US fast-food chain McDonald's Corp. plans to open 300 new stores in the Chinese mainland this year.
It began opening up a franchise operation in first-tier Chinese cities including Shanghai and Shenzhen recently after a similar move in Sichuan Province, Chongqing, and so on. People in the know disclosed in an interview on February 16 that it would hold three press conferences on such operation over the following half a month and those in Shanghai and Shenzhen were allowed to sign up only.
As for the saying, it responded that in order to fuel expansion in the market, it made such a decision. And in the future, it would expand there through three business modes, namely direct-run stores, traditional franchise stores, and developmental franchise stores. It began opening up traditional franchise business in Shanghai and Shenzhen from December 10, 2013 and this was a choice made by it after rigorous market researches. And developmental franchise business would become a driver to fast growth of it in the market, too.
Gao Jianfeng, managing director with BOGO Consultants, said that it wanted to expand in the market by advantage of social resources, thus made a decision to open up a franchise operation in some cities. It mainly opened up the operation in first-tier cities there and to a large extent, this indicated that it had a strong control over those markets, in which it was confident in both management and brand.
He reiterated that it saw 80 percent of the stores around the globe be manged under the mode of franchise operation and in the Chinese market, it showed a more prudential attitude. It for the first time opened up the operation there as early as 2010, but had had franchise stores in Provinces including Jiangsu, Fujian, and Sichuan as well as some cities in Guangdong Province. It would open up the business in Shanghai and Shenzhen this year. Available data showed that it had a total of 35 franchisers in the market currently.
Hurt by the global economic downturn in 2013, McDonald's witnessed both profit and sales growths booked be lower than expected. And in the Chinese market, it was impacted by not only an economic slowdown but poor chicken sales rooted from the bird flu. Because of those, it once slowed down expansion there and due to this, it even lowered the annual new store opening expectation by 50 ones. A top executive of it revealed that it opened 275 stores in the market last year.
