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Vietnam franchise market holds great potential for F&B

Five successful international F&B franchises have outlined why they see Vietnam as the next major potential market to seek partners and franchisees.

Senior executives from Little Caesars, Presotea, Element Fresh, The Boiling Crab, and Grimaldi’s participated in a franchise discovery day in Hanoi last week, organised by Ho Chi Minh City-headquartered, regional franchise consultancy VF Franchise Consulting.

Other speakers affirmed Vietnam is an attractive market for franchises: within 10 years, from 2007 to 2016, Vietnam has witnessed the arrival of 164 foreign franchises bringing 201 brands. F&B franchises comprise 40 per cent of those, including KFC, Lotteria, Jollibee, Pizza Hut, Starbucks, McDonald’s, Domino’s Pizza, Popeye’s Chicken and Texas Chicken.

Sean T. Ngo, CEO of VF Franchise Consulting and international representative of The Boiling Crab said the main reason why foreign franchises coming to Vietnam is because they see the potential to grow here. With a population nearing 92 million and growing by 1 per cent annually, 60 per cent are aged under 30. And Vietnam is expected to maintain a high GDP growth rate throughout the next decade.

“That’s why there are a lot of international franchises coming to the market to provide their unique set of products and services,” said Ngo. “Similar products and services may be offered by local businesses, but the local competitors normally do not have the same standards and success model that is proven like international brands that are here today,” he said.

Pizza chain Little Caesars, for example, doubled its franchise store network over the past six years. Little Caesars plans to double it up in the next four years in potential markets as Vietnam with franchise partnership up to 10 years.

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Another pizza chain Grimaldi’s, which offers traditional coal-fired brick-oven pizza, is operating 49 successful pizzeria restaurants in the US.

Healthy dining restaurant chain Element Fresh owns nearly 40 restaurants in the highly competitive China market.  

Cajun seafood chain The Boiling Crab is reporting annual sales of as much as US$6.2 million per restaurant.

Presotea from Taiwan has opened 350 bubble-tea stores in five countries within five years of launching franchising.

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Waewpen Piemwichai, registered foreign attorney from Tilleke & Gibbins, warned that while the Vietnamese franchise market is attractive, the franchise registration process usually takes two to four months and trademark registration in Vietnam can take up to 18 months to complete. However, franchisees can operate their business as long as the trademark registration has been applied for.

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