At the signing ceremony of the franchise deal between BGF Retail and its Vietnamese partner (Photo: BGF Retail)

The move is part of the expansion plan in foreign markets of CU operator - BGF Retail.

The company said it will enter Vietnam’s market after the signing of a master franchise contract with CUVN, a Vietnam-based convenience store operator backed by local Vietnamese companies including retailer SNB.

Under the master franchise deal, BGF Retail will share its brand and business knowhow in convenience store operation with its Vietnamese partner that will be responsible for investment and operations.

BGF Retail also entered Mongolia last year under a master franchise deal with a local company. The RoK operator expects its experience in Mongolia would help it gain a strong foothold in the Southeast Asian market which has high growth potential.

BGF Retail and CUVN aim to open their first Vietnamese outlet in the first half of 2020.

Park Jae-gu, chief executive of BGF Retail, said the company will continue overseas expansion by making forays into fast-growing emerging markets. 

GS25 to franchise for business expansion

The GS25 store chain has changed its brand identity to include two colors---white and blue---instead of the original blue, red and orange. In this file photo, a GS25 store in HCMC’s District 7 uses the new brand colors

South Korea’s GS25 convenience store chain has announced that it will adopt a franchising plan with its business partners early next month, two years after entering the local market by establishing a joint venture with Son Kim Group.

The franchising plan is part of the store chain’s strategy to expand its operating network in the country, said Nguyen Hong Trang, general director of GS25 Vietnam, at a meeting with business partners on September 26 in HCMC.

The move is also intended to leverage the available land sites of private investors, especially in the context of surging costs for leasing land to retailing businesses over the past two years, said Trang.

The chain is set to open 250 stores on a franchise basis in the next three years and expects to have 2,000 units in the next decade.

The GS25 chain operator will franchise three store sizes to its franchisees, depending on their locations. The first covers 65-70 square meters, the second measures 100-120 square meters and the last covers 150 square meters. The operator will study each location, which is worth less than VND2 billion each, to offer appropriate products.

The head of GS25 Vietnam added that the amount of investment needed for each store remains low, equivalent to one-third or one-fifth of the required capital for franchising deals offered by other international brands.

As for time needed to recover the investment and minimum profits for franchisees, the representative of the chain predicted a gross profit margin of 25%. The franchiser will provide additional support if the profits earned in the first year are lower than expected.

The GS25 store chain joined the local market in early January last year. With 50 stores in HCMC, the chain is managed and operated by the joint venture between GS Retail and Son Kim Group.

The retailer plans to expand its business northward by launching three new stores in Hanoi in December. SGT/VNA

Minh Tam

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