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Businessman sees franchise opportunities in VN during crisis period
The Asiawide Franchise Consultants Managing Director, Albert Kong, has arrived in HCM City, Vietnam to attend a franchise workshop on December 18. The franchise expert of Asia believes that the current crisis is a golden time for franchise businesses.
Albert Kong said that Asiawide Franchise has discovered that in many countries, the number of franchise cases genderally increases during crisis periods.
With 15 years of experience in the field, Kong believes that in order to have success in franchising, one needs to choose the right time. Many years ago, the fast food provider, Kentucky, landed in Hong Kong but it failed to conquer the market because local consumers at that time were unfamiliar with KFC fried chicken.
However, several years later, Pacific, also a fast food brand name was successful in the Hong Kong market. During the Asian crisis, 10 years previously, many of Hong Kong’s younger population went abroad to study, and they brought the western lifestyle back with them when they returned, including the habit of eating fast food. Pacific jumped into Hong Kong’s market exactly at this time.
Kong has anticipated a franchising boom in Vietnam during the upcoming time, saying that franchising proves to be the choice of many businessmen during difficult periods. According to Kong, there are several reasons for his argument.
First, the economic crisis will cause an increase in unemployment, and a lot of investors will be looking for new business opportunities, and they will see that franchising will help reduce risks for businesses. Second, as the stock market continues to fall, and banks find it difficult to access bank loans due to the banks’ policies on tightening credit, franchise will be a good choice for investors.
Kong said that the biggest problem currently in Vietnam is the intellectual property management in franchising.
Meanwhile, a lot of Vietnamese businesses are also thinking of franchising their brand names, especially during the time when Vietnam will open its retail market, slated for early 2009. However, a lot of existing problems are making this unfeasible.
Ngo Le Thu, Deputy General Director of Saigon Trade Corporation (Satra), said that the corporation is considering franchising some of its well known brand names.
For example, Vissan (Vietnam Import – Export Corporation), a well known foodstuff producer and supplier in Vietnam, which has a wide distribution network throughout the country, proves to be suitable for franchising.
However, Thu said that most of Vissan’s shops need to be upgraded to become operational under a standard model. “That explains why Vissan still cannot undertake franchise deals right now, as it still needs professional consultant,” she said.
The problem of Agrex, a farm produce producer and exporter, is different. Agrex has been exporting products to European countries, but it still does not have a domestic distribution network. Therefore, in order to make franchising possible, Agrex needs to build up a standard shop network first.
Business Director of Satra, Dao Ngoc Tam, said that in current conditions, franchising proves to be the optimal choice for many investors, especially those who are just starting their business. Tam said that Satra has decided to sign a contract with Asiawide Franchise on the latter’s franchising consultancy service.
VNE
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