Vietnam becomes franchise magnet for foreign enterprises

By Dam Tuan July 28, 2016 | 05:27 am PT

Vietnam's franchise deals have risen by up to 20 percent so far this year.

Vietnam is welcoming foreign franchises in various sectors including food and beverage, health care and food processing from Europe, North America and Asia.

Research by VF Franchise Consulting shows that Vietnam has nearly 150 international franchises, of which the food and beverage sector dominates with well-known global brand names such as McDonald’s, Starbucks, Coffee Bean & Tea Leaf, KFC, Lotteria, Jollibee and Burger King.

In 2016, Vietnam’s franchise deals have risen by 15 to 20 percent compared to last year.

vietnam-becomes-franchise-magnet-for-foreign-enterprises

Starbucks and other F&B brands are heading to Vietnam under franchise investment deals.

The consultancy firm said that Vietnam has become an active market for commercial franchises over the last five years. Following the food and beverage sector, services and health care are emerging as potential markets for foreign enterprises with the rapid development of cities like Hanoi and Ho Chi Minh City, where demand is increasing.

VF Franchise Consulting said that Vietnam is a promising market for not only traditional sectors but also businesses involved in cosmetics, cleaning and laundry with plenty of locations and partner options for overseas enterprises.

Nguyen Phi Van, founder of Retail and Franchise Asia, said that franchise trend has been developing strongly in many Asian countries of which Vietnam is a fruitful destination and attracting huge attention of foreign investors.

Member states of the Association of Southeast Asian Nations (ASEAN) are expected to have approximately 120 million middle and high income earners by 2020. This is the emerging economy region with the fastest growth rate in the world. Some countries like Malaysia, the Philippines or Thailand have national strategy in franchise and support from government.

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