VietNamNet Bridge – Developing restaurants is believed to be the most lucrative business field and the quickest way to earn money. This explains why more and more investors have injected money there.

Restaurants mushrooming

Japanese styled Kichi Kichi at Vincom building in HCM City is considered one of the most successful restaurants. With the retail premises area of 150 square meters and the rent of $40 per square meter, large enough for 70 seats, the restaurant earns VND1 billion every day.

The attractive profit in the business field is the reason behind the appearance of a series of restaurants and chains of restaurants recently, namely Sushi Bar, Tokyo Deli, Coca Suki, Sakura and Oshima, large scaled and heavily invested.

Mocgroup proves to be the business which developed most strongly in 2013. Besides the chain of six rice restaurants in HCM City and one restaurant in Hanoi, the business owner is developing three other chains – China Deli, Chili Thai and Rom BBQ.

The 12 restaurants of the investor have been set up at Crescend Mall, Diamond and Bitexco buildings, and on the big roads in HCM City such as Hai Ba Trung and Le Thanh Ton.

Some days ago, local newspapers reported that MK Group’s Deputy Managing Director Somchai Hanjitkasem has stated the group would invest VND50 billion in the next three years to open three restaurants in Vietnam.

How to make money?

In principle, investors open more shops or restaurants only when their business go smoothly and they want to optimize the profits. However, in some cases, as analysts noted, investors still have to open more shops even though they incur loss.

It is not easy to obtain the franchise contracts from the world’s well-known food brands. The sums of money Vietnamese investors have to pay to obtain the contracts depend on the business models they plan to follow, fine dining, casual dining or fast food.

Johnathan Hanh Nguyen, President of Imex Pan Pacific (IPP), revealed that the IPP had to spend $200 million in total on the fast food franchise contract.

The fact that investors have to pay big sums of money to obtain the right to do business with the well known brands puts a hard pressure on them. The investors have to open more restaurants and shops to optimize the profits and minimize the operation.

That is why, though the real estate market remains frozen, retail premises have always been in high demand. Especially, the retail premises in the central districts of 1 and 3 have always been very “hot” with sky high rents.

The rents at the big shopping malls like Diamond, Parkson, VIncom, Tax and Zen Plaza are about $40-60 per square meter. A retail premises with the area large enough to contain 100 customers on Le Quy Don street in district 3 can be leased at no less than $5,000 per square meter.

The landlords would require $12,000 per square meter for the larger retail premises.

While some investors start up with franchise contracts, some others decided to develop their own brands. Golden Gate, the owner of Kichi Kichi, Sumo BBQ, Ashima and Vuvuzela, is an example.

DNSG