Franchising in Vietnam: loose and incomprehensive

 Partly franchising a model can be the franchise of product distribution like Trung Nguyen coffee, a brand-name like G7 Mart, product recipe like T-Bar tea shop, or shop owning like Y5, Tapiocup and Alo Tea.
 
Those loose business models are used by local firms to mainly increase their income, coverage and market shares, said Tran Anh Tuan, representative of the FT-Pathfinder Consulting Group, one of the big consulting firms in Asia on franchising.
 
In Vietnam, franchise buyers are responsible for selling products made by franchise sellers, using logos and brand-names of the franchise sellers to distribute products. Meanwhile, franchise sellers benefit from product sales.
 
Those partly franchising models often lack consistency in using and exploiting brand-names.
 
Franchise sellers often don’t have clear requests about consistency in the business process, for example, the decoration of shops, signboards, designs. They mainly support franchise buyers in terms of product selling and some services like goods distribution, warrantees, goods exchange and don’t strictly control the operations of franchise buyers and don’t care about franchise buyers’ failure or success.
 
According to Tran Anh Tuan, Vietnamese franchising companies can’t perform the comprehensive franchising model because they lack capital, are poor at management and control ability, or don’t standardise the franchising process and brand-names and don’t have suitable business strategies and models yet.
 
Brand-name is the biggest asset of the franchise system because franchise buyers often want to participate in franchise systems with strong trademarks. Meanwhile, many local trademarks that have not attracted enough trust from customers have hastily attempted to create a franchise model.
 
According to FT Consulting, to successfully create a franchise model, enterprises need to build a franchise policy that ensures four factors: sustainable development, control, system marketing, and system reproducing ability.

Source: vietfranchise