Free guides for buying a franchise and franchising your business in China, plus the latest articles from the Quality Franchise Association.
Practical guides to buying a franchise in China: choosing a brand, due diligence, costs, finance and local rules.
View all articles GuidesStep-by-step guides to franchising your business in China: readiness, legal documents, fees, recruitment and local regulation.
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A franchisor may inspect its outlets, but inspection rights should not become a pretext for arbitrary charges or closures. Agreeing standards, evidence requirements, remedial deadlines and review procedures before signing helps protect both brand consistency and franchisees’ interests.
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The same royalty rate can produce substantially different long-term costs depending on how turnover is defined. Before signing, clarify refunds, platform deductions, prepaid balances, minimum fees and audit procedures to avoid fees falling due before the business turns a profit.
Read moreFranchise agreements should generally last at least three years, unless the franchisee agrees otherwise. Before signing, distinguish between the contract’s effective date, the start of brand authorisation and the opening date, so that preparation does not eat into your trading period and annual payments are not mistaken for an annual right to exit.
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An unchanged brand name does not mean the company responsible for your franchise remains the same. Before signing, agree when the franchisor may replace the contracting entity and who will take over services, deposits and existing liabilities.
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Showcase outlets selected by the franchisor do not represent the whole network. Choose outlets independently, observe them at different times and interview franchisees to check whether the operating model and support services suit your needs.
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Ending a franchise agreement does not automatically cancel equipment orders, premises leases or loan agreements. Before signing, set out when these related contracts take effect, how you can exit them and who is responsible for refunds, to reduce ongoing costs after you leave.
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Success at company-owned outlets does not mean every site is suitable for replication. Clear site criteria, documented checks, lease reviews and responsibilities can reduce losses when a franchisee rents premises before head office rejects them.
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Recipes, processes and operating parameters should not be shared without clear limits, but confidentiality must not hinder store operations. Information classification, role-based access, contractual terms and leak-response exercises can create a workable system for protecting proprietary know-how.
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Store inspections should be about more than scores or penalties. Before launching a franchise network, head office should establish the basis for inspections, evidence requirements, support for corrective action and review procedures, so franchisees understand how issues are identified and resolved.
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Before recruiting franchisees, businesses should clarify who receives consumer complaints, who resolves them and who bears the cost. This article explains how trials in company-owned outlets, delegated authority and contract terms can create a workable complaints process.
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Centralised purchasing rules must do more than specify who franchisees must buy from. Before launching a franchise network, head office should test alternative sources of supply, define approval authority and agree who pays when supplies are disrupted.
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Territorial protection needs to go beyond a promise not to open another outlet nearby. Clear rules on boundaries, online orders, special sales channels and breaches can help reduce disputes within a franchise network.
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A first-instance court ordered Chengdu Benyuan Enterprise Management Co., Ltd to refund RMB 18,810 in service fees and pay RMB 15,000 in compensation. The company has appealed. The Yezixiong dispute highlights the importance of checking franchise filings and retaining evidence of promised operational support.
Read moreAutomotive service chain Xiaomuzhi’s technician content programme and red, amber and green franchisee grading system feature in a case study of head office support. Inclusion is not an endorsement of business performance.
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Yum China says it completed its acquisition of the Pizza Hut brand in mainland China on 7 August 2026. The removal of brand royalties has already generated cost savings, but this does not automatically mean lower fees for individual franchisees.
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