The Chinese authorities received applications for franchise business licences from 1,430 companies up to September last year, and Malaysians are keen to hop on to the bandwagon.

MALAYSIAN franchisors are eyeing the dynamic franchise market in China with its huge prospects.

A total of 13 Malaysian companies dealing in food and beverage, retail, optical care and education participated in the China Franchise Expo 2011 held at Beijing last month.

After all, China has one of the highest concentrations of franchise businesses in the world.

Franchisers from many countries have set foot and expanded in this country which overtook Japan to become the world’s second largest economy last year.

According to a report released by the China Chain Store and Franchise Association, the total number of franchise systems registered in the country as of the end of 2009 surpassed the 4,000 mark, a 15% increase over the previous year.

China has also seen a 10% increase to more than 330,000 franchise outlets.

Business beckons: Visitors entering the Malaysia Pavilion at the China Franchise Expo 2011 in Beijing.

Sales from the top 120 franchisors reach 310.9bil yuan (RM146bil).

Of 200 franchisors surveyed, 50% have operated between six and 10 years while about 20% have been in business for more than 10 years.

As of September last year, the Chinese authorities received applications for franchise business licences from 1,430 companies.

The trend of manufacturing-based companies turning to the franchise model to enhance their marketing networks and brand building is on the rise.

The association said that despite the effects of increasing rental and labour costs as well as prices of raw materials, 80% of the franchisors felt that the prospect of China’s economy still looked very good in view of the increasing spending power among Chinese consumers.

Spending on jewellery, furniture, petrol-based products and cars have increased by an average of 30%, with retail sales of consumer goods reaching 9.74tril yuan (RM4.48tril) in the first eight months of last year.

Of the top 120 franchisors, 10% were wholly foreign owned, 14% state owned and more than 50% privately owned.