Market Intelligence
Franchising Bakeries Confectionary Products China

China Growth in Food and Beverage Franchises


  • Most F&B revenue in China is generated by non-franchised establishments, leaving an opportunity for growing franchised brands.

  • According to the China Chain Store & Franchise Association, China’s food and beverage (F&B) sector reached approximately $595 billion in 2019, a 7.8 percent increase over 2018.

  • U.S. quick-service restaurant (QSR) franchises in China remain strong but face increased competition from Chinese franchises in such categories as leisure drinks and “hotpot” restaurants serving takeout meals.

  • Franchisors may find less competition in China’s smaller and less developed Tier 3 and Tier 4 cities.
  • The graph below compares the growth rate of new franchise stores between the larger and smaller cities in China. The stories are grouped by category: formal dining, leisure drinks, local-flavor snacks, hotpot and BBQ, Bakeries and desserts, fast food, and leisure snacks.

    Annual Increase in New Franchised Stores in China: 2018-2019
Graph of increase in number of franchise stores in China 2018-2019
Growth Rate Comparison Between Tier 1 & 2 and Tier 3 & 4 Cities


  • Economic Slow Down:  The F&B restaurant sector is one of the industries hardest-hit by the COVID-19 pandemic. Almost all restaurants experienced a sharp revenue decrease in the first quarter of 2020.

  • Local Franchise Chains: Chinese brands have taken the majority of the market in the Leisure Drinks, Local-flavor Snacks, and Hotpot & BBQ subsectors.

Best Prospects:

  • Bakeries and Desserts: Opportunities exist for U.S. bakery and dessert concepts, including breads, cakes, and sandwiches, in China’s Tier 3 and Tier 4 cities.

Additional Resources

Major Companies:  Local and regional products and franchise brands gaining popularity in China.

  • Bakeries & Dessert Shops: Paris Baguette 
  • Leisure drinks: Yidiandian Tea 
  • Leisure snacks: Zhengxin Chicken Steak 
  • Local-flavor snacks: Juewei Duck Neck 
  • Hotpot & BBQ restaurants: Xiaolongkan Hotpot and Haidilao

Leading Consumer Rating Apps: Chinese-language Android/iPhone apps that review restaurants.

  • Dianping
  • Koubei
  • Meituan

Key Organizations: Chinese business associations.

Major Trade Shows: Events listed are supported by the U.S. Commercial Service China Office. 

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