Table of ContentsIntroductionGeneral information available on franchisesFinancial and economic health of potential franchisorsCompetitionValue-added servicesCustomer needsPresence of IPR violationsLegal environmentAvailability of reliable partnersConclusionThere is a need to explore the dimensions which influence certain decisions -creation process of mid-sized Chinese hotels as they enter franchising. It is necessary to carry out an analysis of the advantages of franchising as a means of participating in hotel operations in the Chinese market. This encompasses all companies in the hospitality industry that are making their first entry or expanding their operations from their current Chinese base. Some of the biggest drawbacks, which also double as negative dimensions, include adapting to market preferences and tastes, acquiring reliable business partners, and protecting against IPR violations. Other dimensions include fierce competition, value-added services, legal environment and customer service. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”?Get the original essayIntroductionThe franchise, although it enjoyed a relatively obscure existence in the early 90s, has enjoyed meteoric success in recent years . This article shares some of the findings of reliable retrospective studies on franchising in China's mid-sized hotel industry. With more than 10% of its hotel industry having been taken over by franchise hotel chains, China currently has one of the fastest growing franchise industries in the world. Additionally, the country is the world's largest host to the franchise industry, with over 200,000 franchised outlets owned by nearly 2,600 international brands (Chao, 2008). Led by the historic success of brands such as Lining and Nike sportswear, China's franchise industry has seen an intriguing growth of more than 35 percent annually over the past decade. Hotel franchises gained popularity in China in the early 2000s, as companies in the sector began to reap the benefits of the model. Franchises act as strategic corporate alliances that facilitate an investor's ability to participate and operate in an established organization with a large customer base (Altinay, 2003). A business may also have other desirable characteristics, such as successful business plans, effective distribution systems, and financial commitments. Many world-famous hotels, such as Hilton and Intercontinental hotels, use the franchise system. Unlike China, the American hotel franchise sector is experiencing record growth of more than 70%. These operate as a chain of properties linked together by a single brand with central management (Hoover & Ketchen, 2003). The majority of American entrepreneurs who buy and open hotels realize the many benefits of being part of a single franchise. They include instant brand recognition for new properties and credibility from association with renowned entities. Whether in China or the United States, investors are faced with the urge to select the best franchise from a select list. They consider, among other things, issues such as location, target market, franchise cost, general reputation and financial situation (Hu & Meng, 2004). Here are the dimensions that influence the decision-making process of adoptingfranchises by mid-range hotels in China. General Franchise Information Available Choosing a hotel franchise in China requires an adequate amount of background research. This requires the creation of a foundation which will ensure the adequate analysis of the property in question. It is therefore essential for hoteliers to consider additional dimensions such as location and target market. Therefore, the majority of hotel owners in China would think twice before franchising with brands notable only in the Western world. Likewise, hotels seeking to identify with the middle class generally avoid franchises known for the rich and famous. This is reason enough why mid-range hotels in China avoid brands such as Serena, Intercontinental and Hilton Hotels (IHG, 2012). Franchise fees and other expenses, including general system reservation, required before franchising can be steep. So it's worth doing a background check on all the chains out there to see which one offers the best value for money when it comes to franchising. Start-up costs in China tend to vary widely depending on the value of the chosen brand and its global reputation. The global hospitality industry consists of a number of notable companies that offer services helping franchisees evaluate their affiliation options (Inma, 2010). When conducting their cost-benefit analyses, it is essential to consider how many new consumers a given affiliation can attract. Background studies can reveal areas that would expose a franchisee to unfavorable regulations hidden in the franchise agreement. Different hotel franchises have been found to impose unique policies that may affect the operations of an interested hotel property. A majority of franchises, for example, generally require a standardization service which might not be to the advantage of potential owners (JLJ, 2007). Likewise, most franchises typically impose regulations related to the prominent placement of the franchise logo, in a way that could affect the branding of the given property. Furthermore, previous research reveals that immature termination of the franchise agreement usually results in heavy penalties. Likewise, the legal documents associated with franchising and licensing often protect the involved franchisor from court battles. Therefore, the above dimension should always be considered when selecting a hotel franchise in the People's Republic of China (Jackson, 2006). Financial and Economic Health of Potential Franchisors Affiliation with a given hotel franchise has historically proven to be a lifelong investment. The economic health of potential franchisors should be considered before entering into affiliation agreements. This dimension is important insofar as it reveals the long-term reliability of the commercial agreement entered into. The future of a franchise, for example Premier Inns, and its growth potential are key dimensions when evaluating a possible affiliation. These function as the centralized benefits that the brand would offer to its new hotels (Paswan & Kantamneni, 2004). Globally recognized franchise contracts act as long-term agreements; generally extending over several years. This implies that the long-term viability of such a franchise agreement between, for example, Premier, Accor and Ibis, is essential. It has also become useful for hotels to contact potential franchisees anduse available online resources when evaluating Chinese hotel franchises. The decision to adopt and affiliate with a given brand would likely have a huge impact on the future of a hotel property. Therefore, careful consideration of the above dimension and effective due diligence would help in forging a strong business relationship (Zhang & Pine, 2005). journey. The hotel chains that are growing so quickly are taking advantage of these tourism booms. In fact, franchises are emerging and joining on a daily basis. One of these players is the Budget hotel franchise: Hantings Inns. It is a channel founded by Chinese business tycoon Ji Qi almost ten years ago. Currently, the company owns more than 100 hotel properties across China, under four major brands (Mak, 2008). The boss of Hantings Inns expects his business empire to have become the world's largest hotel franchise by 2020. As the competition would have it, the franchise takes a sufficient amount of inspiration from the major low-cost Western chains which cater to business travelers such as Accor, Ibis and Premier Inns. The competitive nature of China's hotel industry has led to the growth of other low-cost hotels. They all aim to keep things simple so that customers have plenty of choices at affordable prices (Tang, 2004). Entrepreneurs therefore choose franchises that stand out for investing more in their rooms, thus developing a competitive strategy. it's profitable. The increased scale and pace of China's development over the past two decades has caused global investors to watch the market with interest. The number of people traveling to and from China has increased to more than 60 million per year. China is therefore currently the leading source of franchise investors in Asia. This implies that international hoteliers are slowly but surely moving into China to exploit the hotel franchise industry (Zhang and Ray Pine, 2005). For example, Accor attempted to enter the Chinese market with the Grand Mercure, locally known as Mei Jue. Similarly, the Marriott hotel chain has developed an investment plan that would double the number of its affiliated hotels over the years. All of these franchises target the average Chinese traveler in an effort to gain loyalty. The loyalty that brands struggle to build translates into the loyalty of Asian travelers around the world (Li-Tzang & SooCheong, 2010). However, foreign investors have struggled to compete with companies like Hantings for China's mid-market. National hotels would find this an interesting dimension to consider when seeking to enter into an affiliation with national or international franchises. However, the good news would be that with the large number of partners to choose from, the cost of franchising will definitely start to come down. This seems to favor local brands because they are faster, more cost-effective and know their Chinese consumers better (Yung, 2007). Value-added services Individual hoteliers and their customers have their own expectations when choosing between hotel brands and products. This is based on relevant historical backgrounds of various business experiences of the parent brands in the past. As a buyer, the independent hotelier seeks maximum value for their intended affiliations. Therefore, they are not limited to a low level of satisfaction but to the ultimate joy of the newly acquired transaction (Phillips, 2006). Over the years,Hantings and other franchises have set the benchmark for partner services in major Chinese cities. Likewise, Holiday Inn hotels have developed value-added services such as the inclusion of a Chinese-language call center and website for partners and potential customers. Currently, Holiday Inn Hotels and Resorts boasts of being one of the best mid-range hotel brands in China. The emergence of Chinese Hotel Awards has also influenced the growth and development of franchising such that only the best brands are selected (Moore, Ratneshwar, & Moore, 2012). Upscale hotels such as Intercontinental Hotels have also helped provide benchmarks for value-added services in mid-range hotels. Currently, mid-sized franchises are doing their best to ensure that their brand promises are delivered to their customers and potential affiliates. After studying the nature of relationships and investments among the Chinese people, potential partners show a strong affinity by selecting only those brands that meet the demand (JLJ, 2007). Hotel management and franchising in China proved much simpler before the 2008 Beijing Olympics because there were few choices. However, hotel demand has increased with an increase in room inventory and disposable income. Over time, new hotel chains emerged, leading to the emergence of incredible franchises. The most visible factor concerns operating costs, particularly regarding labor and energy (Tuunanen, 2011). As these two aspects have increased significantly, they have had a great effect on the nature of the hospitality industry. The major challenges in China remain maintaining team motivation and using the hotel's value-added services to meet it. It is difficult for individual hoteliers to build great relationships with franchises that emphasize quality of service and overall hygiene. It seems quite encouraging that individual hoteliers are looking for valuable franchises with excellent work ethics (Su, 2006). Much research and training must be conducted to verify each franchise's commitment to success. Beijing, China's second largest city, has seen new hotels and developments on beaches and luxury areas. The challenge, however, remains the competitive environment which has given rise to many hotels. This has led to fierce competition in value-added services such as additional advertising and room service (Xiao and Wang, 2009). Additionally, such competition provides franchises with the opportunity to rethink their competitive offerings when it comes to new and innovative products. These are challenges related to hotel management and affiliation in China. However, if they can find the desired partners, hoteliers will be able to provide excellent value-added services that will retain customers (Miles, 2006). Customer Needs The Chinese hotel industry includes many faces. For workers, it is a source of employment. For owners, hotels constitute a veritable empire that must continue to move forward. For guests, this includes everything from their beds during travel to some of their temporary accommodation while on vacation. While meeting the needs of the public can be difficult, achieving this in the hospitality sector involves a number of challenges (Noone and Mattila, 2009). In addition to learning about the opportunity to provide exceptional customer services, franchisors also seek partners whopreach the skills needed to meet the needs of each client. Beyond hotel decor and amenities that help meet guest needs, nothing should be able to ruin the franchisor experience than poor customer service from the franchises trying to accommodate them. In such strategic times, mid-sized hoteliers typically discuss the key characteristics of effective customer service and activities that exceed their guests' expectations (Okoroafo, Koh, & Liu, 2010). They also care about finding out how their franchise decisions can affect their business and their personal lives. All affiliated parties know that one of the best ways to provide excellent customer service is to communicate effectively with the national customer base. Logically, this dimension exposes the need for franchises to develop a technique for informative diagnosis of consumer needs (Qui, 2004). Using this as a guide to selecting potential partners, hotel franchises then do their best to identify their and their customers' individual communication techniques to achieve the best possible satisfaction outcome. Depending on the form of franchising in question, proponents of such alliances argue about the likelihood that customers will remain allied with brands with which they feel comfortable. Adopting a franchise approach therefore enables each hotel to have the best workforce that adapts to various changes in customer tastes and preferences. Franchising also allows hotel franchises to adapt more effectively to changing customer regulatory requirements (Moore, Ratneshwar, & Moore, 2012). Presence of IPR violations This is the biggest challenge currently facing the Chinese business environment. The increase in IPR violations has slowed down the decision-making process when it comes to hotel franchising. Even though clear regulations on intellectual property rights have been put in place, their enforcement continues to weaken by the day. The responsibility for exploring and tracking different types of trademark violations lies squarely with property owners (WTTC, 2006). Many Chinese hotels have fallen prey to franchise copycats who use logos to attract customers. They find it important to evaluate the true details of franchises before entering into an affiliation. Most major channel brands also encounter many imitators who are racking up billions under their brands. Some of these imitators and fraudsters are usually former franchisees whose contracts are terminated because they do not meet established standards (Saunders & Riordan, 2009). Although trademark registration does not guarantee most franchisors recourse in the event of IPR infringement, failure to comply with these rules would lead to disastrous results. China stands out for granting logos and trademarks on a first-come, first-served basis. This has given rise to scenarios where individuals register other organizations' trademarks and demand due fees for their use (Pine, 2003). Individual hotels would like to inquire about the existence of such fake franchise agreements in order to seek out the best affiliations. It would be important for each hotel to register its brands, trademarks and domain names before entering into a franchise agreement. They should also do the same, including registering patent rights, before entering the Chinese hotel industry (Zhu, 2008). Legal environment The government's first attempts to develop guidelines.