Way into China China's massive potential is large to to be ignored and attracting increasing interest from Western franchisors. China expert Bill Edwards assesses the market
WORDS BY BILL EDWARDS
hina’s middle class will KFC began granting franchises in ongoing challenge is to get the middle rise to more than a third smaller cities in 1992. McDonalds’ and upper class consumer to pay for C of its population by started franchising in 2004. ‘China senior care despite there being no 2030, with consumer Briefng’, Dezan Shira & Associates, government support for this service. spending expected to reach the January 2019. level currently seen in the European “Typically franchisors view China The role of foreign Union, according to the Economist as an alluring destination, but education franchises Intelligence Unit. make the mistake of treating it as “The growth of the middle class As Chinese consumers earn more one single market, when in reality and the high value of American discretionary income, they want the it is many. Granting one master education in China made our entry quality, brand, convenience, and franchisee for the country may be into the Chinese marketplace readily service associated with Western appealing but often fails to achieve accepted. Rainbow Station China brands. They often buy goods and the results required under the ofers middle class parents the services at stores, restaurants, and system’s development schedule”, opportunity to provide American- service establishments that are says Jason Gehrke, Director, style preschool education franchises, thus US franchises Franchise Advisory Centre, Australia. for their children. help fll the needs of China’s Australia franchisors who have Taught in English, fast-growing middle class. entered China include Boost Juice, our classes Franchising started in China in The Cofee Club Donut King, Gloria the late 1980s. In 1987, KFC’s frst Jean’s Cofees, Jamaica Blue and Ray unit opened in Beijing. As of White Real Estate. March 31, 2019, there were 4,534 Franchising opportunities also franchises ofcially registered in abound in non-F&B industries. The the Department of Commerce of best prospects include car rental China with more than 5 million and services, education, senior jobs nationwide and with 400,000 care, health and ftness. outlets in operation. Here are the USCS Country Commercial number of franchises by sector: Guide (CCG) . Tupperware has 7,000+ units, Century 21 has + Retailing: 1,470 5,300+ units, 7 Eleven has + F&B: 1,596 800+ units and Super 8 hotels + Home Service: 400 has 1,200+ units. + Education: 250 + Hotel: 101 Home and senior care + Real Estate: 110 in China + Business Services: 601 The United Nations predicts that China’s population over 60 will reach focus on In 2015, total sales of the top 100 438 million by 2050 – one out of critical thinking, franchisors in China reached a every three Chinese. According to creativity, and leadership record high of RMB 435 billion PWC, Chinese people will spend development—concepts parents (US$63 billion), according to the over US$1.5 trillion from 2016- want. We started with corporate China Chain Store & Franchise 2020 on senior care increasing 17% schools owned by our joint venture Association (CCFA). per year. U.S. Commercial Service partnership before franchising When KFC and McDonald’s 2018 statistics. In recent years both our concept and evolving into full entered China in 1980s and 1990s Right At Home and Home Instead day kindergartens.” Gail Johnson, they initially owned all their outlets. have entered the China market. An Chairwoman, Leaf Spring Schools.