Eastman Kodak Company says it will upgrade 80% of its more than 8,000 traditional photo express franchises in China over the next three years to digital outlets.

China Daily reports that Kodak has seen more than 1,000 franchises close in the past two years in China. The increasing use of digital cameras has caused a sharp decline in the global film developing business.

Some franchisees in China have diverted their investment into other profitable fields while some just closed their traditional stores as they couldn't afford to upgrade to digital facilities.

Kodak, which has about 1,000 flagship stores nationwide, said it will first transform its flagship stores to digital ones.

The flagship stores, which cost more to set up and feature more services, are also more well funded compared to other franchised stores, Kodak said.

The company is also planning to rely on the flagship store mode to subfranchise more small digital printing stations dubbed eKex.

Kodak is hoping the new eKex store, which requires a 10-square-meter large store space and a 88,000 yuan (US$10,900) initial investment, will draw more small investors and repeat its successful franchising model of Kodak Express outlets in the past.