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Franchises offer ray of light during financial crisis
In the context of the spreading global financial crisis, franchises are considered a business model that is both effective and suitable to Vietnam ’s current economic situation.
In fact, franchises have been present in Vietnam for a long time. A survey conducted by the World Franchise Council in 2004 revealed that 65 franchises, mainly foreign brands, were operating in Vietnam .
Among the famous foreign brand franchises currently operating in the country are the US ’s KFC, Lotterra from the Republic of Korea , and two world-renowned fashion brands: Louis Vuitton and Gucci. Gloria Jean Café, the world’s second-largest after Starbucks, has also been present in Vietnam for some time.
According to Bao Anh, a lawyer from the August Bao Law Company, franchises help domestic businesses to adopt well-known foreign brand names and gain access to tried and tested business methods across the world at reasonable costs.
Not just foreign businesses, but also domestic ones are keen on franchise opportunities as they require relatively low start-up costs, said Do Huy Khanh, General Director of the Hanoi Glass Joint Stock Company, which is expanding its retail network through the offering of franchises.
Businesses promoting the franchise model have more competitive advantages than others in the same industry, he said, adding that franchises, on a large scale, help to reduce management and advertising costs, thus benefiting both the business and its customers.
The Pho 24 restaurant chain is one of the first Vietnamese businesses to be offered as a franchise overseas.
Khanh also said that Vietnam ’s franchise policy currently lacks a legal framework to protect franchisers and franchisees, he added.
While expressing his belief that the franchise business model would develop in Vietnam , William Edwards, Managing Director of the US ’s Edward Global Services Co., said that now is the time to introduce new brands into Vietnam , as regulations governing franchises in the country are extremely advantageous.
vna
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