October 29, 2024 Copyright ©️ 2024 by goldkeen International Patent & Trademark Joint Office
You might think franchise chains profit primarily from franchise fees,
but the real and often larger cash flow may actually come from supplying raw materials.
As shared earlier in “Franchise 5,”
there was once a waffle shop franchisee who was fined nearly NT$500,000 for sourcing materials outside the approved supply chain (“料” in Chinese slang: “跑料” = buying materials from unauthorized sources).
When franchisees consistently place supply orders,
it creates a significant stream of cash flow for the franchisor.
What is "Cash Flow"?
Cash flow is the lifeblood that can support massive businesses like JD.com.
To give you a sense of scale:
According to online data, JD.com had incurred continuous losses for over a decade, with a net loss reaching NT$15.8 billion in 2022 alone.
Let’s take a look at how Sharetea, owned by Lien Fa International Dining Corporation, strategically manages its intellectual property:
Aside from securing trademarks across multiple countries,
Lien Fa also holds a utility model patent in Taiwan titled:
“Composition for convenient and instant preparing tapioca ball drink.”
This indicates that the company’s global franchise expansion doesn’t just profit from licensing fees,
but also earns stable income through centralized raw material supply.
We won’t go into Taiwan’s utility model patents being registration-based,
but it’s worth noting that few beverage chain brands in Taiwan own patents.
For example:
- DaYuanZi filed a design patent for their plastic bottle shape.
- Chun Shui Tang applied for a design patent for their bubble tea glass.
So, if you already own a brand,
what would your ideal franchise expansion model look like?
Follow Goldkeen and bring your brand to the world! 🌏❤️
Click the button below to consult with us now,
or search LINE ID: @goldkeen,
or click the LINE link: https://line.me/R/ti/p/@goldkeen
