04FranchiseAsia_Apr2019

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Special The Pros and Cons of Franchising in China Pros Expanding consumer class As China’s middle and upper class groups grow, the younger generation is growing up with more income than ever before. Many young Chinese like the opportunity to show off their wealth by buying big ticket branded items such as trendy drinks, fashion accessories, and more. Cons Intellectual Property Protection Many earlier foreign brands chose to enter China as companyowned stores or JVs instead of franchises due to weak intellectual property enforcement as well as uneven legal framework. Due to the lack of adequately enforced intellectual property laws, there have been many cases of local companies stealing someone else’s name and logo to open their own fake, unapproved outlets. Local Management Many franchisers report difficulties when it comes to finding qualified local managers who understand how to run a business. Training costs are high, but good employees have been known to quit shortly after receiving training in order to take a higher paying job somewhere else. Adapting to new markets Franchisers who wish to succeed in China must learn to adapt to the needs and tastes of Chinese consumers. The sheer size of the country means that there can be many differences between two different regions, so a company that can function well in one region may struggle to expand to other parts of China. In addition, foreign companies should be careful when translating their brand or product names in Chinese as the language differences may cause unintentional issues to develop. West is Best Many Chinese associate expensive foreign brands with quality, convenience, and good customer service. This is especially true in the retail and food sectors where Western franchises are often viewed as more trendy compared to local brands. Open to Franchising First-tier cities often have developed infrastructure, business friendly governments, and internationally standard services and amenities. However, while they’re relatively “easy” for newcomers to enter, labor and real estate prices have risen over the last few years. Second-tier cities, on the other hand, benefit from relatively lower as well as local governments that tend to encourage the creation of new businesses. In Conclusion… Despite the challenges of the China market, the opportunities are too great to ignore. The Chinese government has spent many years improving the country’s infrastructure and raising the standard of living. Western products in particular are seen as desirable, especially if they already have a strong brand presence. Combined with a young consumer base who are willing and able to spend more than the previous generations, franchising in China is looking more profitable than ever before. 24 Franchise Asia • 2019 Vol 36
Franchise Viewpoint Why Encouraging Innovation in Franchising Makes Good Business Sense By Troy Franklin COO, World Franchise Associates – Southeast Asia Carl Sagan, an American astronomer, cosmologist, astrophysicist, astrobiologist, and author, best known for his work as a science popularizer and communicator was definitely correct when he said, “We live in a society exquisitely dependent on science and technology, in which hardly anyone knows anything about science and technology”. Big Data As I begin this article, I am going to use Mr. Sagan’s quote as my disclaimer by admitting that I am one of those people who “knows hardly anything about science and technology”. Steve Jobs, the co-founder of Apple, is a legend when it comes to technology and innovation, so it is no surprise that he said that “Innovation distinguishes between a leader and a follower” but what is perhaps a bit surprising is that government leaders around the world are also starting to understand and embrace the power of innovation and technology. For example, India’s Prime Minister Narendra Modi noted that “The pace at which people are taking to digital technology defies our stereotypes of age, education, language and income.” IR 4.0 Innovation & Technology are becoming prevalent in many aspects of our day to day lives including 1) Education; 2) Communication; 3) Government; 4) Military; 5) Medical Science; 6) Transportation; 7) Religion & 8) Business and terms like Big Data, IR4.0 and Disruption are being used more and more in boardrooms, business meetings, seminars etc. Franchise Asia • 2019 Vol 36 25
Page 2: THE WAY BURGERS WERE MEANT TO BE MA
Page 5 and 6: Contents 2019 Vol 36 04 INTERNATION
Page 7 and 8: International Focus #2 #3 Burger Ki
Page 9 and 10: International Focus The Newcomers #
Page 11 and 12: International Focus RANK Name Count
Page 13 and 14: Interview Redesigning Islamic Presc
Page 15 and 16: Interview GENIUS AULAD facilitates
Page 17 and 18: Interview ■ What would you say ar
Page 19 and 20: Showcase MuzArt It’s More Than Ju
Page 21 and 22: Showcase Franchise Asia • 2019 Vo
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Page 25: Special Franchising in China Intern
Page 29 and 30: Franchise Viewpoint Other key techn
Page 31 and 32: LISTINGS INTERNATIONAL Planet Holly
Page 33 and 34: LISTINGS INTERNATIONAL Little Caesa
Page 35 and 36: LISTINGS Hesburger - Finland’s #1
Page 37 and 38: LISTINGS MALAYSIA Frespresso As we
Page 39 and 40: LISTINGS MALAYSIA TUTTI FRUTTI Tutt
Page 41 and 42: LISTINGS MALAYSIA EYE LEVEL For ove
Page 43 and 44: LISTINGS MALAYSIA AU COCO/CHAKRI CA
Page 45 and 46: LISTINGS MALAYSIA GOLDEN GINSENG Go
Page 47 and 48: LISTINGS MALAYSIA Q-DEES With more
Page 49 and 50: LISTINGS The Polliwogs Home-Fix Wit
Page 51 and 52: LISTINGS SINGAPORE Indo Chinese Lou
Page 53 and 54: LISTINGS SINGAPORE LEAP SCHOOLHOUSE
Page 55 and 56: LISTINGS SINGAPORE ANDERSEN’S The
Page 57 and 58: LISTINGS SINGAPORE Saybons Saybons
Page 59 and 60: News & Events DPM aims to boost tra
Page 61 and 62: News & Events Kedai Ayamas Eatery p

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