McDonald's aims to supersize franchise
By Zhang Lu (China Daily)
Updated: 2005-05-17 08:46

McDonald's, the world's largest fast-food chain, is to further expand its Chinese franchise network.

According to James Chu, senior vice-president of McDonald's China Development Company, the burger behemoth is dealing with a number of applications to open new restaurants in China.

"The company is expected to grant franchises to at least 15 Chinese individual investors around the country next year," he said.

And by 2008, 10 per cent of McDonald's projected 1,000 outlets in China will be operated by franchises, Chu told China Daily.

So far, the company has opened over 670 outlets around the country, but there is only one franchise.

Tianjin's Sun Meng franchise joined McDonald's in 2003.

The franchise business model has played a pivotal role in the company's growth in other markets.

Around 65 per cent of over 31,000 outlets globally are franchised.

"The timing could not be better for us to develop this business model, which has proved very successful globally, in the domestic market," said Chu.

According to Chu, McDonald's has established a sound business system, including high quality management teams and standard supplies, which is able to support its franchise business.

New regulations governing commercial franchises took effect in February, clearly defining the way foreign brands can operate franchise businesses in China.

Since January, more than 1,000 people have applied for McDonald's franchises, Chu said.

The company will first select seven or eight applicants to attend its global 12-month restaurant training starting in July with a further round of successful applicants to start training in November.

After completing the course these applicants will take over solidly performing McDonald's restaurants from next year.

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