Foreign franchises eye lucrative Vietnam market

With its high economic growth rate and population of over 90 million, Vietnam is becoming an increasingly attractive destination for international franchising businesses, especially in the food and beverages sector.

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Executives from leading food and beverage, education and services franchises from Singapore, Hong Kong, Taiwan, Japan, and the US met with executives of Vietnamese firms at an international business matching event in Ho Chi Minh City on August 28. The event was organised by VF Franchise Consulting.

Speaking to the media, Akihito Koga, managing director of Japan Food Culture Pte Ltd, which helps Japanese brands expand abroad, said he was “optimistic” about the franchise market in Vietnam due to its population and economic performance.

His company has a Vietnamese partner, and since business is good it wants to find more partners for many Japanese clients, he said.

Now it is looking for potential partners for three brands: Machida Shoten, the second biggest ramen brand in Japan; Mennya Kokoro, which offers dry ramen; and Pronto, a café brand.

“We expect our partners to have funds to invest in three to five restaurants,” with each restaurant needing a minimum investment of US$300,000, he said.

He hoped to find a business partner who “can get a good location” because location is quite important [for restaurants] and has “good connections with locals”.

Andy Hsu, general manager of Taiwan-based Reng Feng International Food Co, Ltd, said he wants to introduce to Vietnamese partners four out of his company’s six food and beverage brands.

One of them is Cha Ji Tang, which sells many kinds of bubble tea. It makes its own bubbles with a machine that is displayed at each of its outlets unlike other operators, who keep their bubble making a secret, he said.

Hsu said this is the first time his company is planning to take its brands abroad.

The company plans to itself open a shop under each brand, with the first scheduled to open next month at the Takashimaya shopping mall in HCM City’s District 1, before franchising them.

Explaining the rationale behind this, he said: “We are still new, customers do not know us.”

Sean T.Ngo, founder and CEO of VF Franchise Consulting, a leading franchising consultancy in Southeast Asia, said figures from the Ministry of Industry and Trade show that over 200 brands have registered as foreign franchises in Vietnam.

But Thailand and the Philippines have over 1,500 each, and so there is still a lot of potential for growth in the franchise business in Vietnam, he said.

VNS/VNA

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