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Group 2:
NguynTh Thanh Ngnon Giang Sn
Nguyn Minh QunPhmNgcDimTrnThun TnTrnNgc OanhNguynngHt
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Lecturer: Dr. Chris Quach
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I.General information about FranchiseWhat is a franchise?
A form of business organization in which afirm which already has a successful productor service (the franchisor) enters into acontinuing contractual relationship with
other businesses (franchisees) operatingunder the franchisor's trade name andusually with the franchisor's guidance, inexchange for a fee.
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Types of franchises
There are THREE basic types1. Product Franchises: distribute goods and
use name & trademark
2. Business Format Franchising: a proven
method provided for operating business
3. Manufacturing Franchise: right to
manufacture product and sell to public
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How Franchising Works
Thinkingabout
buying intoa franchise
system
How franchising works
What fees are involved
What is expected of you from thefranchise company
Buyer: A FRANCHISEE ==============Seller : FRANCHISORThe franchisee must follow certain:
- Rules and guidelines already established by thefranchisor- Pay an ongoing franchise royalty feeFranchising has become one of the most popular waysof doing business in today's marketplace
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ADVANTAGES
Franchisor: good opportunity to marketproducts in new markets with considerablecost & licenses fee
Franchisee: benefit from brand name andbusiness model that take long time tobuild up
Customers: services and goods brought
nearer to them
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RISKS
Franchisor: risk of having reputationruined by incompetent franchisees
Franchisee: in a precarious position in theevent of a dispute cause the agreements
are highly skewed in favor of thefranchisers
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CHOOSING A FRANCHISEOPPORTUNITIES
1. Market Trend
2. Territory Coverage
3. Company Support
4. Exit Strategy
5. Franchise Business Plan
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II. Franchise in Vietnam
1. Overview of Franchise in VN
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Multinational Companies
Domestic firms
According to the countrys Ministry of Industry and Trade, up to 70foreign brands have registered their franchising business in Vietnamand franchising growth is up 30%.
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Government support
The 2005 Commercial Law
Government Decree 35 of 2006
Circular 09 of the Ministry of Industry and
Trade of 2006
Decision 106 of the Ministry of Finance of2006.
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STRENGTHS
It is new & potential
Vietnamese regulation for
franchise effected on 2005
Government open doors for100% foreign companies
Other factors : fast growth,
mass young consumers,
higher average of income
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OPPORTUNITIES
Domestic demand for food and drinks from
foreign increases-> franchising is predicted togrow 50% on 2014
Potential to broaden franchise in other industries
Domestic firms join into franchise market more and
more
-> Franchise activities get hotter
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THREATS
Domination of foreign companies in franchise
network
Franchisors can lose their brand if the franchisees
follow exactly instruction and obligations offranchisors
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