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Franchising the choice of more and more business people
Some 90 brand names, both Vietnamese and foreign, have been franchised with over 800 franchised shops set up so far, according to the Ministry of Industry and Trade’s Legal Department.
In previous years, people heard about the appearance of foreign brand names in Vietnam under the mode of franchising, such as Jollibee, KFC, Parkson supermarket system, Hard Rock Café, or The Body Shop. In recent years, they have realized that many Vietnamese famous brand names, like Trung Nguyen Café, Pho 24 and Kinh Do Bakery have also franchised to foreign countries.
To date, most franchise contracts have been carried out in the fields of fast food, restaurants, fashion, training, real estate and retailing.
According to Pham Dinh Thuong, a senior official of the Ministry of Industry and Trade, in the first 11 months of the year, his ministry received application for business registration under the mode of franchising from 39 foreign brand names. These were mostly from developed countries like the UK, the US, Canada, Switzerland, Italia and Australia.
Also during that time, the ministry has certified registration for three Vietnamese brand names to franchise to foreign partners, including Fashion T&T (Duc Trieu private company), Pho 24 (noodle soup) (Pho Hai Muoi Bon Company) and Café Bobby Brewers (Vu Giang Company).
Analysts said that it is now a growing tendency for foreign businesses, on one hand, to register to franchise in Vietnam, on the other hand, apply to set up legal entities in the country. The legal entities will provide products and manage Vietnamese companies which cooperate with them under the mode of franchising. The experts have warned that this will put a hard pressure on Vietnamese small shops.
Nguyen Tri Thanh, managing director of the Vietnam merger and acquisition network, considers franchising to be one of the important strategies which allows businesses to gain growth thanks to advantages in brand names of the franchiser.
Economists have predicted a boom in business franchise in the near future. Meanwhile, the Vietnam Franchise Association has predicted that the turnover of the branch will continue increase rapidly to reach $36 million by 2010.
VietNamNet/TBKTVN
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