McDonald´s franchise model makes now sense - Ben Cavender

Ben Cavender

McDonald´s China is trying to sell its 2,200 stores for up to US$2 billion to third parties. A move that makes sense, says retail analyst Ben Cavender in CFO, because the number of people able to run chain stores has gone up exponentially.

CFO:

The McDonald’s brand has lost its early luster in China, with market share declining from 15.1% in 2010 to 13.8% in 2015. Cheung said McDonald’s is looking for a Chinese partner with a “deep understanding” of China’s market, rather than one that can simply bankroll new stores. 

A franchise-only model in China makes sense now because the market has matured to the point where there are more people with experience running fast-food chains and fast-casual restaurants, according to Ben Cavender, director at China Market Research Group. “There’s a stronger talent pool, and they have the capability to operate a franchise and operate it well,” he told the WSJ. ” Brands are also clamoring to try to grow into new markets, and they might not be able to do it quickly by themselves, and they need help.”

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