China will sign in its first franchise law in the next six months to regulate its fledgling franchise sector, according to a senior official with China Chain-store and Franchise Association (CCFA).
The law is aimed at ensuring franchise store runners carry out their commitment to franchise brand owners and ensure the quality of the stores, CCFA chairman Guo Geping said. He was in Beijing on Tuesday for the fourth China Franchise Exhibition and Convention.
The law will also protect franchise store runners in the case of franchise brand companies going bankrupt, Guo added.
The law will help attract more overseas franchise brands to China, Guo said, noting that some foreign brand owners are hesitant about coming to China because of a lack of legal protection here.
US-based fast-food chain McDonald's attended the exhibition, signaling its ambition in China's franchise market, yesterday's Beijing Morning reported. A McDonald's official said in anonymity on Tuesday that the company is preparing to launch a franchise system in China. He expected the first franchise restaurant to be in Beijing or Guangzhou.
All the current 460McDonald's outlets in China are directly run chains.
Other domestic participants in the franchise exhibition include retailers in Hualian, Lianhua and Guomei, Donglaishun and Quanjude restaurants and Tongrentang drugstores, the Beijing Youth Daily reported.
(eastday.com June 14, 2002)
