McDonald's Corp (NYSE: MCD) has allowed franchising in Shanghai and
Shenzhen to step up its business in the most developed cities of the
world's fastest growing major economy, Yicai.com reported.
The Golden Arch said it opened franchising in China's two richest
cities on December 10, 2013. The move came as the company's revenue and
earnings turned out worse than expected after being hit hard by sluggish
global economic recovery.
Last year's bird flu outbreak in China has taken its toll on Yum!
Brands Inc's (NYSE: YUM) KFC business in the country, but had a limited
impact on McDonald's. Industry watchers say McDonald's is taking
advantage of KFC's setbacks to gain a greater market share.
On the other hand, franchising will help offset slower organic growth
and reduce operating risks, a marketing strategist told Yicai.
McDonald's first allowed franchising in China in 2010 in Jiangsu,
Fujian, Sichuan and part of Guangdong provinces. It currently operates
around 4,000 restaurants in the country.
Up to 80% of McDonald's 32,000-plus global locations are franchises.
See McDonald's stock market performance:
http://finance.yahoo.com and type in the ticker symbol (MCD). Plot against YUM. What can you learn about McDonald's?
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