Franchise of Vietnamese brands just in initial stage: insiders
About 200 brands have been franchised in Vietnam over the last decade, but the franchise of Vietnamese brands is just in the initial stage at present, insiders said at a workshop in Ho Chi Minh City on May 4.
Retail brands are among the most franchised brands in Vietnam
They shared the view that although Vietnam is assessed as potential for franchising, businesses need strategies to succeed since it is very difficult to develop a franchised brand.
Nguyen Phi Van, head of the board of directors at Retail & Franchise Asia, said Vietnam’s franchise market will become more and more vibrant in the next few years with the landing of global and regional brands.
Some young Vietnamese startups with new brands have been asked to franchise their brands, which is a positive sign of Vietnamese brand franchising. However, they should gear up internal strength and a strong support system before franchising, she noted.
Le Thi Ngoc Thuy, Director of the IQ Plus Joint Stock Company and representative of brand Viva Star, said if enterprises lack a good strategy and thorough preparations when they begin franchising, they will encounter problems as franchisees become involved too much in the management and operation of franchised brands.
She took store design as an example, elaborating that if franchisees change store design too much, it may alter brand recognition.
Echoing the view, Pham Ngoc Liem, who owns brand LeeAndTee, said without a clear development strategy and preparations, it will be hard to reach consensus between franchisers and franchisees when they need brand restructuring.
Lawyer Ho Huu Hoanh from the Viet Franchise law firm recommended companies make franchise contracts with concrete regulations, have risk prevention measures, and keep franchised brand development policies consistent.
According to the Ministry of Industry and Trade, a number of foreign and domestic brands have been successfully franchised in Vietnam, especially in retail, cuisine, restaurant-hotel, and food-beverage.
The franchise of retail brands is forecast to continue expanding by 25 percent each year. Meanwhile, cuisine franchising will enjoy an annual growth of some 15 percent.