Gold jewelry enterprises should continue enhancing scrutiny during franchisee admissions, standardizing business processes and institutional development, said the China Gold Association in response to the recent sudden closure of a Beijing-based franchise of China National Gold Group Gold Jewelry, one of China’s central enterprises in the gold industry.
The gold enterprises should conduct regular store inspections on a regular basis to reveal potential risks and enact effective rectification measures. It is as important to provide franchisees with legal and ethical training to ensure the standardized operation of businesses and promote the healthy and orderly development of the gold jewelry industry, it said in a statement.
The incident underscores the importance of responsible business practices within the gold jewelry sector to maintain consumer confidence and industry integrity, it said.
Some clients reported in early March the sudden closure of a franchise store of China National Gold Group Gold Jewelry in Beijing that had made it impossible for them to redeem the gold they had purchased and entrusted to the store for safekeeping.
The police investigation started soon after that.
The company extended its apologies to consumers affected by the closure and pledged to uphold consumer rights. It announced its initiative to provide interim compensation to affected consumers until the conclusion of legal proceedings and the final determination of responsibilities.
According to the association, the franchise model has become prevalent in the gold jewelry industry in recent years, playing a pivotal role in its growth and expansion.
However, the industry should take the recent incidents of franchisee closures as a warning sign to continue strengthening supervision over franchisees to ensure the stable operation of gold brands, it said.