Franchise as a Business in Vietnam

We always hear that franchise is a “money making” business. Franchise is a strategic relationship between groups of connection with objective to dominate the market and attracting more customers from the competition. It can be considered as business strategies which apply to gain and sustain their consumers by creating an image to current and future consumers.  However, there are some wrong mindsets about franchise business such as, thinking that become a franchisee is “buying a franchise”.

The fact, franchisee are investing their asset in the franchise system to use the brand, operation system and continuous support from their franchisers. In Vietnam, popular franchisers such as Pizza Hut, Shop & Go, Circle K and Lion City Restaurant are aggressively expanding their business by using this franchise system.

Financially Stable

One of the factors to have a franchise business is the franchisee has to be financially stable. Weak financial background may result a failure and difficulties when delivering the business. Franchisee must have a sufficient capital to sustain the business in case of any weak performance.

Selection Criteria

Franchisers has strict selection criteria to choose their franchisee. Only capable and affordable candidates will be able to contribute to the success of the business. Normally franchisers have their own successful recipe and all problems had been early measured. This will be easy for franchisee to follow the business process and this will increase the successful rate of the business.

Intensive Training

Franchisers also will support their franchisees with intensive training and sufficient management tools. In some cases, franchisees can enjoy some benefit such as capital injection. franchisers may supply half of the investment capital and franchisee only need to pay the royalty according to their sales performance. However, there will be certain terms which may apply for this clause.

Easy Transaction

If the franchisees already have their own premise for the business, they can speed up the process to start-up the business and earn from the business. Optionally, your property owner will happy to let you rent their premise especially if the franchise business that you deliver is a famous brand. Letting you to rent their property means, the property is good and will contribute towards their property appreciation.

By selling a famous and strong franchise brand, the franchisee will be able to gain a faster profit as they do not need to develop the brand name because consumers initially already know the business.

Ready Made Process

Franchisees also do not need to worry about doing any mistake as the experience from franchisers will be applied as a guideline. Any problems had been prepared with counter measure for franchisee to match it. If franchisees decided not to continue the business, there will be many potential buyers who are willing to buy the business as most of the franchise business is a strong chain in market and profit potential.

Even there are many successful stories about franchise business, there are some failure been recorded. The successful and failure of franchise business is depend on the business mission. It is good for future franchisee to list down the reason why they want to do it and their business target.