AJISEN (China) Holdings Ltd said yesterday it would offer sub-franchising for the first time in China to accelerate expansion after net profit surged 90 percent in the first half of this year.
The operator of ramen and other Japanese-style dishes under the Ajisen brand in China is in final discussions with franchisees to open licensed restaurants in Hangzhou, Zhejiang Province, this year, a company official said during a teleconference in Shanghai yesterday.
"Our franchisees would take control of the city-based market instead of inviting individual investors for each store," the Ajisan official said. "The initiatives would better strengthen controls on management and logistics in the interests of our brand."
But other fast food chain operators like Yum! Brands Inc's KFC and McDonald's Corp have taken a cautious attitude to offering a franchising business in China, fearing problems in management and maintaining a certain standard of quality and service would ruin the brands.
Ajisen said in its interim financial report filed to the Hong Kong stock exchange yesterday that it will selectively launch a sub-licensing business in existing markets like Shanghai, Shenzhen, Hong Kong, Beijing and Chengdu over the next few years beside direct investment.
For the first half of this month, it reported a 90.6-percent surge in its net profit to 107 million yuan (US$14.2 million) from a year earlier while turnover rose 41.6 percent to 391 million yuan during the same period.
The sizzling profit was contributed by more than 150 restaurants in both China's mainland and Hong Kong.
Franchised restaurants are expected to be a new strategy for Ajisen to accelerate network expansion in the world's fastest growing consumer market.
It aims to open 10 licensed outlets by the end of this year.