Franchise in Vietnam -Finished

7/29/2019 Franchise in Vietnam -Finished

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Group 2:

NguynTh Thanh Ngnon Giang Sn

Nguyn Minh QunPhmNgcDimTrnThun TnTrnNgc OanhNguynngHt

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Lecturer: Dr. Chris Quach


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I.General information about FranchiseWhat is a franchise?

A form of business organization in which afirm which already has a successful productor service (the franchisor) enters into acontinuing contractual relationship with

other businesses (franchisees) operatingunder the franchisor's trade name andusually with the franchisor's guidance, inexchange for a fee.

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Types of franchises

There are THREE basic types1. Product Franchises: distribute goods and

use name & trademark

2. Business Format Franchising: a proven

method provided for operating business

3. Manufacturing Franchise: right to

manufacture product and sell to public

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How Franchising Works

Thinkingabout

buying intoa franchise

system

How franchising works

What fees are involved

What is expected of you from thefranchise company

Buyer: A FRANCHISEE ==============Seller : FRANCHISORThe franchisee must follow certain:

- Rules and guidelines already established by thefranchisor- Pay an ongoing franchise royalty feeFranchising has become one of the most popular waysof doing business in today's marketplace

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ADVANTAGES

Franchisor: good opportunity to marketproducts in new markets with considerablecost & licenses fee

Franchisee: benefit from brand name andbusiness model that take long time tobuild up

Customers: services and goods brought

nearer to them

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RISKS

Franchisor: risk of having reputationruined by incompetent franchisees

Franchisee: in a precarious position in theevent of a dispute cause the agreements

are highly skewed in favor of thefranchisers

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CHOOSING A FRANCHISEOPPORTUNITIES

1. Market Trend

2. Territory Coverage

3. Company Support

4. Exit Strategy

5. Franchise Business Plan

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II. Franchise in Vietnam

1. Overview of Franchise in VN

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Multinational Companies

Domestic firms

According to the countrys Ministry of Industry and Trade, up to 70foreign brands have registered their franchising business in Vietnamand franchising growth is up 30%.

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Government support

The 2005 Commercial Law

Government Decree 35 of 2006

Circular 09 of the Ministry of Industry and

Trade of 2006

Decision 106 of the Ministry of Finance of2006.

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STRENGTHS

It is new & potential

Vietnamese regulation for

franchise effected on 2005

Government open doors for100% foreign companies

Other factors : fast growth,

mass young consumers,

higher average of income

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OPPORTUNITIES

Domestic demand for food and drinks from

foreign increases-> franchising is predicted togrow 50% on 2014

Potential to broaden franchise in other industries

Domestic firms join into franchise market more and

more

-> Franchise activities get hotter

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THREATS

Domination of foreign companies in franchise

network

Franchisors can lose their brand if the franchisees

follow exactly instruction and obligations offranchisors

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Documents

Franchise in Vietnam -Finished