Market Intelligence
Franchising Vietnam

Vietnam Franchising

The franchising model in Vietnam has expanded to more than 262 registered foreign brands in multiple sectors since its arrival in this country in the 1990s.

Since its arrival in Vietnam in the 1990s, the franchising model has expanded to more than 262 registered foreign brands in multiple sectors, over 50 percent of which is F&B, bringing a relatively rapid venue with controlled levels of investment and at a reduced risk. Additionally, Vietnamese businesses such as Café Cong (Plus Coffee), Ong Hung (Mr. Hung) Pho, ThaiExpress, and The Gioi Di Dong (The Mobile World) have had significant success in the country, while several others like Wrap and Roll, Pho24, and Trung Nguyen Café are currently discovering new opportunities overseas. 

There are several challenges that new-to-market franchisors should consider in Vietnam: 
-    Local companies may have a lack of thorough understanding of brand value/integrity and/or legal regulations thus hindering the due diligence process.
-    Local companies are cautious about the high investment concept and reluctant to brands not having a strong track record in the region.
-    Difficulties in finding suitable and affordable locations despite its popularity in HCMC and Hanoi
-    U.S. franchisors shall initiate IP registration and be prepared to take legal action against violators.
-    U.S. franchisors should consider adapting to local culture, habits, and tastes to guarantee their success in the market.

In the past, Vietnamese law did not provide a specific basis for franchising business but the passage of Decree 35/2006/ND-CP (amended by Decree 120/2011/ND-CP in January 2016), provided a legal framework for franchising. 

Accordingly, a foreign franchisor does not need to establish a business entity, yet it must be in business for at least one year prior to its operation in Vietnam. A Vietnamese primary franchisee must also have been in business with the franchisor for one year prior to sub‐franchising. 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. However, Decree No. 8/2018/ND-CP amending Decree 35 has only removed registration requirements with MOIT for foreign franchisors thus requesting additional clarification from MOIT on these requirements.

Leading sub-sectors
Vietnamese consumers are responsive to high-end, well-known, and premium products and services. They often conceive Western brands with quality, opulence, and reliability. At present, most of the franchised businesses focus on fast food and retail and there still are plenty of opportunities varying in brands and sectors.

MOIT estimates that F&B consumption accounts for 15 percent of GDP and is increasing year by year. According to Vietnam Report, revenue in this segment is projected to reach US$678m 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 F&B, U.S. fast food franchisors are key players in the market, notably McDonald’s, KFC, Starbucks Coffee, Burger King, Pizza Hut, Domino’s Pizza, Popeye’s Chicken, Texas Chicken, Baskin Robbins, and Coffee Bean and Tea Leaf.

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. Seven-Eleven opened its first store in Ho Chi Minh City in 2017 and now it has expanded to 68 stores in Vietnam. 

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

Opportunities and challenges
-    60% percent of the population is under 35 years of age, and per capita GDP is around $3,600 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 $11 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. 

For more information about Vietnam’s franchising sector, please contact Mr. Thao Nguyen, Commercial Specialist, U.S. Consulate General in Ho Chi Minh City, at