CHINA FRANCHISE NEWS
Vol. 2 , No. 1 - January 02, 2001
Review of Chinese Franchise Developments in the Year 2000
TOPICS THIS ISSUE:
- CCFA Joins IFA
- Gradually Eliminating Restrictions on Equity Ownership of Commercial Enterprises with Foreign Investment
- China Offers Legal Changes to Speed WTO Accession
- Brand Name Franchise to Chinese Investors
- China's Showcase for International Franchise
CCFA Joins IFA
At the beginning of 2000, China Chain-store Franchise Association (CCFA) formally joined IFA as a member. By this means, CCFA will play a more active role in international franchise in the future. CCFA is a national, industrial non-profit organization registered with the Ministry of Civil Affairs since 1997. It is comprised of retail and franchise companies that operate throughout China. Under the direction of China's Internal Trade Ministry, the CCFA assists the government in developing the retail and franchise industries. In October 1999, CCFA had 307 members.
(Source: Name Brand Times Beijing 05/31/00)
Gradually Eliminating Restrictions on Equity Ownership of Commercial Enterprises with Foreign Investment
The Establishment of foreign-invested commercial enterprises is allowed in municipalities directly under the Central Government, cities separately listed in plan, and other experimental areas. Foreign investors of such commercial enterprises that run no more than 3 chain stores can hold a controlling percentage of the equity, up to 65%, of the foreign-invested commercial enterprises, said Mr. Huang Hai, a senior official of Ministry of Internal Trade on the Fourth China Investment and Trade Fair.
Mr. Wang also disclosed that “China has eliminated the restriction on numbers and locations of foreign-invested retail enterprises. The Chinese government is currently considering if it will continue to restrain foreign investment in large chain stores and warehouse supermarkets.”
(Source: Spotlight Times 09/27/00)
China Offers Legal Changes to Speed WTO Accession
The Chinese government submitted a plan to a meeting of the WTO multilateral task force on Chinese entry to make changes to its commercial laws and regulations. The changes include enhancing its protection of intellectual property rights and abolishing local content rules.
China previously refused demands from WTO members to bring its legal and administrative systems in line with WTO rules on trade and investment. It argued that the calls amounted to interference in its domestic affairs. However, under the last-minute plan, China pledged to alter relevant regulations and extend the protection period for computer software copyrights, while adding provisions to its Trademark Law to further protect well-known brands. The proposed changes are to be completed before accession.
(Source: China Intellectual Property Law Newsletter 11/27/00)
Brand Name Franchise to Chinese Investors
Overseas franchisors are looking to expand their brand name business ventures in China. As the legal system is more mature and the market is very regulated, many international franchise giants are moving away from their initial reluctance to sell franchises in China.
Subway, with more than 14,533 locations in 75 countries, is the largest submarine sandwich franchise worldwide. It has already opened seven franchise chain stores in China, while three stores are under construction, expected to open this year. An additional three will be built next year.
Two leading franchisors of real estate brokerage offices – U.S.-based Century 21 Real Estate Corp. and Singapore-based Hersing Corporation Ltd. also express their interest in going the franchise route in China.
Century 21 set up its China headquarters in Beijing last year, and Shanghai representative office this April. They have 15 franchisees in Beijing and are seeking a master franchisee in Shanghai.
Other companies, such as Shanghai's Snoopy Place and hotel franchisor Marriott, are seeking franchisees in China.
(Source: Shanghai Daily 11/14/00)
China's Showcase for International Franchise
The 3rd Franchise China Conference & Exhibition (Franchise China 2000) was held in three of China's major business hubs – Beijing, Shanghai and Guangzhou – from Nov. 6-14, 2000. The show was co-organized by the China Chain-store Franchise Association (CCFA) and Global Resources.
Franchise China 2000 was to introduce worldwide franchisors from Europe, North America, and Asia to Chinese investors. A concurrent conference instructed potential franchisees about franchising concepts and strategies.
The International Franchise Associate (IFA) voiced its support and sent a delegation to Franchise China 2000 including IFA Chair JoAnne Shaw, who is the keynote speaker for the event. In addition to the IFA, Franchise China 2000 is backed by 11 other worldwide franchise associations and several local trade organizations in each city.
(Source: Business Guild Nanjing 11/15/00)
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