Many factors come into play. First, the labor force in China is less experienced at fast-food than in the US, said Joel Silverstein, founder of East West Hospitality Group, a restaurant consultancy. This makes it difficult for local restaurant hands to pull off complex fast-food businesses like KFC and McDonald’s, although simpler operations, such as scooping out Baskin Robbins ice cream, are more manageable.
Foreign tech companies’ bette noir of weak intellectual property protection also rears its head in franchising. “The US system is that you find a guy to run a store,” said Silverstein. “In China, I say good luck: You have McDonald’s and then next it will be McDuggles.” Take UFO, a would-be KFC in Beijing, which uses President Obama wearing Colonel Sanders’ ribbon tie for a mascot.