Vietnam - Country Commercial Guide
Franchising Industry Sector
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According to the International Franchise Association, Vietnam is one of the most promising franchise markets in Southeast Asia. Vietnam is home to approximately 100 million people, is the world’s 15th most populous nation and the 3rd largest in Southeast Asia. 70% of the population under the age of 40, 2022 GDP growth reaching 8%, rising incomes, and an emerging middle class are generating an increase in consumer-driven sectors. The addition of market liberalization creates the ideal environment for foreign companies to approach and expand their market share through franchising.

Franchising began in Vietnam in the 1990’s with the introduction of well-known fast-food chains like Jollibee (Philippines, 1996), Lotteria (South Korea, 1997) and KFC (USA, 1997). As of September 2023, the Vietnamese Ministry of Industry and Trade (MOIT) reports that there are more than 310 foreign brands registered as franchising businesses in Vietnam. This includes fast food, bakery, coffee, drinks, and restaurants, accounting for over 50% of total franchise contracts signed. Most franchisors come from the USA, Australia, South Korea, Singapore, Thailand, Japan, Hong Kong, Canada, and the Philippines.

Increasingly, Vietnamese businesses have been exploring opportunities available through franchising. Some active Vietnamese businesses that operate in a franchise model are Golden Gate Restaurant Group (with 22 food brands, and almost 400 restaurants), Redsun ITI Corporation (with 13 food brands and more than 200 restaurants), Highlands Coffee (with more than 600 stores), Trung Nguyen Coffee (with more than 700 stores), AHA Coffee (with more than 70 stores), Café Cong (with more than 70 stores), Ong Hung (Mr. Hung) Pho (with 30 restaurants), FPT Shop (with more than 600 stores) and FPT Pharma (with 1000 stores). Many of those are expanding overseas in Singapore, Malaysia, Japan, South Korea, China, and the United States.

The Commercial Law of Vietnam (Section 8 of Chapter VI) in 2005 is the primary legal legislation that provides very broad information for franchising arrangements. Later, the passage of Decree 35/2006/ND-CP (amended by Decree 120/2011/ND-CP in January 2016), outlined a more specific legal framework for franchising.

According to these regulations, a foreign franchisor is permitted to franchise in Vietnam without establishing a business entity in Vietnam. However, a foreign franchisor is required to have been in business for one year prior to franchising in Vietnam (article 5 of Decree 35). A Vietnamese primary franchisee must also have been in business under the foreign franchisor for one year prior to sub‐franchising in Vietnam. A foreign franchisor registers its activities with MOIT, while a local franchisor registers with the provincial Department of Industry and Trade. The franchise agreement must be in Vietnamese and may be translated into English.

The Vietnamese Government issued Decree No. 8/2018/ND-CP in January 2018 to amend some business conditions, including franchising, regulated by the MOIT. Under Decree No. 8/2018/ND-CP, Article 5 of Decree No. 35 was revised removing the requirement for foreign franchisors to register with MOIT. However, the registration requirements in other articles in Decree 35 were not revised, requiring additional clarity from MOIT on these requirements.

Leading Sub-Sectors

Vietnamese consumers often associate Western brands with quality, an affluent lifestyle, and product reliability. They are responsive to high-end, well-known, premium brands of products and services. At present, most franchised businesses in Vietnam are focused on fast food and retail, but a significant potential exists for a wide range of companies to enter the Vietnamese market. Franchise opportunities are gradually becoming available across the nation in a growing range of brands and sectors.

In Vietnam, franchise business in beverages, especially in lemon and milk tea are very popular.  A recent study show that Vietnam ranked the third largest market for bubble tea in Southeast Asia with turnover of USD362 million in 2021.  Dingtea, TocoToco, Tiger Sugar, The Alley, Phúc Long, and Gong Cha have developed early in Vietnam and have gained a large market share. However, as the beverage industry has a relatively short product life cycle, businesses tend to build chain stores fast in the early stage. In the fast-food sector, the market is currently competitive with several popular local and foreign brands. With strong consumer awareness of the U.S. food and beverages, U.S. franchise brands including McDonalds, Subway, Starbucks Coffee, Burger King, Carl’s Jr, Pizza Hut, Domino’s Pizza, Popeye’s Chicken, Texas Chicken, Dunkin’ Donuts, Z Pizza, Baskin Robbins, and Coffee Bean and Tea Leaf, have become key players in the market. It is important to consider food delivery services’ increasing popularity in Vietnam.

Vietnam’s Ministry of Industry and Trade estimates that food & beverage consumption accounts for 15% of GDP and is increasing year by year. According to Vietnam Report, revenue in this segment is projected to reach USD678m in 2025 and is expected to show an annual growth rate (CAGR 2021-2025) of 4.98%. In addition, user penetration is expected to hit 17 million by 2025. With strong Vietnamese consumer awareness of American food & beverage, U.S. fast food franchisors are key players in the market. Besides the fast-food sector, the franchise convenience store model has also gained traction with various brands including Circle K, Family Mart, and Seven-Eleven expanding quickly in large cities. Circle K opened its first store in December 2008 and now it has expanded to more than 400 stores in Vietnam.

Retail, education, entertainment, healthcare, beauty-care, children’s services, and lifestyle-oriented businesses are other growing franchise segments.

Opportunities and Challenges

There are several factors that have contributed to the growth of the franchise market:

  • 60% of the population is under 35 years of age, and per capita GDP is around USD4,000 and on the rise. Over the next decade, 36 million more consumers may join Vietnam’s consuming class, defined as consumers who spend at least USD11 a day in purchasing power parity (PPP) terms, according to recent McKinsey Global Institute research. American brands have a reputation for quality, especially in southern Vietnam. Best prospects for American franchisors include fast food, business services, health and nutrition, education services, health care, children’s services, cleaning and sanitation, hospitality, fashion, entertainment, and convenience stores.
  • According to, finding licensee candidates with established infrastructure, experience running a business, and capital is a problem. Retail space has become extremely expensive in Ho Chi Minh City and Hanoi.

Although franchising can be very lucrative in Vietnam, there are significant challenges:

  • Vietnam’s unique street food culture: Vietnam has a rich street food culture with diverse dishes, unique flavors, and healthy ingredients. This culture can create difficult competition for foreign imports.
  • Convenience:  Street vendors are ubiquitous and can be easily found on every corner, particularly in cities.
  • Competitively low cost: The average cost of typical Vietnamese meals is between USD2 to USD3 which can be one-third or even one-quarter the cost of foreign franchise meals. Local firms are wary of new concepts that require high investment despite the economic recovery after COVID. They are also reluctant to invest in a new brand that does not have a strong track record in the region.
  • Real Estate Challenges:  Finding suitable and affordable locations can be difficult in the face of rapidly emerging modern retail channels and retail development in Ho Chi Minh City and Hanoi.

Respect for intellectual property. U.S. franchisors should register their intellectual property, including URLs and websites, and be prepared to take legal action against IP violators. Additionally, it is worth noting that many local franchises may not have a full understanding of brand value/integrity and/or legal regulations relating to franchising. Thus, it is crucial to identify and conduct due diligence with potential partners to determine their suitability and financial capability.


For more information about Vietnam’s franchising sector, please contact:

  • Ms. Ngan Thai, Commercial Assistant

U.S. Commercial Service - Hanoi, Vietnam



  • Mr. Thao Nguyen, Commercial Specialist

U.S. Consulate General in Ho Chi Minh City