Franchising law in China

Since the concept of franchising was introduced to China in the late 1980s by the pioneering United States systems, KFC and McDonalds, it has developed rapidly. Although franchising accounts for only about three per cent of China's total retail sector, starkly behind the equivalent figure of 40 per cent in the US, China already has over 2,600 franchise systems which makes it the world's most franchised country in terms of system numbers. The future development of franchising in China will undoubtedly be advanced by the introduction of a new law regulating the rapidly growing franchising sector. This chapter outlines he commercial and legal nature of franchising, its development in China and the regulatory regime introduced to regulate commercial franchising activity.