Foreign and local investors and corporations have been focusing on the trend of franchise business in Vietnam.
The Vietnam market has always been a potential land for international brands’ franchise activities. These investors have obtained the required license to market famous brands such as Zara, Holiday Inn, McDonald’s Subway, Carl’s Junior, Sonic, Dunkin’ Donuts, Starbucks, Wendy’s and many others.
In 2017, Mitra Adiperkasa made a huge impact on the entire franchise market by launching Pull and Bear, Massimo Dutti, and Stradivarius in Ho Chi Minh City, and Zara in Hanoi.
The sales of these franchise businesses are spectacular and the two Zara stores in Ho Chi Minh City and Hanoi were ranked two of the best-performing franchise stores in 2017, thanks to their remarkable sales records.
Seeing the successful trend of franchise business in Vietnam, an increasing number of foreign investors and enterprises are looking for opportunities to penetrate the country’s booming franchise market.
This article will tell you more about how you can open a franchise in Vietnam.
Who can Open a Franchise in Vietnam
As of August 2019, the total number of both local and foreign franchise businesses in Vietnam were recorded at 213.
According to the franchising law in Vietnam, here are the eligibility criteria on who can open a franchise in Vietnam:
- Franchise business from a Vietnamese franchisor to a foreign franchisee
- Franchise business from a foreign franchisor to a Vietnamese franchisee
A franchise agreement must be signed and registered. Both parties will be fined if such an agreement doesn’t exist and isn’t registered.
Dossier Requirements and Procedure for Franchise Registration in Vietnam
Required documents for franchise registration in Vietnam are listed below:
- Power of attorney
- Franchise agreement
- Application form of franchise registration
- Previous year’s audited reports
- Franchisor’s business certificate
- Franchisor’s introduction
- Copyright or trademark certificate
- Approval document regarding the primary franchisor’s permission (if any)
Goods and Services Prohibited to be Franchised in Vietnam
Under the franchise law, some goods and services are prohibited for franchise business such as weapons, toxic minerals, addictive drugs, dangerous toys that are harmful to children, wild animals, and plants, imported scraps which pollute the environment, organized gambling, marriage broker services, adoption broker services, and many others. For a full list of prohibited goods and services, please seek consultation from Cekindo.
For goods and services subject to conditional franchising, investors or enterprises shall acquire a business license from the authority.
Conditions to be Met by Franchisors and Franchisees
- The franchisor’s business must be in operation for a significant period, i.e. a minimum of 1 year
- The franchisor must obtain written approval from the Ministry of Industry and Trade
- The franchisee must register their business in relevant sectors with regard to their franchise business in Vietnam
- For a master franchisee in Vietnam to sub-franchise to another party in Vietnam when permitted by the franchisor, the master franchisee must also have been operating for at least 1 year before the sub-franchising can be conducted
How Cekindo Can Assist
The franchise business in Vietnam is one of the most popular models that foreign companies choose to enter the Vietnamese market.
Through franchising, you can expand your business and earn profits in a shorter period, while retaining control over the brand.
Having over years of experience and involvement in company formation and franchise business in Vietnam, Cekindo’s registered consultants help domestic and international investors and companies to grow their franchise empire.
Contact us through the form below to discuss your plan for opening a franchise in Vietnam.