CHINA FRANCHISE NEWS
Vol. 5 , No. 01 - January 2, 2003
TOPICS THIS ISSUE:
- IFC To Invest US$6.5 m In Beijing Retail Chain
- Sausage Makers Infringe KFC Brand
- Chinese Medicine Pharmacy To Open Stores Overseas
- 240 Poor Students Benefit From KFC Program
- 2008 Beijing Olympics To Increase Recognition of Chinese Brands
IFC To Invest US$6.5 m In Beijing Retail Chain
The International Finance Corporation, the private sector arm of the World Bank Group, agreed to invest US$6.5 million in Wumart Stores Inc, a leading retail chain store operator in Beijing.
IFC's investment supports Wumart's international offering on the Growth Enterprise Market, the second board of the Hong Kong Stock Exchange.
It will help Wumart expand in the face of increased international competition. Wumart raised US$70 million in its international offering and intends to use the proceeds to partially fund the establishment of 10 hypermarket franchises, 32 supermarkets and 152 convenience stores over the next two years.
Wumart represents the first investment by IFC in a Chinese retail company. IFC's retail sector portfolio includes US$275 million in investments in 15 countries. Wumart is the Chinese mainland's first non-State owned retailer to issue shares on Hong Kong's Growth Enterprise Market.
The Chinese mainland's retail sector is undergoing rapid changes resulting from accession into the World Trade Organization. The country will end restrictions on foreign ownership in the retail sector by 2005.
Source: China Daily
Sausage Makers Infringe KFC Brand
A final adjudication over a sausage brand dispute in Tianjin, a port municipality in north China, has been dissolved after the court ruled the contested name was too similar to the huge US Kentucky Fried Chicken (KFC) fast food brand.
The plaintiff, the Changcheng Meat Processing Company in Beichen district, sued the Jinxi Qitemei Food Company in Xiqing district late last year, alleging the defendant infringed its sausage brand "Kendeji."
The Jinxi Qitemei Food Company appealed to a higher court after the first hearing in the Tianjin No. 1 Intermediate People's Court, ruled that it stop using the name "Kendeji" and pay 30,000 yuan (over 3,600 US dollars) compensation to the plaintiff. The Tianjin People's Higher Court overturned the first verdict and rejected the plaintiff's charge.
The court ruled that neither company was justified in using the brand, because "Kendeji" has the same pronunciation and similar characters in Chinese as Kentucky Fried Chicken.
The court said that the use of the name went against the accepted principle of honesty in business and will mislead consumers to associate their products with that of the American- based fast food chain.
The sausages made by the two companies were also marked " American flavor."
The Changcheng Meat Processing Company started to produce sausages branded "Kendeji" in May 1995 and the "Kendeji" brand was registered under its license. The Qitemei Food Company started producing "Kendeji" in 2000.
Source: China Daily
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Chinese Medicine Pharmacy To Open Stores Overseas
Tongrentang Chinese Medicine Pharmacy, with over 300 years of history, plans to open 100 chain stores overseas in the next three years.
Tongrentang, once a royal drug firm in the Qing Dynasty, China's last empire, is the country's most prestigious traditional medicine pharmacy with 500 outlets nationwide.
In its latest endeavors to combine ancient secret recipes with high-tech and modern business management, Tongrentang has set up footholds in Japan, Thailand and Britain.
The pharmacy has a blueprint for becoming a transnational pharmaceutical company in five years with the ultimate goal of becoming the world's biggest brand name of natural medicine.
Tongrentang has developed 800 varieties of medicine. In a recent bid to open 100 drug retail stores, Tongrentang won 41.
As China has become a member of the WTO, foreign firms will be allowed to enter the drug retail market after 2003.
Source: Xinhua
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240 Poor Students Benefit From KFC Program
More than 240 poor students in 24 Chinese colleges and universities have benefited from a stipend given by China Kentucky Fried Chicken Corporation Ltd.
The stipend totaling 38 million yuan (about 4.5 million US dollars) is the largest commonweal fund jointly set by the China Youth Development Foundation and the multinational company in China.
The fund is aimed to aid the poor college students both in character and scholarship.
The 10-year-long project, which began in November last year, annually offers 5,000 yuan (602 US dollars) for each poor student, who can apply for the aid year by year from the first term until graduation.
China Kentucky will launch work-study programs in the local KFC restaurants for the aided students.
Statistics from the financial department of the Education Ministry show that there are about 1.5 million poor students among the total 5 million college students in China.
Some 1,000 KFC restaurants have been opened in 200 Chinese cities since its first one was launched in Beijing in 1987.
Source: Xinhua
2008 Beijing Olympics To Increase Recognition of Chinese Brands
The 2008 Beijing Olympics will make a number of local enterprises and their products increasingly popular to the rest of the world, according to Beijing Mayor Meng Xuenong.
The organizing committee of the Beijing Olympics is negotiating with the International Olympic Committee (IOC) in a bid to help a number of domestic enterprises, such as the Legend Group, to create worldwide brand names for their products.
The Legend Group is one of China's leading manufacturers of IT (information technology) hardware.
The Beijing 2008 Olympic organizing committee has invited both domestic and foreign firms to participate in the marketing operations of the Beijing Olympics, saying that "the gate of Beijing is wide open to all".
Currently more and more Chinese enterprises are cashing in on the people's growing sports fervor. The Beijing-based Yanjing BeerGroup is even trying to expand its overseas market by signing up Yao Ming, the Chinese basketball superstar now playing in the NBA, for its advertising campaign.
Source: Xinhua
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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.
