Financial Company Sinopec Gas Station Franchise Financing Risk Management Research

Nowadays, prompted by the economic globalization and financial liberalization, China’s financial industry has been experiencing a series of profound changes. And the spirit of innovation changes will have an impact on the development of the financial industry both in the organizational forms of financial institutions and in the innovation of financial products in China in the future. With the development of approaches for financing and investment, such as housing property, qualitative of inventory goods, the managerial authority and charge authority of commodities and other specially permitted managerial authorities of commodities also gradually come into the sight of people, and they are increasingly being undertaken in financial activities. As early as the 1990s, our financial institutions began trying franchise financing. After more than ten years of practice, relevant laws and regulations in China also have developed and been improved a lot, which promote the operation of franchise financing in practice. As a relatively new management direction in finance risk management, the franchise financing risk management is still worth discussing and is debatable both in theory and practice.As non-bank financial institutions, financial companies have become an important constituent of the financial system in China. And with the special characteristics of its financial services, financial companies are playing an important role in supporting the development of group economy. The carry out of franchise financing is an attempt of product innovation and service innovation in financial companies, which satisfies the demand for financial services of enterprise groups, and also put forward requirements of higher risk control management for financial institutions. But the matter is, how to identify and evaluate the risk in franchise financing of accounting company, and propose the corresponding prevention measures? Some suggestions and references can be found from the risk management theory of commercial banks and the enterprise risk management general framework theory.The basic procedure of risk management of financial companies is basically the same as the main procedures of risk management of commercial banks. It includes the following aspects:risk identification, risk measurement, risk monitoring and evaluation, risk control and risk report. However, on one hand, because financial companies are non-bank financial institutions which belong to group companies and its business environment is particular and limited, accounting companies have their own characteristics in pre-investigation for loan and risk measurement. On the other hand, as enterprises, financial companies must regulate their own management activities according to the "enterprise internal control basic norm" and its supporting guidance in risk management aspects. In the analysis of the loan business risks, the accounting companies have their own characteristics in the structure of corporate governance, the control of business activities and the joint venture background of non-wholly capital subsidiary companies.From the financial companies’perspective, this thesis analyses the feasibility and risk management measures of franchise right for management pledge loan. According to the risk management theory of commercial banks, in the aspects of risk identification, risk measurement, risk monitoring, reporting and risk control, the thesis discusses the overall risk management for the gas station franchise pledge loan in terms of its potential in credit, make and operation. Using the whole framework of enterprise risk management theory, in the aspects of control environment, risk assessment, control activities, information and communication and supervision, this thesis discusses the identification and control of the operational risk of the credit business in the financial company. In the aspects of law, market demand, this thesis studies the feasibility of franchise pledge loan of financial companies, and briefly introduces the procedure of those loans. Finally, according to the business process of financial company gas station franchise pledge loan, this thesis identify potential credit risk, market risk, the operation risk, policy risk and the operating risk of an enterprise which makes loan, and then puts forward some corresponding preventive measures.