According to the World Franchising Council (WFC), there have been 70 franchising systems in Vietnam. Most of them are foreign trademarks, such as Dilmah, Swatch, Jollibee,KFC ,Lotteria, etc. To wait for Vietnam Joining WTO in front, many great internation
The international groups awaiting
Ms. Do Thi Bich Hue, director of Au Viet company, applied to get franchise from McDonald’s, a well-known Fast Food chain in the world, but failed. At that time, McDonald’s did not really see the need to enter the Vietnamese market, so it demanded $1 million per store plus the franchisee had to import raw materials from America. Now, everything has changed. McDonald’s is just waiting for the opportunity when Vietnam officially become a WTO member to penetrate the market. It awaits the post-WTO time when the Vietnamese franchising legal framework is improved. Pizza Hut, the famous store chain that belongs to Yums Brands group of America, one out of ten world-leading franchising systems, is at the end of its preparation stage to get into the Vietnamese market.
Many big chains s in America and the EU wanted to use Singapore as a base to land Vietnam by means of franchising, said a business-promoting specialist in Ho Chi Minh city. Among them is Manchester Club, a company practicing in the field of fashion and restaurant that exclusively exploits the image of the famous English football club, Manchester United. Meanwhile, franchisors who are already in Vietnam are doing their best to increase their market proportion. KFC had 14 stores in 2005, and 17 in the early 2006. The company disclosed its ambition to reach the number of 100 stores throughout Vietnam by 2010. Lotteria are operating 9 stores and Dilmah has opened a series of tea houses which have ruled the roost in Hanoi Deputy director of the Planning and Investment department of Ho Chi Minh city, Mr. Luong Van Ly said that day after day he received invitations to join conferences on the internal markets of some countries in the region and the world. Many groups of professional American investors have enquired about conferences and seminars to study the Vietnamese market. This reflects the great interest by international groups in the Vietnamese market.
Domestic enterprises not yet fully aware of franchising “ Many Vietnamese trademarks are now strong enough to offer franchise, including Coop Mart supermarket, Nha Xinh interior supermarket, An Phuoc fashion, Hoan My hospital, and so forth”, said Ly Quoc Trung, director of Pho 24 company, a successful franchisor in Vietnam .“However, domestic enterprises are still keeping themselves out of the wave for many reasons.” Trung commented that a strong trademark is not enough. To be successful in franchising, a company needs to have good administrative management . For Trung, this is the most important factor but the weakest point of Vietnamese enterprises. Thus, despite knowing that franchising is the most effective way to keep and expand their market proportion, many supermarkets, restaurants, and stores are not brave enough to adopt it.
Besides, the holding company has to standardize all processes to franchise. Take Pho 24 for instance. All steps involved, from preparing raw materials, recipe doses, knowingv how to cook, knowing how to carry, to designing interior furniture, lights, lamps, and so on have been standardized by the company for franchisees to apply without changing. Many domestic enterprises are unable to do that. So, this remains a big obstacle for Vietnamese enterprises to get over in order to adopt franchising.