Monday 23 May 2022

The coffee shop franchise market is growing at a fast rate in Vietnam

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MILAN – Franchising is becoming a familiar business concept in Vietnam and the Asian country is in the process of easing its laws and regulations to encourage more franchise business growth. Most franchised businesses in Vietnam are in the food and beverage sector, including foreign coffee shop brands like Starbucks, The Coffee Bean & Tea Leaf, Costa and PJ’s Coffee of New Orleans, just to mention a few.

The leader of the Vietnamese coffee market is a domestic brand: Trung Nguyen. The group was established in 1996 in Buon Ma Thuot, Đak Lak Province. Today it operates over 1,000 coffee shops in Vietnam. Trung Nguyen exports its products to more than 60 countries, including major markets such as the United States, the European Union, the United Kingdom, , China, Canada, Russia, Japan, Dubai and Singapore.

The Vietnamese coffee giant has recently launched a new format called E-Coffee, a small scale coffee shop franchise targeted at takeaway customers.

Each takeaway coffee shop has an area of 4 – 40 square meters, and costs between VND65 million ($2,800) and VND175 million ($7,540) to set up, said Vo Thi Ha Giang, Director of Communications at Trung Nguyen Group.

E-Coffee stores will also sell all other Trung Nguyen products, including coffee dispensers and other equipment, targeting lower and middle income consumer segments, Giang said.

“E-Coffee is optimized for all locations including office buildings, metro stations, markets and convenience stores. In the beginning, Trung Nguyen will not charge brand and management fees from franchisees,” said Giang.

“The company will provide training programs, advice, business guidance and operational support for partners.” In addition to coffee and confectionery, franchisees are allowed to sell other beverages.

Trung Nguyen aims to expand this new retail coffee franchise model to 3,000 stores in 2020.

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