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This is the first of a two-case series (806-011-1 and 806-040-1). Franchising in China is a relatively new and growing phenomenon, which has only started to gain momentum since the 1990s. Among the franchising pioneers in China are the large and well-known food and beverage brands, such as KFC and McDonald''s. Less 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-born company has been a major competitor in the athletic shoes and sportswear sector globally, it made early entry into China using master international franchising, and, consequently, ran into trouble. The case describes franchising in China, the Athlete''s Foot Company, and the experiences of the Chinese master franchisee, Mr Rick Wang. Despite the initial success of this franchise system in China, Rick quickly ran into financial and operational problems. How should Rick effectively respond to these problems?