Vietnamese businesses expand overseas through franchising

Vietnamese businesses expand overseas through franchising

Franchising has emerged as a key strategy for Vietnamese businesses seeking to expand into new markets and reach customers in other countries.

Coffee chain Three O’Clock is opening five outlets in India this quarter. Many Vietnamese firms are looking into franchising to expand into foreign markets. — Photo cafef.vn

Franchising has emerged as a key strategy for Vietnamese businesses seeking to expand into new markets and reach customers in other countries. 

In February, mother and baby care brand Care With Love launched its first franchise outlet in Cambodia. 

After attending an international exhibition in HCM City, two Cambodian entrepreneurs signed a franchise agreement following months of negotiations.

They plan to open 10 outlets in five years. 

The franchise is doing well in terms of sales, and this initial success is expected to help the brand expand to Dubai and elsewhere in the Middle East.

Logistics company Gozo signed franchise agreements with three Thai partners, Allcon, Crown Creations and World Trade.

Its competitive edge is in low costs it has achieved through streamlined operations, transport partnerships and real-time management technology, and this allows rapid expansion.

It next has plans for major markets such as South Korea, Japan, the US, and the EU.

F&B start-ups such as Three O’Clock, HappiTea and Phở’S have gone global. 

Coffee chain Three O’Clock is opening five outlets in India this quarter, alongside expansion to other South Asian markets as well. 

It aims to open 100 outlets within 10 years, capitalising on young consumers’ growing taste for coffee and iced drinks.

The company has also secured exclusive franchise deals in the UAE, Saudi Arabia, Kuwait, Bahrain, Qatar, and Oman.

According to market research company Technavio, the global franchise market is forecast to grow by 9.58 per cent annually to reach US$4.38 trillion by 2027.

But fewer than 15 Vietnamese brands have expanded abroad. 

Industry insiders highlight gaps such as a shortage of skilled labour, limited legal knowledge, a lack of standardised processes, and unstable supply chains.

Experts think more government and trade support is needed to help firms standardise models, improve capacity and build stronger brands abroad. 

But with sufficient backing from stakeholders, the path for Vietnamese firms to conquer international markets could open up. 

Bizhub