Tracing back to the history of Chinese franchise chain operations, as early as the 1920s and 1930s, industrial and commercial enterprises in old China had branches that developed in various places based on brands and trade names, such as Hengdeli, Baoyuantong, Shengxifu, Qiulin Company, etc., but at that time they were not as standardized and modern as the current franchise. But there are, to say the least, the beginnings of a franchise. It really started in the mid-1980s, when KFC and famous foreign clothing brands took the lead in entering the Chinese market in the form of franchising. Since then, franchising, chain operation, direct operation, and franchise chains have developed rapidly in China and become the mainstay of our country's economy. A bright spot for growth.

Franchising is when the franchisor grants its own trademarks (including service marks), trade names, products, patents and proprietary technologies, business models, etc. to the franchisee in the form of a franchise contract. The franchisor shall, in accordance with the provisions of the contract, engage in business activities under the franchisor's unified business model and pay corresponding fees to the franchisor. Obviously, franchising is a license of business skills and business forms. It is a grant of software technology, that is, intellectual property rights. It is not restricted by funds, geography, time, etc., and can develop multiple companies at the same time and in any situation. The consumer base develops geographically and expands rapidly with the characteristics of low cost and low risk.

Today, franchising is developing rapidly with strong momentum as a trend of globalization and internationalization of business development. In recent years, more than half of the total retail sales in the United States have been realized through franchising. Every 8 minutes, one franchise opens for business, with a success rate of 95%, which is several times higher than other business methods. In Asian countries such as Japan and Singapore, the development momentum of franchising is also very strong. Although my country's franchise development has not been long, it is developing rapidly. Its development status and characteristics are:

1. It has developed rapidly, expanded in scale, and has become a growth point in the development of the national economy. According to statistics from the Domestic Trade Bureau, by the end of 1999, the total number of chain enterprises in the domestic trade system had reached more than 1,800, with 26,000 chain stores and a turnover of 150 billion yuan, accounting for about 5% of the total retail sales of consumer goods. According to statistics from the relevant ministry, franchising is one of the mainstream chain-operated supermarkets and convenience stores. In 1997, there were 95 franchise enterprises with sales of more than S0 million, an increase of 1.6 times over the previous year, and 755 outlets, an increase over the previous year. 3.7 times. The proportion of franchised enterprises in the total number of chain enterprises increased to 36%. Based on this calculation, there are about 600 franchise enterprises in various industries across the country, with about 5,000 outlets, and an annual turnover of about 50 billion yuan. The sales achieved by chain operations have grown at a growth rate of more than 40% every year in recent years, which is significantly higher than the national growth rate of consumer goods, which is about 10%, or about 30 percentage points.

2. Franchise chain operations are expanding to multiple business formats and industries. From the perspective of business formats, supermarkets and convenience stores are the main ones, and they have developed into specialty stores, boutiques, and warehouse-style shopping malls. From the perspective of industry, they have expanded from retail industries to catering and production materials, and from tangible commodity operations to service operations. Covering commercial, service and other industries. For example, Beijing Quanjude Roast Duck Restaurant currently has 60 franchises and outlets. At present, my country's domestic franchise industry has developed into the fields of books, laundry and dyeing, printing and expansion, car rental, maintenance, housekeeping services, fitness and entertainment, hair and beauty, and other fields.

3． New advanced management techniques, promotion strategies, and business methods are widely used in franchising. Franchising breaks the traditional business model and the relationship between industry and commerce, agriculture and commerce, and wholesale and retail. It is based on the principle of "learn a technology, make a product, enjoy a brand, and gain huge profits." Fundamental changes have taken place in the mode of operation, especially for a group of brand stores, which are led by manufacturers, combined with agents, and adopt a franchise model. A chain operation network has been formed across the country, such as Shanghai Santana, FAW-Volkswagen, Li Ning Sporting Goods, Ordos cashmere sweaters, Shenzhen Haiye Industry, Beijing Baihua Shoes, etc., at the same time. It also promoted the development of related industries.

4. Franchising has become the main means of business expansion. When the urban market is relatively saturated, many chain companies have begun to extend from cities to surrounding areas through franchising. In relatively developed areas such as the Yangtze River Delta, Pearl River Delta, and Jiaodong Peninsula, some chain companies have more than half of their stores opened at the county level. The following towns and villages, such as Shanghai Lianhua Supermarket, Shanghai Hualian Supermarket, Guangdong Dongguan Meijia Supermarket, Shandong Jikelong, etc.

Most of these enterprises expand to surrounding areas through franchising, taking advantage of their goodwill, operating technology and commodity procurement advantages. For example, there is a store in Rudong, Jiangsu, which was originally a loss-making shopping mall. After joining Hualian Supermarket, its sales reached 500,000-600,000 yuan, with a monthly profit of more than 20,000 yuan. The wages of employees increased from the original 200-300 yuan. To 800-1,000 yuan, the enthusiasm of employees has increased significantly after joining.

5. Franchising has developed from a single state-owned economy to a diversified business entity. In terms of all manufacturing components, state-owned circulation enterprises are the main force in chain operations. The development speed of chain enterprises of collective, private, joint-stock, foreign-funded and other asset entities is accelerating, forming a state-owned commercial enterprise dominated by collective, private, foreign-funded enterprises** *Diversified pattern of participation. Among the 93 enterprises, 49% are limited companies and 41% are solely state-owned, forming a market pattern in which domestic and foreign enterprises cooperate and compete in the chain business field.

6. Government promotion and policy support have played a role in promoting and protecting franchise operations. Government promotion is a characteristic of chain development, and it also provides an environment for the rapid development of chain operations.

1． Franchise scale issues. The vitality of the chain operation method lies in reducing costs and expanding market share by improving the organization and scale of the enterprise. In the past few years, the number of chain enterprises in our country has been expanding at a slow pace, but the store development of each chain enterprise is very uneven. The store size of many chain enterprises has not reached the internationally recognized profit and loss point of chain enterprises (more than 14 stores). At present, the scale of chain operations in our country is small. The average chain company in the country has only 14 stores, and many chain companies only have three or four stores. Statistics show that Hong Kong has a population of five to six million, but only four or five supermarket chain companies control more than 1,000 chain outlets, with each company having an average of more than 200 stores. This is not the case in China. Taking Guangzhou as an example, there are 25 chain companies in the city, with an average number of stores of 6. According to statistics, the proportion of the total number of chain companies with sales exceeding 100 million yuan in the country is currently less than 5%. Each chain company has opened its own store. It is difficult for each company to develop more stores. Chain stores are everywhere but it is difficult to form the scale they deserve. situation.

2. The issue of standardization of franchise chain operations. At present, irregularities in chain operations are widespread in my country, mainly manifested in three aspects: First, irregular development. In recent years, induced by preferential policies and media hype, there has been a rush to the market. The development of chain operations requires certain objective conditions. The second is irregular operation. The outlet development, market positioning, and business scope of chain enterprises must be determined based on the principles of risk minimization and profit maximization. The current network layout is unreasonable and the market positioning is excessive. The third is irregular management. According to international practice, the unified distribution rate of chain operations must reach more than 80%. However, at present, the proportion of unified procurement and unified distribution of most chain enterprises in my country is only 30%-60%. Many chain stores appear to be chain stores, but in reality they are still single-store operations and operate independently. Some stores have only unified store names, clothing, and logos, but the core of the chain: unified procurement and distribution has not yet been completed, and unified accounting and unified management are out of the question.

3． The impact of franchise internationalization on my country. When my country's chain operations were just growing, some international super chain companies entered China one after another and used joint ventures and cooperation. Various forms such as export management occupy the Chinese market and constitute competitive pressure on chain operations in my country. For example, the world's catering giants McDonald's, KFC, Pizza Hut, etc. have entered one after another, and their chain stores have spread all over large and medium-sized cities across the country. By June 1996, the three major catering giants had opened 100 KFC stores in China. McDonald's has 62 and Pizza Hut has 27. At the same time, international chain stores have also rushed to the beach, including Wal-Mart and Kmart from the United States, Carrefour and Paris Printemps from France, Jiashi, Daiei, and Seibu from Japan, Makro from the Netherlands, and Metro from Germany. And so on, they are all penetrating into the Chinese market. As our country is about to join the WTO, the internationalization of competition in the chain industry will become increasingly clear.

4. Franchise chain operation development speed and efficiency issues.

With the development of chain operations, the development of some more mature chain enterprises, especially the catering industry and professional fashion stores, has accelerated. Beijing's "Quanjude" roast duck restaurant, Tianjin's "Goubuli" bun shop, Beijing's "Pierre Cardin" fashion store Companies, etc., have all adopted the franchise method. In the process of development, some large retail enterprises have also adopted the franchise method to develop branches to expand their scale. However, the expansion of chain enterprise scale should be based on the expansion of benefits. It is an economic model that reduces unit costs through large scale, thereby increasing profits. Therefore, a large number of store sales of an enterprise does not completely equate to efficiency. If the efficiency decreases with the expansion of scale, it is diseconomies of scale, and may even lead to losses or bankruptcy, such as the collapse of Red Apple in Beijing. In addition to In addition to management reasons, the main reason is that it blindly proposed to develop 100 chain stores in a short period of time without considering its own economic strength, which eventually led to insufficient funds and the inability to pay suppliers and bankruptcy.

5. Brand, trade name, and management technology issues. Brands, trade names, and operating techniques are the core and soul of franchising. Without a well-known brand, a reputable trade name, a strong management system and operating techniques, it is impossible to run a successful franchise. Recently, when the media warned people not to fall into traps, they revealed that some unscrupulous businessmen are using the guise of franchising to cheat money without having any brand or business technology. This deserves our vigilance.

6. Institutional and legislative issues for the further development of franchising. System constraints include: First, the fragmented system restricts the scale of franchise development. This not only results in vicious competition in the same area, but also fails to achieve economies of scale. Second, enterprises lack the expansion motivation for development. The current enterprise system and operating mechanism constrain the internal motivation of enterprises for self-development. Third, the logistics environment makes it difficult to ensure the technical requirements for unified distribution by chain stores. At the same time, establishing and improving laws and regulations related to franchising and creating a good legal environment are prerequisites for ensuring the healthy development of franchising.

Although the development of franchising in our country started late, there are some constraints and disadvantages. However, its development prospects are promising, it has shown a trend of rapid growth, and its development is favorable. The main manifestations are as follows: first, domestic chains started as direct-operated chains, and the practice of direct-operated chains has provided valuable experience for franchise chains; second, the private economy has become the most active component of our country's economy. State-owned commercial capital will gradually withdraw from the commerce and service industries, which provides a broad space for individual and private investment; fourth, service consumption has become a new hot spot, and the service market presents huge consumption potential, which is a huge market for franchise development; fifth There is encouragement from the state and support from policies and laws. Judging from the development of the international chain industry, when direct-operated chain stores develop to a certain scale and form their own brands and established management software, they generally turn to franchising to expand the market. Under modern social conditions, franchising is a way to absorb social capital on a larger scale and expand business scale at low cost, and is especially attractive to the development of small and medium-sized enterprises. Therefore, franchising will definitely become the chain operation form with the greatest growth potential.

1． Franchising has become an economic growth point for my country to expand domestic demand and open up markets. Naisbitt calls franchising "the most important form of business operation in the 21st century." There is a lot of space and market potential for the development of chain operations, and the development prospects are broad. The turnover of chain stores in various countries around the world has accounted for 40-50% of the total retail sales of consumer goods in society, but only 2% in my country and only 12% in Shanghai. At present, franchising plays an important role in promoting the development of supermarket chains and time-honored restaurant chain enterprises in my country. With the positive promotion effect, franchising is becoming more and more popular, and in other service industries such as car sales, dry cleaning, medicine and health care, housekeeping services, beauty salons and other service industries, a number of franchise companies have emerged that use the franchising method to achieve extraordinary development. For example, Lanzhou Malan Ramen Fast Food Co., Ltd.'s "Malan Ramen Ten Thousand Chain Project" plans to establish 20,000 franchised Malan chain stores in less than 10 years. After nearly a year of hard work. The "Malan Ramen Ten Thousand Chain Project" has achieved initial results. The company has established more than 50 directly-operated stores in Beijing, Shanghai and other places. More than 9,300 franchise stores have been established across the country. Each store is operating well and has significant economic benefits.

2. Franchising will be the main content of chain operation development.

The forms of chain operation are usually divided into direct chain, voluntary chain and franchise chain. Generally speaking, franchise chain is superior to the other two chain forms, so it is easier for enterprises to adopt when developing. According to incomplete statistics, it takes a short time to develop a franchise business. 46% of franchise companies only need one year to start franchising operations, and 60% of companies need 1 to 2 months to operate, with a short time limit of 15 days. , it can also be operated for a maximum period of 180 days. In short, franchising not only combines the strong control power of the direct chain (formal chain) headquarters and the independent capital, management ability and enthusiasm of the free chain, but also can sell successful products to franchisees through contracts. Brands and complete sets of management skills ensure franchisees have exclusive monopoly rights in a certain area. Therefore, many companies turn to franchising after they develop to a certain scale. For example, Rongchang Laundry, founded in 1990, is a chain enterprise engaged in clothing cleaning, maintenance and sales of equipment and chemical materials. There are 25 chain stores in Beijing alone. In order to seek greater development, we have made the choice of franchising. We plan to open 100 Rongchang laundry and dyeing chain stores in Beijing and 1,000 stores nationwide within two years.

3． The vast countryside is a space for the development of franchise chain operations. To develop markets, the focus is on developing rural markets. From the perspective of market space, chain operations in the vast rural market are basically blank, which provides a broad space for the development of chain operations. With the development of chain operations, some enterprises have extended their retail and service networks from central cities to small and medium-sized cities, and to county towns and market towns in economically developed areas. This is also the focus of retail operation development in the future. The expansion of chain enterprises into surrounding areas, especially rural markets, has purified the rural market, met the needs of rural consumers, promoted the development of the local retail industry, and found new growth points for enterprises. For example, 31 of the 38 stores of Guangdong Dongmeimeijia Supermarket are located in rural areas. In the first half of 1998, more than 84% of sales came from stores in towns and villages. Practice has proved that franchising has broad development prospects in rural areas.

4. The technological content of franchise chain operations will be further improved. With the development of chain operations, the technological innovation of Chinese chain enterprises will move to a new level in the future, and at the same time, higher requirements will be placed on social-wide supporting facilities. Computers, network technology, bar codes, refrigeration technology, e-commerce, logistics and distribution and other modern technologies are all technical supports for the further development of chain operations.

5. The opening of franchise chain operations to the outside world will be further accelerated. After China joins the WTO, it promises to liberalize franchising and no longer restrict it. This not only provides conditions for foreign franchise companies to directly enter the domestic market, but also provides opportunities for Chinese franchise companies to enter the international market. Accelerating the integration of my country's franchising with the international market has laid a good foundation for the development of a franchise management model with Chinese characteristics, and has also brought new opportunities for the development of China's franchising.