Ccfa 10 20 Milano

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Fashion, apparel, textile, merchandising, garmentsFashion, apparel, textile, merchandising, garments

Fashion, apparel, textile, merchandising, garmentsFashion, apparel, textile, merchandising, garments

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  • 1. Franchising Operation in China By Guo Geping, Chairperson of CCFA October 20, 2006. Milan, Italy
  • 2. Tips for Foreign Franchise Brands into China Environment of Franchising in China Introduction of CCFA Status of Franchising in China Category Trends of Franchising in China
  • 3. Tips for Foreign Franchise Brands into China Environment of Franchising in China Introduction of CCFA Status of Franchising in China Category Trends of Franchising in China
  • 4.
    • 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
  • 5. Tips for Foreign Franchise Brands into China Environment of Franchising in China Introduction of CCFA Status of Franchising in China Category Trends of Franchising in China
  • 6. 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
  • 7. 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
  • 8. Laws & Regulations
            • Contract Law ;
            • 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
  • 9.
    • 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 Policy
  • 10. Tips for Foreign Franchise Brands into China Environment of Franchising in China Introduction of CCFA Status of Franchising in China Category Trends of Franchising in China
  • 11. Franchise systems in China increasing rapidly and steadily Status of Franchising in China Source: Year Surveys By CCFA
  • 12. Economic Contributions From Franchising in China, 2005 Status of Franchising in China Source: 2005 Year Survey By CCFA 52.5 Sales ( Billion US$ ) 10.5 Investment ( Billion US$ ) 3,360,000 Jobs Contributions
  • 13. Franchise Sectors (suggested by EFF) Status of Franchising in China Y 3.Hotel/Motels Y 2.Restaurants/Fast Foods/Cafes/Bars/Pubs Y Specialized Food Stores Y General: Super & Hyper markets/CVs 1.Food Retail Existence in China Sub-Sectors Sectors
  • 14. Status of Franchising in China N Second hand furnishings & equipment Y DIY Stores N Sanitation & Pets Control Y Maintenance/Repairs/Cleaning N Fittings & Equipment Y Textiles & Furniture 5.Home/Garden Furnishings/Fittings/Maintenance Y 4.Clothings/Personal Equipment
  • 15. Status of Franchising in China Y other Y Car and Truck rentals/Driver hire Y Servicing & Sale of accessories 7.Transport & Vehicle Products & Services Y 6.Other Property Services (Domestic & Professional)
  • 16. Status of Franchising in China N Care Services: elderly, children Y Medics & Pharmaceuticals Y Fitness Y Beauty Products & Services 10.Personal Care/Beauty/Fitness/Medical/Pharmaceutical Y 9.Training & Education N Finance/Tax/Insurance/Audit/Accountancy/Paralegal N Human Resource Services: Employment/Executive Search/Management Y Advertising/Publicity/Graphic Design Y Computer/ITC/Phone & Mobile Sales & Services Y Offices Supplies/Printing/Copying Y Parcel/Courier Y Fittings/Equipment/Security/Maintenance/Cleaning 8.Office/Business Supplies & Services
  • 17. Status of Franchising in China Y 14.Other Y 13.Other Specialized Retail Stores Y 12.Pets/animals N Matrimonial/Dating Agencies Y Recreation Centers & Equipment Y Sports Clubs Y Travel Agencies 11.Travel/Sports/Leisure (Not sportswear)
  • 18. Status of Franchising in China Franchisors’ Top 5 Focuses 2006 Source: Blue Book of 2006 Franchising in China
  • 19. Status of Franchising in China Franchisees’ Top 5 Focuses 2006 Source: Blue Book of 2006 Franchising in China
  • 20. Status of Franchising in China < 100 Thousand 23.1% 100-250 Thousand 29.9% 250-500 Thousand 18.5% 500-1000 Thousand 15.6% 1000-2000 Thousand 8.4% > 2000 Thousand 4.5% Investment Capability of Potential Franchisees 2005 Source: Blue Book of 2005 Franchising in China
  • 21. Tips for Foreign Franchise Brands into China Environment of Franchising in China Introduction of CCFA Status of Franchising in China Category Trends of Franchising in China
  • 22. Trends of Franchising in China Experts Consensus: Top 6 Potential Sectors Source: Repot on Trends of Franchising in China, 2005 by CCFA
  • 23. Prospective Franchisees’ Hottest Choices Trends of Franchising in China Source: 2005 Prospective Franchisee’ Survey by CCFA 3.00% Others 9.00% Training & Education 9.00% After Auto Market Service 10.00% Leisure Beverage 10.00% Home Appliances 11.00% Physical Training Gym 12.00% Gift Specialty 13.00% Western Fast Food 23.00% Chinese Fast Food Ratio Industry/Sector
  • 24. Tips for Foreign Franchise Brands into China Environment of Franchising in China Introduction of CCFA Status of Franchising in China Category Trends of Franchising in China
  • 25. 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
  • 26. 14 of Top 20 USA Franchising Brandings in China Tips for Foreign Franchise Brands into China Source: Repot on Status of Foreign Franchise Brands Development in China, 2005 by CCFA
  • 27. Tips for Foreign Franchise Brands into China Franchisee’ Most Valued Capabilities By Foreign Franchisers Source: Repot on Status of Foreign Franchise Brands Development in China, 2005 by CCFA
  • 28. Tips for Foreign Franchise Brands into China Source: Repot on Status of Foreign Franchise Brands Development in China, 2005 by CCFA
  • 29. 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
  • 30. 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
  • 31. 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.
  • 32.
    • Policy & Regulation recommendation, Lobby and Coordination;
    • Series training programs, retail & franchise;
    • Survey & Data services;
    • Seminars, Conventions & Exhibitions etc.
    Main Activities : What can CCFA assist you?
  • 33. China Franchise Expo 2006
  • 34. Thanks