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Fast food giants licking their lips over partnership options

Sean T. Ngo, managing director of VF Franchise Consulting, a leading franchising and licensing consulting company, told VIR that by partnering with larger and more experienced food companies in the region, domestic fast food brands were able to expand regionally and internationally, as local companies had the raw materials and the international partners had the global connections.

In a recent partnership of this kind, Vietnammm.com, Vietnam’s leading food delivery website, shook hands with the Philippines’ Jollibee Foods Corporation over delivery services in Vietnam.

Accordingly, Vietnamese customers can order Jollibee’s full menu through the Vietnammm.com portal and vice versa.

Founded in 2011, Vietnammm.com has over 40,000 order forms every month from over 1,200 restaurants.

Last year, the website was acquired by takeaway.com, one of the world’s biggest food delivery websites.

The deal will allow Vietnammm.com to take advantage of takeaway.com’s platform which includes iOS, Android, and Windows Phone apps. The acquisition was watched closely by Vietnammm.com’s two most significant rivals, Foodpanda and Eat.vn.

Significantly, Jollibee foods, which is known for its fried chicken, hamburgers, and pizza and pasta restaurants, outsells McDonald’s and KFC in the Philippines. By the end of last year, the company was operating 2,301 restaurants in the Philippines and 612 stores overseas-62 of which are in Vietnam.

Ngo added that a few years ago, Jollibee and Highlands Group shook hands as they partnered up to expand the Highland Coffee and Pho24 brands in the Philippines. The partnership has helped to strengthen both chains in Vietnam, allowing them to expand successfully through a very large and successful F&B partner.

Huy Vietnam, Vietnam’s largest operator of local Vietnamese food restaurant, has recently secured US$15 million in equity financing from private equity firms in Singapore and Hong Kong.

Two partners are Singapore-based Templeton Emerging Markets Group and Welkin, a Hong Kong-based private equity firm.

According to the information from Huy Vietnam, the Series C round of funding will be used to support the company’s network expansion in Ho Chi Minh City, Hanoi, and other cities in Vietnam.

Operating since 2007, Huy Vietnam is one of Vietnam’s first international, professionally managed restaurant companies serving traditional Vietnamese food prepared from family recipes.

It already runs over 70 restaurants under the Mon Hue VietnamComExpress, and Pho Ong Hung brands, serving affordable and authentic local Vietnamese cuisine.

Huy Vietnam plans to continue opening more of these restaurants during the course of 2015. It also intends to expand its geographical footprint to include restaurants in Nha Trang, Hue and Da Lat in the second half of 2015.

Vietnam’s fast food market is expected to grow in revenue to US$670 million by 2015 according to the Business Monitor. This includes both Vietnamese and foreign fast food, shared Ngo.

“We are also witnessing a larger group of small Vietnamese brands that are exploring the possibilities of franchising in Vietnam and other regions, beyond the familiar names such as Pho 24, Highlands Coffee, Wrap and Roll and Mon Hue,” added Ngo.

Source: Vietnam Investment Review

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