How does KFC operate KFC? Franchising? As an effective way to expand business in the world, 1993 began to try franchising in China. After a period of silence, since 2000, KFC's franchise in China has only adopted a form of "not starting from scratch". "Franchising" is the representative strategy of KFC's first brand strategy. China characteristics? .
First, what is it? Not starting from scratch?
The so-called "not starting from scratch" means that KFC will transfer a mature and profitable restaurant to a franchisee. Franchisees don't need to do a lot of heavy preparations, such as site selection, opening stores, recruiting and training employees, etc. These are ready-made. "Among them, site selection is often the key to success, and KFC has helped you do it."
This is the best way for KFC to franchise in China market at this stage, "said Su, president of Yum! Brands. China Catering Group in Greater China owns well-known brands such as KFC and Pizza Hut. If a profitable KFC restaurant is handed over to a franchisee, the business risk of the franchisee will be greatly reduced, and only by maintaining it will it succeed. ?
The meaning of KFC's "current China market" is: on the one hand, some China enterprises are forming a certain economic scale and perfect management system, and the chain operation is developing rapidly and gradually standardized; On the other hand, due to the development of various economic components, fragmentation is a major feature. There is no such special provision for regional commercial characteristics in China, but only a trial "Measures for the Administration of Commercial Franchise", which has simple provisions and cannot undertake the functions of regulating regional economic cooperation, commercial asset operation and commercial capital expansion brought by franchising.
Under such circumstances, KFC's caution is justified. Since 1998 KFC publicly applied for franchise in China market, KFC's China headquarters has received hundreds of consultation calls and letters requesting franchise almost every day. However, KFC's audit requirements for franchisees are very strict. Franchisees should not only have1000000 USD or 8 million RMB as expenses for joining, store decoration and equipment introduction, but also have background and practical experience in catering, service and tourism. Considering the fierce competition in the catering industry in big cities, KFC's transferable restaurants are basically distributed in small cities with high consumption levels.
From August 2000, when the first KFC franchise store in China was handed over in Liyang, Changzhou, to 1 month in 2004, 1 1 restaurants were authorized to join. At present, among the 0/000 KFC stores in China/KLOC-0, 95% of the restaurants are direct stores and 5% are franchisees.
The second is the content of "not starting from scratch" franchise.
In terms of funds:
First of all, the franchise store must pay an initial joining fee of $37,600. This fee is one-off and will be adjusted according to the price index of the United States that year. At the same time, every franchisee must pay this fee when developing a new store.
Second, the transfer fee of each restaurant is more than 8 million yuan. The business area of KFC restaurants ranges from 350 to 400 square meters. This 8 million yuan is the reference price for buying a KFC restaurant according to some comprehensive indicators. The actual transfer fee will depend on the sales and profits of the target restaurant. After paying this fee, the franchisee can take over an operating KFC restaurant, including all the decoration, equipment and facilities of the restaurant, as well as the trained restaurant staff, including the cash flow and profits generated in future operations. But it does not include the cost of real estate leasing.
Third, the cost of going concern includes the franchise fee accounting for 6% of sales and the advertising share fee accounting for 5% of sales. These rates and fees are formulated on the current basis and will remain unchanged for ten years after the franchise contract is signed.
Location: At present, it is mainly in small and medium-sized cities in China, with a non-agricultural population10.5 million to 400,000, and an annual per capita consumption of more than 6,000 yuan. It has certain opportunities to join KFC restaurants. At present, KFC is not allowed to use its own stores to open new stores, and can only transfer KFC restaurants that are already in operation.
Time: The time from the beginning of application to the transfer of the store is about 6 months; The initial term of the franchise agreement is at least 10 years, and future franchisees must voluntarily engage in KFC franchise for more than 10 years, preferably 20 years.
Training: To join KFC, training is a must. Successful candidates will be required to attend an extensive training program lasting 65,438+02 weeks before running the restaurant. The restaurant training lasting for 65,438+02 weeks will enable franchisees to effectively master the duty management they need to know to run a successful restaurant, lead courses such as restaurants, and also include the study of various workstations such as Hamburg workstation and French fries workstation. After the franchisee takes over the restaurant, he will also arrange a 5-6 month internship period for restaurant management. In the process of training, future franchisees should bear their own expenses (transportation expenses and living expenses).
It can be seen that behind the strict franchise rules is the interest relationship between KFC headquarters and franchise stores. The success of KFC depends on the success of each franchisee. The franchisor must give sufficient support to the franchisee. Only when every franchisee is profitable can the whole franchise system become stronger. On the one hand, these training courses improve the working ability of candidates and cultivate suitable management talents for KFC; On the other hand, candidates can identify with KFC corporate culture and have a strong service concept, so as to realize the growth of KFC headquarters and franchise stores.
Third, a win-win situation is the final result.
Franchising, as an advanced business model, does have its advantages. For franchisees, a mature profit model can be obtained immediately, thus greatly reducing the investment risk. Franchisees can not only use the franchiser's trademark and trade name, but also use the successful branch management mode and method verified by the headquarters, and get all-round guidance and support from the headquarters. The brands, trade names and products of the headquarters have the basic guarantee of franchising; Headquarters unified distribution system, making product cost more competitive; Can share with headquarters resources in advertising; Joining a good joining system also gives you a bargaining chip for purchasing and financing. Therefore, some people regard franchising as the most convenient investment method for entrepreneurs, which is "picking peaches on the shoulders of giants", which can quickly realize the dream of being a boss.
As a franchisee, attracting investors will also benefit: franchisees will pay franchisees a one-time joining fee when joining; The royalty extracted from the franchise store turnover according to a certain proportion or quota; Profits from selling products (equipment) to franchisees; Distribution and training expenses of franchised stores. There is another important advantage: you can expand your brand and market without your own investment, thus suppressing your competitors.
For KFC, the initial joining fee is $37,600 and the one-time transfer fee is RMB 8 million for each store transfer. There are also royalties accounting for 6% of sales and advertising sharing fees accounting for 5% of sales every year. Most of the transferred stores are C-class cities, which have great development potential and low competitive pressure, which is beneficial for investors to get good returns and reduce management costs and operations for KFC. Through the transfer of income, we can continue to open stores, which is a risk-free high-speed expansion of Zhang Zhilu for KFC.
For franchisees, after joining KFC, they can master advanced enterprise management through training, and managing KFC by themselves is often more diligent than hiring professional managers. After the transfer, the store's income will be more than before, which is why KFC is personally managed by franchisees, and it also saves a lot of management expenses for KFC. Franchisees stand on the shoulders of KFC and can also bring considerable benefits to themselves through their own efforts.
This brand-new franchise model is called "China characteristics" by KFC, and its essence, that is, behind the strict provisions of franchise, is the interest relationship between KFC headquarters and franchise stores. The success of KFC depends on the success of each franchisee. Compared with some domestic chain store owners, who only charge franchise fees and have no management and training for investors, KFC's strong brand awareness is another guarantee for its success.
Among hundreds of franchised brands in China, KFC's "not starting from scratch" franchise is probably the most stable and the overall effect is also the best. This way ensures the win-win situation that KFC has been pursuing-investors make money almost without risk, and KFC expands the market share of the brand without risk.
KFC's cultural concept is integrated into the globalization concept of China market.
First of all, when entering the period, the main strategy is to introduce a brand-new western fast food service system and catering concept.
1. With its brand-new chain operation mode of unified logo, unified clothing and unified distribution, it finally established its position in the China market with its high-quality products, fast and friendly service and clean and hygienic catering environment.
2. Always adhere to the localization of 100% employees, and constantly invest funds and manpower in training at all levels. From restaurant waiters and restaurant managers to functional department managers, the company arranges scientific and strict training plans according to the nature of work. In order to make managers reach the professional level of fast food management, KFC has specially established a professional training base suitable for restaurant management? Education development center.
3. KFC? Speed orientation? The entrepreneurial spirit of fast food industry makes it pay special attention to team spirit and rely on its team cooperation to achieve high efficiency, thus ensuring correct and fast service during peak business hours. It has formed an efficient, flexible, perfect and advanced management incentive mechanism, and team spirit and excellent management level are the secrets of KFC's foothold in the market.
4. Excellent service. At KFC, you will get more services than you originally hoped. The tenet of KFC is customer first, and it is this tenet that makes every customer, whether adults or children, feel at home.
In the mature period, the strategy of combining Chinese and western culture was formulated.
1. KFC hired more than 10 domestic experts and scholars as consultants to improve and develop fast food varieties suitable for China people. KFC has always used fried chicken, shredded vegetable salad and mashed potatoes as its main varieties, but the dietary tastes of Chinese people are constantly changing, and the varieties are too single, which is unfavorable to its development prospects. In order to cater to the tastes of China people, the United States has successively introduced KFC, which is popular with the people of China? Spicy chicken wings? 、? Chicken leg fort? 、? Lotus fresh vegetable soup? This is an unprecedented change for KFC, an old shop that always pays attention to tradition and norms.
2. KFC has set up China Healthy Food Advisory Committee to research and develop new food products suitable for the new generation of consumers in China, and further expand the market.
Establishment of franchise mode
Like other regions, franchising has played an important role in the expansion of KFC. The so-called franchising refers to the right to use patents, trademarks, product formulas or any other valuable methods obtained by the franchisee by paying a certain transfer fee to the transferor. The transferor does not control the strategy and production decision, nor does it participate in the profit distribution of the franchisee.
The management mode adopted by KFC is just a franchise mode. KFC provides brand, management and training, as well as a centralized and unified raw materials and service system. The partners use a unified brand and service to operate, and finally the two parties share the commercial benefits according to the agreement. Because China was not open to the outside world at that time, the political risk of KFC's development in China was great, and the cultural isolation in China was serious, so franchising became the first choice for KFC to enter the China market. Another advantage of franchising is that KFC can guarantee a stable income with little investment, which will make use of the existing operating conditions. This is a very attractive choice where franchisees can easily avoid deviating from KFC's operating rules. It is precisely because of the correct market strategy to enter China that KFC has blossomed everywhere in China since 1986 was introduced to China from the United States.
Not starting from scratch
The so-called "not starting from scratch" means that KFC will transfer a mature and profitable restaurant to a franchisee. Franchisees don't need to do a lot of heavy preparations, such as site selection, opening stores, recruiting and training employees, etc. These are ready-made. "Among them, site selection is often the key to success, and KFC has helped you do it." This is the best way for KFC to franchise in China market at this stage. If a profitable KFC restaurant is handed over to a franchisee, the business risk of the franchisee will be greatly reduced, and only by maintaining it will it succeed. ?
Since 1998 KFC publicly applied for franchise in China market, KFC's China headquarters has received hundreds of consultation calls and letters requesting franchise almost every day. However, KFC's audit requirements for franchisees are very strict. Franchisees should not only have1000000 USD or 8 million RMB as expenses for joining, store decoration and equipment introduction, but also have background and practical experience in catering, service and tourism. Considering the fierce competition in the catering industry in big cities, KFC's transferable restaurants are basically distributed in small cities with high consumption levels. From August 2000, when the first KFC franchise store in China was handed over in Liyang, Changzhou, to 1 month in 2004, 1 1 restaurants were authorized to join. At present, among the 0/000 KFC stores in China/KLOC-0, 95% of the restaurants are direct stores and 5% are franchisees.