Master International Franchising in China: The Case of The Athlete's Foot (A)

Franchising in China is a relatively new and growing phenomenon which has gained momentum since the 1990s. Among the franchising pioneers in China are large and well-known food and beverage brands such as KFC and McDonald’s. Less well known, but equally important, are the non-food and beverage retail and service industries which have also made inroads in China using franchising. One such example is The Athlete’s Foot. This American company has been a major competitor in the athletic shoes and sportswear sectors globally. It made an early entry into China using international master franchising and, consequently, ran into problems that were typical for companies expanding internationally using franchising. Case A describes franchising in China, The Athlete’s Foot company, and the experiences of the Chinese master franchisee — Rick Wang. Despite the initial success of this franchise system in China, Wang quickly ran into financial and operational problems. Case B illustrates what Wang did to rescue the company from its problems.