CHINA FRANCHISE NEWS
Vol. 4 , No. 1 - January 2, 2003
TOPICS THIS ISSUE:
- American Express Enter Into Agreement With China International Travel Service
- Seven Famous Foreign Chain Stores To Open in Beijing Within The Next Two Years
- Insights Into Thai Restaurant
- First Beijing Shopping Mall To Open In 2005
- McDonald To Open 100 More Stores In China Despite World Cuts
American Express Enter Into Agreement With China International Travel Service
China International Travel Service (CITS) and American Express Travel Service Network International (TSNI) signed a franchise agreement in December to further explore the growing leisure travel market in China.
Under the agreement, American Express will expand its existing network of travel offices in China by appointing CITS as its only lead franchise partner, to identify and acquire like-minded partner agencies to join the fastest growing leisure travel network in China. "Leisure travel is quite popular in China nowadays. American Express global network and experience will offer us a competitive edge," said Zhang Beiying, executive vice president of CITS.
"This is a partnership in which everybody wins in China," said Jonathan S. Linen, vice chairman of American Express. "CITS wins by leveraging our global experience and worldwide travel network, and we win by partnering with the leading local leisure travel company in China. Most importantly, our leisure travel customers and American Express card members can gain guaranteed access to superior service."
CITS, China's largest travel agency, is engaged in tourism, investment, aviation, hotel management, insurance and other industries.
Currently, TSNI has 20 partner agencies in various major cities in China, including Beijing, Shanghai, Guangzhou, Tianjin and etc. The franchise strategy will allow the network to rapidly expand beyond existing locations and to better serve local Chinese travelers.
(Source: Asia Pulse)
Seven Famous Foreign Chain Stores To Open in Beijing Within The Next Two Years
According to news released by Beijing commercial commission, within the next two year, there will be a lot of famous foreign retail chains going to open chain stores in Beijing, including the three biggest European home d¨Ścor retailers, B&Q, OBI, and Leroy Merlin, 7-11, which is the biggest convenience store in the world, Spanish Discount store, Wal-Mart and French AUCHAN. Beijing is welcoming an influx of foreign investment in retailing.
It is reported that, by the end of October of this year, 17 Sino-foreign retail enterprises has been established, including 9 department stores, 2 shopping malls, one outlet, one supermarket, one food market and one membership store. Last year, the total amount of the sale from joint ventures was RMB 7,720,000,000 yuan, accounting for 4.8 percent of total sales from the consumer goods in Beijing.
(Source: Beijing Morning Post)
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Insights Into Thai Restaurant
To establish and operate a renowned Thai restaurant is very difficult, but to expand outlets is even more onerous. That is why it took Luckananaj Markawat, the owner of the Oam Thong restaurant, more than 18 years to start franchising her business. Ms Luckananaj currently owns her only restaurant in Sukhumvit 33 and hopes to franchise the first outlet in China next year. The estimated total investment for setting up an Oam Thong restaurant abroad with 150-200 seats is about US$200,000. Plus, the franchisees need to pay a $60,000 franchise entrance fee and 5% of the monthly gross sales as royalty fees.
However, the cost of investment and franchise fees for operators in Thailand will be marginally cheaper due to lower establishment costs. Investors are likely to break even within 3 years.
Mr. Luckananaj said it was time for her restaurant to open more outlets, particularly overseas, after gaining a strong foothold in Thailand.
Currently, about 80 percent of Oam Thong restaurant's customers are foreigners, thus it has had extensive experience in adapting Thai Foods to many tastes. Ingredients in each recipe are carefully controlled to ensure that customers dining at any Oam Thong restaurant will taste the same standard of food.
"This method is also good for us in franchising the restaurant because it will reduce the problem of a shortage of Thai cooks," she said.
Local franchisees will get fresh ingredients in the place where they live while they will get some specific Thai ingredients, sauce and some types of soup imported from Thailand as frozen items with the assistance of Diner Place Co, an affiliate specializing in the import and export of food ingredients and spices.
According to Ms Luckananaj, Oam Thong's decor is a combination of authentic Thai and contemporary style, so the new Oam Thong restaurants will keep this style. Although Oam Thong is targeting high-end customers, Ms Luckananaj said it is not necessary for franchisees to invest a lot using luxury products in decoration. "We can create an attractive Thai atmosphere in our restaurants with manageable costs, consequently our prices will be reasonable," she said.
The restaurant now has a menu with about 200 dishes, while franchisees may have fewer offerings in the initial stage. Each restaurant will have special menus featuring local specialty dishes. Ms Luckananaj also emphasized that all franchisees shall keep the "East Meets West" presentation style which has made Oam Thong unique in Thailand. "Normally masaman (a southern Thai curry) is served in a bowl in Thai restaurants but we serve this dish on a plate, similar to serving a steak with gravy."
Ms Luckananaj plans to open a Thai culinary college at her restaurant to serve her own franchisees as well as producing chefs for Thai restaurants overseas, tapping the increasing popularity of Thai food worldwide. "It's my dream and I want to make it come true next year. Now we need only to design the courses with cooperation from famous lecturers," she said.
Oam Thong took part in the recent Global Franchise Fair held in Singapore with support from the Department of Export Promotion and will soon join a road show promoting Thai franchises.
(Source: Bangkok Post)
First Beijing Shopping Mall To Open In 2005
It was reported that according to city plan, several shopping malls are currently under construction with location in Yizhuan Economic Development Area, Zhongguancun Chanping Science Park and Shunyi District respectively. The one in Yizhuan area, named as Beijing Mall, is the fastest project.
The chairman of the Beijing Mall, Xu Ming, unveiled that the working of the main building will begin next year if the issues of fire prevention are solved in time. It will take about two years to complete the first stage of construction of the Beijing Mall, with an area of 43,000 square meters and a total investment of RMB1700-1800 million yuan.
(Source: Beijing Youth Daily)
McDonald To Open 100 More Stores In China Despite World Cuts
Fast Food giant McDonald announced on November 8 that it was going to close 175 stores and lay off 400-600 employees worldwide. Meanwhile, McDonald is quitting from the 3 countries in Middle East and Latin America. This is the second big layoff within the last two years. However, McDonald in Beijing told reporter that McDonald in China would not be affected by the layoff. Despites cutting job in other countries, McDonald is planning to open 100 new restaurants in China each year.
"There has been not effect on our business," a spoke man at McDonald's Beijing office when asked about the announcement. "We are fully confident in McDonald's growth in China and will continue to develop our China business as planned," the spokesman said in a faxed response to questions.
McDonald has developed from 184 stores five year ago to now over 500 restaurants serving burgers, shakes and fries in China, one of the fastest growing countries. Competition is also fierce. KFC Colonel Sanders, which also operates hundreds of outlets in China, is the strongest competition in China.
(Source: Reuter)
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The China Franchise News is intended to be used for news purposes only. It should not be taken as comprehensive legal advice, and Lehman, Lee & Xu will not be held responsible for any such reliance on its contents.
