outline

• The introduction of franchising

• The introduction of 7-eleven

• Case Study: 7-eleven Franchising in Shanghai

• Advantages and disadvantages of franchising

• Conclusion

The introduction of franchising

• Brief introduction: The idea of franchising

• History & development

• Types of franchising

What is franchising?

Franchising is the practice of using another person's

business model.

History & development

• came to prominence until the 1930s in the United States

• the rise of franchise-based food service establishments

Types of franchising

• Trade Name Franchising eg: international hotel chains.

• Product Distribution Franchising eg: the brewery industry's sales of international soft drinks

• Business Format Franchising

The introduction of 7-eleven

• History and development

• 7-eleven franchising in China

introduction

• Founded in America in 1927(South Mainland Ice Company)

Milk,eggs,bread

Opened 16 hours per day

Changed its brand name to 7-11 in 1946

Open the age of convinient stores!

cover 18 countries

Franchising in China• In 1992 in Shenzhen

• In 1995 in Guangzhou

• (restriction of foreign investment on franchising-----failed to develop rapidly)

• Guangdong Saiyi convenient stores Company ltd

• Got a passport of setting up 300 stores in Guangdong

7-eleven Franchising in China In 2005 in Beijing

• Registered fund:35million dollars

• Till August over 590 shops

• 512 — Guangzhou 75 — Beijing

In 2009 in Shanghai

• Franchiser: Uni-president Company

( 台湾统一企业 )

7-eleven Franchising in Shanghai

When: 2009Who: Taiwan President Chain Store

台湾统一超商 (right of management ）Why: (late) Japan-based strategic consideration

1 、 mature convenient chain store management

( 成熟的便利店业态）2 、 fierce competition

Competitive Differentiation 差异化竞争

1 、 Kuai can dao/quick meal counter

( 快餐岛服务）2 、 hao dun/good stews

( 好 炖）3 、 7-Eleven’s City Cafe

……

Advantages and disadvantages of franchising

for the franchiser

for the franchisee

1.National expansion of the brand 2.Reduction of competitors’ abilities 3.Attraction of entrepreneurs 4.Improvement of market share 5.Unique services the customers

Key advantages for the franchisor are:

Key advantages for the franchisee are:

1.Access to a proven business concept 2.An operating blueprint 3.Training4. management support 5.Exchange ideas and experiences

Key disadvantages for the franchisor

1.mistakes of unsatisfactory franchisees.

2.difficult to control franchisees.

3.have to share profits with franchisees,.

Key disadvantages for the franchisee

1.Less freedom and creativity

2.many costs, restrictions and obligations

3.no guarantee

outline

• The introduction of franchising

• The introduction of 7-eleven

• Case Study: 7-eleven Franchising in Shanghai

• Advantages and disadvantages of franchising

• Conclusion