Eyeing a business opportunity with the launch of direct cross-strait weekend charter flights today, Shanghai-based C-Store Chain Ltd (上海喜士多便利連鎖) plans to attract Taiwanese convenience store franchisees to China by offering incentives such as waiving franchise fees and offering 100 percent allocation to franchisees of gross profits.
“The highlight of C-Store Chain’s franchise rule is that, unlike most convenience store chains, we will not charge franchise fees so that we can expedite store openings and utilize Taiwanese management experience,” Kaufmann Wei (魏正元), president of C-Store Chain, said at a press conference yesterday.
Wei said C-Store Chain was able to waive the franchise fees because of its group purchasing agreement with hypermarket chain RT-Mart (大潤發) in China, which helps lower its costs by between 3 percent and 4 percent.
C-Store Chain currently has a total of 350 convenience stores in China and plans to expand the number to 1,000 by the end of next year. Wei said the company would likely reinstate franchise fees once it had reached that goal.
The company said the high density of convenience stores in Taiwan has made it difficult for local franchisees to survive.
Statistics provided by the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed that local convenience stores’ sales in the first quarter of this year grew 2.5 percent year-on-year, far below the sales growth of hypermarkets at 14.3 percent and department stores at 4.6 percent.
“The statistics indicate that domestic demand in Taiwan will become a challenge for our convenience store operators and franchisees in the future. As a result, they will need to seek new opportunities for development,” Wei said.
President Chain Store Corp (統一超商), the nation’s largest convenience store operator which runs a total of 4,785 7-Eleven stores nationwide, plans to open its first 7-Eleven store in Shanghai by the end of the year.
Wei said C-Store Chain welcomes the new competitor as there are currently “only” 1,000 convenience stores in Shanghai, which Wei said was “very few.”
C-Store Chain is a Taiwanese-funded convenience store chain based in China.
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