Plenty of franchising opportunities in Vietnam: Vietnam Retail-Tech and Franchise Expo 2022
|Sean Ngo, a speaker at a conference on franchising held at the 2022 Vietnam Retail-Tech and Franchise Expo. (Photo: VNA).|
Sean Ngo, CEO and Co-founder of VF Franchising Consulting Company, said with the world having gone through a pandemic, a lot of countries have seen their GDP spiral down, but not Vietnam.
The country expects GDP growth of 7-8% this year, and per capita GDP reached 3,373 USD last year, he said.
Vietnam also has a relatively young workforce compared to other countries, such as the Republic of Korea and Singapore, and disposable incomes are set to rise in the coming years, he said.
It has a stable socio-political environment, he pointed out.
Thanks to these, Vietnam, especially Ho Chi Minh City, has become a great franchising market, he said.
“In 10 years it will be an exceptional market in Vietnam. Companies are now looking at the long term, and to be here in 10 years’ time they have to enter the Vietnam franchising market now.”
According to the Ministry of Industry and Trade, 280 international brands have franchises in the country.
CEO Ngo said, in comparison, Singapore has 500-600 international franchises and the Philippines has more than 1,000, and so Vietnam has a lot of space to grow.
Vietnamese companies seeking franchises should not only focus on the food and beverage sector but also others such as fitness, education and fashion, he said.
Fads do come and go, and so it is essential they do not bank on them, he warned.
In the current economic situation, if companies want to become franchisees, they should opt to become a master franchisee since it could fetch them big revenues.
A master franchisee is a company that has the right to open a branch of the original company in a country or region, owns the trademark and operational procedures and has the right to distribute them.
In return, they can collect royalties and other related fees from the sub-franchisees.
CEO Ngo said being a franchisee should help companies get a quick start to their business since franchisors provide training in management besides supply lines and goodwill.
A master franchisee supports its sub-franchisees with fees and other issues related to the franchisor, he said.
A franchisor has to know its target customers and the country’s culture, he added.
The conference was held late last week as part of the 2022 Vietnam Retail-Tech and Franchise Expo being held at the Sai Gon Exhibition and Convention Center in District 7.