VietNamNet Bridge - Brands franchised in Vietnam so far have been mostly in the fields of education, health care and food & beverages. However, other industries are eyeing Vietnam, considered to be a highly lucrative market.

With the young population, improved living standards and the rapid development of the middle-class, Vietnam proves to be a good destination point for foreign brands which are looking for partners to franchise.

Coffee chains such as The Coffee Bean & Tea Leaf and Gloria Jeans and fast food chains such as McDonalds, Lotteria, KFC, and Domino Pizza are well-known to many Vietnamese. The chains succeed thanks to improved incomes in urban areas. 

As Vietnamese have more money, they also want to spend more on non-food services as well, such as gym & fitness centers, English schools, high-school exam preparation centers, health care services and environmental services.

Yvonne Chan from the Australia Trade Promotion Chambe said Australia has the number of franchising brands per head higher than any other country in the world, even though the franchise concept was initially raised in the US. She herself now helps some Australian brands to look for Vietnamese partners to franchise. 

Khoo Tech Kim, director of VF Franchise Consulting, representing Retail Food Group, said the group is looking for opportunities to expand its business in SE Asia, especially in Vietnam, for five brands of hotels and bakeries.

There are more than 1,000 franchising brands in Australia with more than 19,000 shops and agents.

Besides food & beverage, education brands are also heading for Vietnam. The Edge, a center which helps students prepare for the world’s top universities, is looking for partners to develop teaching establishments in Vietnam. 

Based in Hong Kong, The Edge is now in China and South Korea. 

Meanwhile, the US-based Mosquito Squad believes that its service – preventing and fighting insects – would be useful in Vietnam because of Zika and other diseases transmitted through mosquitoes.  

Sean Ngo, director of VF Franchise Consulting, when describing the prospects of the Vietnamese market, said the middle-class in Vietnam will be increasing rapidly because of the high GDP growth rate of 6 percent per annum.

However, investors need to have powerful financial capability and good administrative skills to own a franchise. Some international brands require capital of $2-3 million or $10-15 million from investors to become agents or strategic partners. 

Kim Chi