VF Franchise Consulting

Franchising to open up retail sector in 2014

Oct 10, 2011

HCM CITY — Franchising would become an indispensable business trend in Viet Nam as it would open up retail market further in 2014, lawyer Ho Huu Hoanh, director of the Viet Nam Franchising News Online (VietFranchise), said yesterday.

Speaking at a seminar in HCM City organised by the Viet Nam Trade Promotion Agency’s (Viettrade) HCM City Office, he said that the number of local entrepreneurs’ franchising activities was still low but was expected to grow in coming years.

Foreign commercial affairs, consultants and franchise associations are urging local retail and franchise players to consider Viet Nam a good market for franchising.

The franchising business model has brought benefits not only for franchisers but also for franchisees.

It is especially beneficial for small – and medium-size companies that want to start a new business in a short period of time with a modest amount of invested capital, but the promise of a stable income.

Franchisees can offer well-known brandname systems and receive training and technical transfer from franchisers.

However, the franchisers and franchisees need to identify the appropriate time to open a business and map out strategies to be successful in the market.

The franchising model is praised for its high effectiveness and low business failure.

Sean T Ngo, managing director of the Viet Nam Franchises Co Ltd said although most existing franchise operations in Viet Nam were in the fast food and beverage business, franchising has the potential to develop in other sectors such as education, healthcare, services and retail fashion.

According to the Ministry of Industry and Trade, there are about 90 franchise systems in Viet Nam.

“The rapid economic development, plus a demographic composed of young and dynamic consumers, are the main reasons for foreign firms to seek franchises in the Vietnamese market, he said.

Franchising is a good opportunity for foreign businesses to set up a retail system in Viet Nam as the country has many retail opportunities, including a food and beverage retail sector valued estimated at $33.7 billion last year.

At a seminar, VIETRADE called for domestic businesses to participate in the International Franchise Expo 2012 in New York on June 15-17, where they can meet hundreds of franchise businesses and thousands of entrepreneurs and business owners worldwide in sectors such as F&B, hospitality, health, services, construction, automobiles and products for children.

At the seminar, companies can learn more about franchising and opportunities to expand their business locally or across borders as well as explore established foreign brands that are ready to enter the Vietnamese market. — VNS

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