Interest in China as a franchise opportunity destination is on the rise in line with its rising middle class, currently at around 200 million people.

For an Australian that kind of scale of size is hard to comprehend – China’s middle class is close to ten times our entire population.

No wonder its generating interest as a franchise opportunity market.

One franchise business set to gain from China’s growing middle class is Gloria Jean’s Coffees.

Gloria Jean’s opened their first of 600 planned stores in China earlier this year, but franchising is not something that’s new to China, stemming back more than 20 years.

McDonald’s first began franchise business operations in mainland China in October 1990 and KFC has been there even longer, opening their first store in 1987.

McDonald’s now has nearly 1000 stores in China and is planning to open another 175 in 2010. (KFC has even more).

Despite having considerable success McDonald’s Asia, Middle East and Africa CEO Tim Fenton admits they’ve made some mistakes along the way.

“You don’t open just one store,” he said.

“You get three, four or five deals done, build them consecutively and train the staff consecutively. Then when a truck goes out from your distribution centre, it’s not carrying one store, it’s carry the products for three to five, so you save money.”

While considering economies of scale and monitoring costs is important, a franchisor needs to test their franchise business concept in the new country to ensure it’s sustainable, and adaptable to that market.

Since McDonald’s first went into China in 1990 their menu has been tweaked for local tastes, although is still based around burgers and fries.

It’s also important to remember McDonald’s have large amounts of resources available, so adopting their approach may be unsuitable for smaller franchise businesses.

Tim alone is responsible for 34 countries and more than 7, 600 McDonald’s stores, and that’s just one of McDonald’s regions. (Again the scale is quite amazing – could you imagine looking after even a 1,000 franchises let alone several thousand?).

According to China Daily, the Chinese Ministry of Commerce estimates the mainland’s fast food market to be worth almost $200 billion and growing at a rate of 16 per cent.

At the ‘Managing Opportunities and Challenges in China’ seminar, hosted by the Queensland Department of Employment, Economic Development and Innovation and the Hong Kong Trade Development Council, last week, other statistics were shared.

According to Hong Kong Trade Development Council Australia and New Zealand Director Bonnie Shek, there are nearly 300 million internet users and 641 million mobile phone users in China.

There are also 5.4 million private enterprises operating in China, illustrating a growing demand for business services and technologies. Does your franchise operate in those industries?

If expanding your franchise business into China is of interest to you, then you need to know that you’re not alone.

Austrade and the Hong Kong Trade Development Council are just two organisations willing to assist.

To hear the experience of Gloria Jean’s Coffees and their advice to other franchise busineess looking to move into China and other international destinations register for the Franchise Forum 2009: How the best thrive in any environment.

Gloria Jean’s Coffees Global Capability Manager Karli Furmage will share her insights on international franchising and promises to give you something to walk away with from the Franchise Forum 2009.

Read my blog next week for ‘China – Franchise Opportunity? Part Two’ to learn why some businesses use Hong Kong as a stepping stone into China.