Franchising, the only business model with 90% success rate

According to Entrepreneur Magazine, “Success rates for franchises are greater than 90%, making this the lowest failure rate of any type of business.”

“Research found that while 20% of individual startups were still in operation after 7 years in business, franchised businesses were still operating at a rate of 91%” – FranchiseUSA.

Why all world brands want to the franchise their model?

1. Cost cutting

Unlike opening a new branch, the franchisee always pays an “entry” fee and extracts a portion of their revenue each month for the brand owner. This means that the cost of opening stores, staff training, and countless costs will be paid out by franchisee.

And when it comes to operating, each franchise will become an extremely viable source of revenue for the franchisor. If you are confident that you own a strong brand that is growing in the market, then franchising is definitely a right direction.

2. Easy management

Franchisee will be responsible for day-to-day operations, ensuring that the Franchising Terms are strictly adhered to. As well as being a business owner, Franchisee will not need close monitoring from the brand owner since they both share a common goal of revenue and profit growing.

Tracking business indicators (KPIs) and supporting leadership development for each franchisee are the only two management tasks that a franchisor needs to do.

 3. Rapid development

With the two advantages of cost and management as mentioned above, the franchise network will have a faster growth rate than direct investment in additional owned branches.

Not only expanding, franchisee is often well-versed in the area, making them a “master” that can help the brand become more flexible and closer to each neighborhood.

4. High commitment

Franchisee is not just a business partner; they are an investor with a deep understanding of what value they will receive if franchising successfully.

Because of this, the franchisee’s level of commitment is perceived to be higher than that of the brand’s own employees, since the burden of investing is greater than receiving a regular salary.

But money is not the only reason they try, once they become franchise partners, their self-esteem will be challenged by the customer’s assessment every day.

 5. Simpler HR management

After deciding to sign a franchise contract, these partners tend to pursue their investment decisions to the end. If the contract ends prematurely, the potential and future profits will be ended abruptly, and the franchisee will lose almost all his investment.

In the face of the situation, franchise brands are always the one with the headache of selecting, training and recruiting managers after a period because they always job-hopping. Most of the personnel burdens will be managed by the franchisee because the employee is an important brand representative.

6. International potential

Not only helps the brand quickly expand locally. Successful franchising also allows you to quickly master and bring your brand to the oversea market.

With the series of advantages as above, the 10th Vietnam International RetailTech & Franchise show is proud to be one of the most successful events in the field. Only in 2017, the exhibition attracted more than 30,000 visitors; including 12,000 franchisees and has resulted in countless successful business deals for more than 150 franchise brands from Taiwan, Singapore, Malaysia, USA, Japan, the United States, Thailand and other European countries

Vietnam International RetailTech & Franchise show will be held from 10:00 to 17:00, from 1-3 November 2018 at SECC, District 7, HCMC.

Franchising industry in Vietnam

Franchising started in Vietnam in the 90s with famous fast food chains such as KFC, Lotteria, and Jollibee.

As of 2017, the Ministry of Industry and Trade of Vietnam has confirmed that more than 170 foreign brands have registered to franchise in Vietnam, of which the brands in the fast food sector, Sweet, coffee, soft drinks and restaurants make up more than 50% of the registered brands.

The report also shows that the brands are mainly from the United States, Australia, South Korea, Singapore, Thailand, Japan, Hong Kong, Canada and the Philippines.

These countries also accounted for most of representative brands at VietRF. In 2018, we will have more than 150 franchise brands from Taiwan, Singapore, Malaysia, USA, Japan, the United States, Thailand and other European countries.

But do not underestimate the local competitors, many domestic brands have been looking for opportunities to develop through franchise models. It is fortunate that Vietnam’s domestic brands don’t need to submit for franchise license to start franchising. The simplified franchise procedure is the reason many small and medium scale Vietnamese brands started to franchise in recent times.

Big franchises in Vietnam after learning and stumbling in this strategic business model have now restructured and built the optimal human resources plan to be able to export the brand oversea, such as: Highland coffee, Pho 24, Cong Coffee, brands from Red Sun and Golden Gate …

The above data is a clear evidence of the suitability of the franchise model in Vietnam. With the increasing passion in business, franchising will provide an opportunity to enter the market with minimal investment and risk.

With the participation of many brands from other countries with high quality products and services Vietnam International RetailTech & Franchise show is a best trade show in this industry at Vietnam.

Do you want to franchise? Or do you want to invest?

With high success rate and minimum investment, join VietRF now!

Vietnam International RetailTech & Franchise show will be held from 10:00 to 17:00, from 1-3 November 2018 at SECC, District 7, HCMC.

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Phone: +84 934511953

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Điện thoại: +84 934511953

Email: [email protected]