The document discusses franchising opportunities in China. It provides an overview of the China Chain Store & Franchise Association (CCFA), including its role and membership. Details on the growth of the Chinese economy and franchising industry are presented. Various sectors and trends in franchising in China are examined, along with tips for foreign franchises looking to enter the Chinese market.

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

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

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

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

33. China Franchise Expo 2006

34. Thanks