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 retailing and service industries which also made inroads in China using franchising. One such example is the case of the Athlete’s Foot Company. This American company has been a major competitor in the athletic shoes and sportswear sectors globally. It made an early entry into China using master international franchising and, consequently, ran into problems that are often encountered when companies expand 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.(For Case A)

What did Wang do as he prepared to become a master franchisee? What factors in Wang’s preparation led to the initial success of the franchise, and what factors resulted in the subsequent crisis?