This 10 page paper discusses a case study of petroleum company in China that is offering water based diesel products. The paper begins with an overview of franchises, what they are, advantages and disadvantages. The major portion of the paper explains the new "Measures for the Regulation of Commercial Franchise," which became effective February 1, 2005. The case is about a domestic company, thus, that is the focus. The essay ends with the steps the company needs to take to prepare for franchising. Bibliography lists 4 sources.
Name of Research Paper File: MM12_PGlpslch.rtf
Unformatted Sample Text from the Research Paper:
services. Further, the products are environmentally-friendly and still reduce costs for customers. Given the volume of fuel used by commercial and industrial fleets, a 5 percent reduction in fuel costs
will make a significant difference in customers bottom line operating costs. LPSL was initially planning to offer their products in Shanghai only but Mr. Marin, the major investor in the
company was contacted by a company in Beijing that is interested in offering the fuel there. What is needed at this point is an understanding of franchising regulations in China
for domestic companies. The following pages present this information. Franchising in China Exactly What is a Franchise: A franchise is a method of doing business (Wikipedia, 2005). The franchisor
licenses trademarks and methods of conducting business to a franchisee (Wikipedia, 2005). The franchisor basically sells the rights to another to sell the product and use the business name (Wikipedia,
2005). The franchisee typically pays an initial fee to the franchisor as well as ongoing royalties (Wikipedia, 2005). The contract between the parties specifies the territories where the franchisee can
conduct business, the type of support the franchisor will provide, like training, marketing or other services, and the costs to the franchisee (Wikipedia, 2005). Advantages of Franchises: There are
numerous advantages of this kind of business arrangement for both the franchisee and franchisor (Wikipedia, 2005). For instance, the franchisee gets the use of a known brand name and in
some cases, a method of operating that has already been proven successful (Wikipedia, 2005). Thus, franchising is more cost-effective than beginning a competing business from scratch (Wikipedia, 2005). In this
particular case, potential franchisees do not have the resources, knowledge or technology to develop a competing product. Advantages for franchisors include the ability to expand their brand more quickly across