Franchising As a Method of International Expansion for Chinese Companies

Abstract

In the last 20 years franchising has become a popular method of entering foreign markets not only for the companies from developed countries, but also for the firms coming from growing economies. After having experienced the advantages of franchising model in their country, Chinese companies have started using this type of internationalization on other territories as well. The prevalent explanation for this is a relatively low investment from the franchisor party and a rapid expansion on the new markets. This research examines theories, benefits and problems in franchising business model in general; studies fundamental characteristics of the respective legislation and agreements in China and Ukraine; analyses a case study from Miniso Ukraine. The purpose of this research is to either find out the Chinese peculiarities in managing franchises or prove that Chinese companies have a standard approach regarding this type of international growth.