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Thursday, April 12, 2001, updated at 16:17(GMT+8)

McDonald Not to Open Franchises in Mainland in Two Years

News media lately report that McDonald will change its traditional business mode, it is considering to open franchises. But sources from McDonald's Asia Pacific headquarters say that McDonald will not operate franchise business in China's mainland within two years.

McDonald mainly adopts methods of cooperation with local enterprises or individuals and of purchasing or leasing real estate in China's mainland. Its Asia Pacific Headquarters said that it will not develop franchise business within one or two years in China's mainland and because its business here is different from that in other regions in the world.

It is not a mere rumor McDonald will be allowed to develop franchise business. News reports say hat McDonald will open franchises in latter half of 2002. According to analysis, the move adopted by McDonald is compelled by the consideration that its arch-rival KFC has outstripped it. By the end of 2000, KFC's outlets in China's mainland have reached 400, far exceeding McDonald's 340.

Anther survey shows that 27.8 percent of citizens in 20 big and medium-sized Chinese cities claim they are KFC's regular visitors, surpassing McDonald's 18.2 percent. Facts indicate that KFC has become the No.1 fast food provider in China's mainland. In early 1993, KFC launched its franchise restaurant and now the number has been up to 20.

McDonald does not regard that it has lost to KFC. Lai Linsheng, general manager of McDonald's China northern area division said that "I don't think you open more, it means your business is better". Although some people in south China love KFC, but in the north, particularly in Beijing, McDonald still occupies a conspicuous advantage.

According to McDonald's plan, its Beijing outlets will reach 100 by 2003, Lai expressed the belief that they have confidence in fulfilling the task. Since it established its outlets in Beijing in 1990, McDonald has cooperated with Beijing Agriculture, Industry and Commerce General Company for more than a decade, so far, no sign indicates that it will open franchises in Beijing.

By PD Online staff member Li Yan

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Sources from McDonald's Asia Pacific headquarters say that McDonald will not operate franchise business in China's mainland within two years.

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