Franchising is a form of business in which a firm with a successful product or service (the franchisor) enters into a relationship with other businesses (franchisees) to operate under the franchisor’s trade name.

Solid prospects

Last year the franchising market surged 30 percent, with more than 530 new franchisees and the transfer of 800 brands including 100 local brands.

According to global franchisers, Vietnam has all the hallmarks of a franchise haven: a young market, high economic growth, and stable political system.

The Vietnamese government has passed the Franchising Decree, which is expected to help bolster the business in the country.

Han Guang Chou, deputy general director of Han’s Singapore Pte Ltd, a Singapore-based fast food brand, said the company had standardized its model for overseas expansion and Vietnam was its first destination.

McDonald’s Restaurants of the US plan to enter Vietnam early next year after it becomes a full WTO member.

Other big Singapore brands like Charles & Keith shoes, Celia Loe Chapter 2, and fast food makers Bread Talk, Cavana, and Koufu surveyed the Vietnamese market last year and plan to look for franchisees.

KFC opened 17th restaurant in Vietnam earlier this year and plans to top 100 by 2010.

Pioneers

In Vietnam the country’s leading coffee manufacturer Trung Nguyen was in the vanguard of developing the franchising system.

It opened its first franchise in HCMC in 1998 and there are now more than 1,000 in Vietnam and some in Singapore, Tokyo, and Shanghai.

The company is planning to enter the US, Germany, and Australia.

Another example is the Pho 24 restaurants selling Vietnam’s most popular traditional dish, pho, or noodles.

Pho 24 has opened more than 12 outlets in Vietnam, Indonesia, and the Philippines and the figure is expected to go up to 100.

The restaurant has completed final preparations for launching the first Pho 24 in the Republic of Korea next December and in Japan in March next year.

Reported by Nguyen Hang – Translated by Ha Viet