F&B market bustling with series of franchise contracts
Dec 2, 2015
The Ministry of Industry and Trade (MOIT) has allowed 137 business people and 148 brands to enter the Vietnamese market over the last eight years, including 42 brands in fast food,bakery, coffee, drinks and restaurants, which accounted for 43.7 percent of total franchise contracts signed.
The F&B field attracts foreign franchisers. The second most attractive field is fashion with 19 brands, or 19.3 percent of franchise contracts signed, followed by education & training (17 brands, 14.1 percent), convenience store (3 brands, 2.2 percent), and other retail brands (15 brands, 10.4 percent). Meanwhile, the remaining 10.3 percent of contracts were in the fields of pharmacy, chemicals, real estate brokerage and storage.
McDonald’s, Baskin Robbins, Haagen-Dazs from the US, Pizza Hut, Kentucky Fried Chicken and Burger King from Singapore, Lotteria, Caffe Bene, Tour Les Jour, BBQ Chicken from South Korea, Oasis, Karren Millen and Warehouse from the UK and Bulgari, Moschino, Rossi from Italy have all become familiar to Vietnamese.
Winston Lim, director of Bizlink, noted that the percentage of successful franchise deals in F&B is higher than other business fields. Vietnam is a vast market with high population and high percentage of young people, who easily get used to new services and products.
Pham Thi Huong, a franchise expert from Arocking, agrees that the franchise in F&B is getting more and more popular in Vietnam.
“It is very attractive because investors won’t have to spend too much money, effort and time to build brands,” she explained.
“Meanwhile, the risks for startups can be minimized because there are successful business models for investors to apply,” she said. “Franchisees can also ‘inherit’ experiences and business organization ‘know-how’ from franchisers and enjoy the good reputation of the chains.”
Caffe Bene is a typical example. Though arriving in Vietnam later than other brands such as Starbucks, The Coffee Bean & Tea Leaf, Cafee Bene has had successes. In 2014, it opened three shops and the figure rose to 10 in 2015. It expects to have 15 shops by 2016 and 300 by 2018.
Kim Sun Kwon, CEO of Caffe Bene, told the localpress at the brand debut ceremony late last year that F&B was not hurt by the economic recession. He believes in the success of the plan to open 120 shops a year.
Analysts predicted that the franchise market would see a boom in the time to come. Vietnam, which has welcomed many brands from Asia, would see brands from Europe and Latin America.
According to Nguyen Phi Van, chair of Retail & Franchise Asia, which represents many foreign franchised brands in Vietnam, about 40 brands, 90 percent of which belong to businesses from Europe and Latin America, are seeking opportunities in Vietnam.