A Trung Nguyen Legend Coffee Shop. Vietnam has become an attractive franchising destination, especially in sectors like food and beverages, education, health and nutrition, business services, hospitality, fashion, beauty and skin care, entertainment, and convenience stores. — Photo emimeholdings.vn

Nguyen Tuan, deputy director of the HCM City Investment and Trade Promotion Centre (ITPC), told the ‘Start your own business with franchise model’ seminar in the city last week: “With its positive economic growth rate last year and a population of nearly 100 million, the future of franchising looks promising in Vietnam.”

Tuan said: “Besides bringing huge benefits to franchisors, the model also minimises the risk to franchisees.”

According to the International Franchise Association, Vietnam has become an attractive franchising destination, especially in sectors like food and beverages, education, health and nutrition, business services, hospitality, fashion, beauty and skin care, entertainment, and convenience stores.

According to Nguyen Phi Van, founder and chairwoman of Retail and Franchise Asia and founder and executive member of World Franchise Associates, said the franchising industry contributes 5-10 per cent of GDP in countries where it is developed.

In the US, where it originated, the figure is 5.1 per cent, and it is 10 per cent in Canada, 9 per cent in Australia and 9.7 per cent in South Africa, she said.

In Asia, franchising is strongest in the Republic of Korea (7.8 per cent of GDP), followed by Malaysia (6.3 per cent), the Philippines (5 per cent) and Singapore (3 per cent).

In Malaysia it has been chosen by the government as a long-term strategy to develop SMEs by exporting business models and brands instead of exporting goods.

After the pandemic passes, franchising would have the potential to develop strongly, she said.

But, to be successful, franchises would need to make sure they have good business plans and management.

Vietnamese franchisees invested a lot of money to buy a franchise but not to build a management team to run it, she revealed.

To have a sustainable model, businesses must focus on brands and the business model, the operating platform, personnel training, supply chain, and technology platform, she added.

In Vietnam, well-established franchises include Trung Nguyên Coffee, Phở 24, T&T, Cafe Bobby Brewers, Kinh Đô Bakery, Wrap and Roll, Café Cộng, AQ Silk, and Highland’s Coffee.  VNS

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