Franchising in Vietnam - VF Franchise...

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam Franchising in Vietnam Sean T. Ngo, MBA, PMP®

Transcript of Franchising in Vietnam - VF Franchise...

Page 1: Franchising in Vietnam - VF Franchise Consultingvffranchiseconsulting.com/.../uploads/2014/10/Vietnam-Franchises1.pdf · Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam Franchising

Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Franchising in Vietnam

Sean T. Ngo, MBA,

PMP®

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

About Us * Our Vision: Within the next five years, Vietnam

Franchises will be the leading, most trusted, and “Go-To” franchise and licensing consultant for Vietnam and Asia.

* Vietnam Franchises targets a select few concepts that are highly adaptable to Asia. These brands are selected due to their success internationally. They are recognized, proven brands with strong potential growth, and have sustainable competitive positions.

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Why Us

* Uniquely experienced management team with both operational and development experience throughout Asia.

* We have over five decades of international experience in strategic business planning, franchising development and operations, business development, real estate, and project management. With offices at the center of South-East Asia, we are positioned to assist our clients enter the fastest growing emerging region in the world.

* Vietnam Franchises and Edwards Global Services exclusive partnership for key ASEAN markets.

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Our Team Sean T. Ngo, MBA, PMP®

* Managing Director * SEA EGS Managing Director * Bi-lingual Vietnamese-American in Vietnam for 10 years * Developed and operated Carl’s Jr. in Vietnam * Over 20 years of franchising, project management, business

development, real estate, and finance experience * Previously worked for Microsoft, Coldwell Banker, Lockheed * MBA Adjunct Professor in Franchising, Entrepreneurship, Project

Management, Strategic Management * Speaker at franchising events organized by government and industry * Contributing Writer to Inside Retail Asia * MBA, University of San Francisco, USA * Certified Project Management Professional (PMP®)

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Specializing in

1. Vietnam 2. Singapore 3. Indonesia 4. Malaysia 5. Thailand 6. Philippines 7. Myanmar 8. Cambodia 9. Laos 10. Brunei

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Our Clients

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Vietnam • Socialist Republic of Vietnam (SRV) • Centrally planned economy • Communist Party of Vietnam: Nguyen

Phu TRONG • Chief of state: President Truong Tan

SANG • Prime Minister: Nguyen Tan DUNG • The capital is Hanoi, the commercial

capital is Ho Chi Minh City or “Saigon” • Vietnam has the 3rd largest population

in ASEAN and ranked 14th in the world • Rural population accounts for 70%

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

• HCMC is estimated to have 10M+ people and Ha Noi 8M+ people

• Da Nang is estimated to be 1M+ people • Vietnam has 58 provinces, 5 municipalities

Source: Wikipedia

Largest Cities in Vietnam

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

• 0-14 yr: 24.3%

• 15-24 yr: 17.8%

• 25-54 yrs: 44.8%

• 55-64 yrs: 7.4%

• 65+ years : 5.6%

Source: CIA Factbook

Vietnam Population Pyramid

Median Age: 29.2 yrs

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Vietnam Highlights • 93M people, growing 1.0% per year • Stable socio-political environment • High literacy rate of 93.4% • Poverty rate fell from 37.4% in 1998 to 9.9% in 2013 • GDP was US$171 billion in 2013 • GDP/capita is currently US$1,900 US$4,348 by 2021 • Labor force of 44 million (13th largest in the world) • In 2013 retail sales grew 12.6% to US$124.7 billion • Member of WTO (2007) • Expected member of Trans Pacific Partnership (TPP) in

2015

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Vietnam GDP (2005 – 2014)

Source: World Bank

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Real GDP Growth Rate (2000 – 2014)

Source: GSO

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

GDP per Capita USD (2000 - 2014)

Source: Ministry of Planning and Investment

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Source: GSO

Registered FDI • Total registered FDI in 2013 was

USD21.6 billion • The processing industry has the

largest interest with over 70% of total registered FDI capital

• Investors from Asian countries continued to account for the major portion of new FDI in 2013

• Japan – 28% • Singapore – 22% • S. Korea – 21%

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Franchise Highlights • There over 110 foreign brands per MOIT • Market leaders: KFC, Lotteria, Jollibee, Pizza Hut

– Lotteria has 200+ restaurants – KFC has 140 restaurants (19 cities & provinces) – Jollibee has 40+ restaurants – Pizza Hut has 29 dine-in, 5 delivery restaurants

• Newcomers: McDonald’s, Starbucks, Dunkin Donuts, Texas Chicken, Baskin Robbins, Dairy Queen

• Food consumption to grow 61.6% from 2012 – 2017 • Nearly 50% of household spending is on F&B • Vietnam has franchising laws

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Vietnam Foodservice

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Vietnam Retail Demand

Source: CBRE Vietnam

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Asian Retailers’ Preference

Source: CBRE Research

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Source: CBRE Vietnam

Trade Agreements Update

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Recent Entries & Expansions

Source: CBRE Vietnam

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Franchise Legal Framework

Source: Baker and McKenzie

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Overview of Franchising Rules

Source: Baker and McKenzie

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Conditions for franchisee

• Have business license covering business lines subject to the franchise

Overview of Franchising Rules

Source: Baker and McKenzie

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

• Franchise Agreement and FDD must be provided to franchisee 15 days prior to signing

• Must inform franchisee of any substantial changes to the franchise system

• Sub-franchisor must inform sub-franchisee of termination or expiration of master franchise agreement

• FDD covers 10 essential franchise areas

Franchise Disclosure Document (FDD)

Source: Baker and McKenzie

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

• Must be in written form • Vietnamese version is required • No need to submit to MOIT • Foreign governing law allowed but cannot be

contrary to Vietnamese laws

Franchise Agreement

Source: Baker and McKenzie

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Franchising Challenges

• Real Estate • Supply Chain • People • Inflation • VN Dong

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Source: CBRE Vietnam

Real Estate Comparison

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Supply Chain • Available

– Pork, Chicken, Seafood – Baked products – Vegetables – Paper products

• Imported – Beef – Quality dairy products

• Kitchen equipment, furniture, POS, Signage

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

People

• Few qualified and experienced senior managers – requires further investment in training

• Many university graduates, but few with extensive experience

• PLUS – labour costs are cheap compared to region

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Vietnam Inflation Rate (2005 – 2014)

Source: GSO

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Vietnam Dong (2005 – 2014)

Source: GSO

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Our Services

1. Franchising & Licensing Services 2. Assistance in establishing Distribution, JV

partnerships and Direct Investment 3. Management Consulting (e.g. feasibility

studies, market-entry plans, etc.) 4. Project Services (eg. due diligence, site

acquisition, etc)

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Floor 6 & &, Me Linh Point 2 Ngo Duc Ke, District 1 Ho Chi Minh City, Vietnam 16 Collyer Quay Lầu 18, Tháp Hitachi Singapore 589154 55/2 Moo 2 Ladyao, Chatuchak Bangkok, 10900 Thailand

www.vietnamfranchises.com [email protected]

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Appendix

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Source: GSO

Registered FDI - 2013

Source: GSO

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

With Focus on China & ASEAN

Source: CBRE Research

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Internet Penetration in 2011

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Singapore Bangkok, Thailand Ho Chi Minh City, Vietnam

Internet Penetration in 2016