Currently all Western fast food chains have shown signs of success in expanding into Chinese markets. Rapid expansion has also spurred the growth of the fast food industry. GDP per capita has increased year after year, which allows more money to be spent on coffee before work or during lunch. Starbucks has proven to be quite successful by offering coffee at high prices. Starbucks plans to open 5,000 stores by 2021 and, thanks to its partnership with Alibaba for its coffee delivery service, will continue to dominate. There are approximately 350,000 Canadians residing in China, with proper targeting we can identify this market and expand new stores in the area. Elasticity of Fast Food Unfortunately for franchises, fast food is elastic. When we look at the income elasticity of demand, we can conclude that most people who buy fast food are individuals who earn a low income. The main reason why low-income families spend more money on fast food than any other family is due to the convenience and low cost of fast food. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Since people have to eat every day, we try to get as much as possible at the lowest possible cost. It can also be said that fast food is price elastic in the sense that franchising always struggles to acquire new/new customers. Fast food restaurants compete by adjusting/reducing the prices of their products and offering more at the same or lower prices than their competitors. This creates a cross-price elasticity of demand. Ultimately, the price elasticity of demand is small, because the smallest change in price creates a large change in demand. What franchises need to remember is that they have many competitors offering very similar products even at a very similar price. When there is a "product choice" or also called substitute, the products are elastic and when there is no substitute available, the products become inelastic. According to the researchers, fast food restaurants maintain the same price elasticity of demand in Canada as they do in China. This means that a price increase by Tim Hortons will most likely lead to a decline in sales if competitors' prices remain the same. Franchising performance analysis in the West According to statistics, China loves chicken but not so much pizza. This may be mainly why KFC is currently the leading fast food franchise in China. KFC even claims that they make more money from sales in China alone than from sales in the rest of the world. It is difficult to analyze the performance of other franchises in the West, as most franchises are still affiliated with the parent company. Therefore their productivity records and data are not specific to a particular region. This means that when we see an increase or decrease in revenue we cannot pinpoint the exact location/market that caused this effect. The only company that has completely separated its business is Yum. Yum Brands, Inc created a completely different division of Yum for China called Yum China Holdings Inc. The biggest competitor Tim Hortons will face in China is Starbucks. Starbucks has already infiltrated the Chinese market and currently has more than 2,800 restaurants in China. All the financial reports and posts accessible on the Internet all point in the same direction. All franchises that have established themselves in the Chinese market are facing a dramatic increase in revenue..