IP News from duytho.com

Franchise explosion in Vietnam

IP News from duytho.comAccording to foreign experts’ assessments, Vietnam is an ideal market for retail activities. In the coming years, this activity will explode with trademarks inside and outside Vietnam via the franchise method.

According to Mr. Terry Ghani, Director of TGA-Malaysia, a leading expert in marketing in Malaysia, Vietnam is considered an untapped market. With its stable polity, high rate of literacy, young market with 70 of the population under the age of 30 and increasing purchasing power, Vietnam has many advantages for franchise implementation.

 

Mr. Luke Kim, Director of A.S Louken of Singapore has said that most of the trademarks from around the world, such as Charles & Keith and Chapter 2, have been successfully franchised in Singapore. Some fast food trademarks as Break Talk and Cavana are planning to aim at Vietnam. “The Vietnamese market has begun maturing to implement franchise inside and outside of Vietnam”, Mr. Luke Kim remarked.

 

According to, Mrs. Vu Kim Hanh, Director of Investment, Trading and Promotion Centre of Ho Chi Minh City (ITPC), Wall Mart Corporation of America has just come to Vietnam to have a discussion with ITPC about investment in the Vietnamese market in the form of franchise. 

Up till now, three local enterprises have fulfilled franchise status. They are Trung Nguyen Coffee, Kinh Do Bakery and Pho 24; Additionally, six foreign retailers: Bourbon Group, Metro Cash & Carry, Lotteria, KFC, Medicare, and Parkson, are all now operating in Vietnam.

The trademark Pho 24 has established 19 local shops and 1 shop in Jakarta (Indonesia), of which 8 shops have been franchised. The franchise fees are US$7,000 inside Vietnam and US$12,000 outside Vietnam respectively, not including 3 of total turnover of each franchised shop.

Franchise has had a history for hundreds of years in Europe and 30 years in Asia. In Vietnam franchise has appeared in recent years, however, according to many businessmen this is a “trend” and will definitely break out in the years to come.

Mr. Ngo Han Dan, Director of Trung Nguyen Coffee, observed that franchise will be an indispensable trend for economic integration. About 3 – 4 local trademarks are going to be franchised in 2006.

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