Franchise Brand - Business Opportunity and Things to Know

Franchise Brand is one of the most popular types of brands today. Building and developing a successful franchise brand requires many factors, from choosing the right type of brand to building an effective marketing strategy.

What is a franchise? Understand its nature and importance

Have you ever wondered why McDonalds and Starbucks stores can appear everywhere in the world with consistent quality and service? That is thanks to the franchise business model . So what is a franchise brand and why is it so popular?

Definition of Franchise Brand:

Franchising , also known as franchising , is a form of business cooperation in which a business ( the franchisor ) allows another business ( the franchisee ) to use its brand, products, services, business processes and other intangible assets to do business in a certain location or area.

How it works:

• Franchisor: Owns unique brand, products and business processes.
• Franchisee: Invest capital, rent premises and operate the store according to the franchisor's standards.
• Franchise contract: A legal document that stipulates the rights and obligations of both parties, including franchise fees, royalties, training obligations, support...
• Benefits for franchisors: Rapid market expansion, increased revenue, without having to invest too much capital.
• Benefits for franchisees: Use of a reputable brand, reduced business risk, training and marketing support.

Differences from other forms of business:

Business form	Characteristic
Independent Business	Owner builds brand, product, service himself.
Franchise	Use of third party brands, products, services.
Joint venture	Two or more businesses cooperate to invest in a common project.

 

The role of franchise brands in the market:

For consumers:

• Consistent quality: Products and services always ensure standard quality.
• Convenience: Easy to find stores of your favorite brands.
• Variety: Having a wide choice of products and services.

For investors:

• Reduce Risk: Use a reputable brand, reduce the risk of failure.
• Franchisor Support: Training, guidance and marketing support.
• Business expansion opportunity: Can open multiple franchise stores.

For the economy:

• Job Creation: Contribute to creating many new jobs.
• Promoting economic growth: Increasing competition, promoting innovation.
• Improve quality of life: Provide high quality products and services to consumers.

Franchising is an effective business model that brings many benefits to both the franchisor and the franchisee. However, to be successful with this form of business, careful selection, close cooperation and effective management are required.

Benefits of investing in a franchise brand

Are you considering investing in a franchise but are still wondering about the benefits it brings? Let's explore the outstanding advantages when you become a franchisee .

1. Minimize business risks: Thanks to the brand's reputation and existing system.

One of the biggest benefits of investing in a franchise is the reduction of business risk . When you choose to join a franchise system that has a name in the market, you will inherit the following values:

• Strong Brand: A strong franchise brand that has been established over time will help you easily reach customers and build trust.
• Proven business system: Optimized processes, products, and services save you time and effort in building and operating your store.
• Franchisor Support: You will be provided with materials, marketing tools, staff training and technical support to operate your business effectively.

For example, when you open a McDonald's store , you benefit from a global brand, strict quality control systems, and proprietary recipes. This reduces the risk of failure compared to starting a new brand on your own.

2. Access to resources and support: Training, marketing, supplies.

When you join a franchise system , you'll have access to valuable resources and support to help you quickly start and grow your business:

• In-depth training: You will be trained in management skills, sales, marketing and specialized knowledge related to the brand's products and services.
• Marketing support: The franchisor will provide marketing materials, advertising support and local branding.
• Stable supply: You will be provided with raw materials and supplies at preferential prices and guaranteed quality.
• Management system: You will have access to management software, helping you manage your store more effectively.

3. Enhance competitiveness: Thanks to strong brand and professional management system.

A strong franchise brand will help you increase your competitiveness in the market:

• Loyal customers: Customers tend to choose brands that have a reputation.
• Operational efficiency: Professional management system helps you optimize costs and increase operational efficiency.
• Economies of scale: By joining a large system, you can benefit from economies of scale, which helps reduce product costs.

Investing in a franchise is a smart choice for those who want to start or expand their business. By taking advantage of the benefits this model brings, you can increase your chances of success and achieve your business goals.

Popular types of franchise brands

When deciding to invest in a franchise business model , you need to understand the different types of franchises to choose the one that best suits your goals and capabilities. Here are the three most common types of franchises :

1. Franchise Business Format

The most common form of franchising is the Franchise Business Format , in which the franchisor provides the franchisee with a complete package of services including:

• Brand: Brand name, logo, slogan and brand identity system.
• Product or service: Formula, process of manufacturing or providing a service.
• Business system: Management, marketing, sales and store operations processes.
• Training and support: Employee training programs, business and marketing support.

For example, fast food brands such as McDonald's, KFC or convenience store chains such as Circle K, 7-Eleven often apply the comprehensive franchise model.

2. Product Franchise: Product Franchise

Product Franchise is a form of franchising that focuses on distributing the franchisor's products. The franchisee has the right to use the franchisor's brand and distribute its products, but is not allowed to use the franchisor's business and management systems.

For example, car and mobile phone brands often use the product franchise model.

3. Service Franchise: Service Franchise

Service Franchise is a form of franchising that focuses on providing services by the franchisor. The franchisee has the right to use the brand, service process and receive support from the franchisor.

For example: Foreign language centers, gyms, and repair services often apply the service franchise model.

Each type of franchise has its own advantages and disadvantages. Understanding the types of franchise brands will help you make the right decision when participating in the franchise business model . Carefully consider the factors to choose the type that suits your abilities and goals.

Franchise participation process

The process of franchising is not simple, but with careful preparation and a clear plan, here are the basic steps you need to take to become a successful franchisee .

1. Market research and sector identification:
   
   
• Market Analysis: Assess market potential, consumer trends and competitors.
• Identify your niche: Choose a business niche that suits your interests and experience.
2. Choosing a franchise brand:
   
   
• Research brands: Compare different brands on reputation, franchise fees, support and contract terms.
• Meet the franchisor: Learn firsthand about the brand, company culture, and support policies.
3. Franchise contract negotiation:
   
   
• Read the contract carefully: Understand the terms, rights and obligations of both parties.
• Negotiation: Discuss and adjust contract terms to protect your interests.
4. Prepare capital and find premises:
   
   
• Secure capital: Prepare enough capital to invest in opening a store and operating the business.
• Find a location: Choose a location that meets the franchisor's criteria.
5. Training and opening stores:
   
   
• Attend training: Learn about products, services, operating procedures and management skills.
• Open a store: Prepare everything to open the store and start business.

Documents and legal procedures: Necessary requirements to become a franchisee.

To become a franchisee , you need to prepare all the documents and legal procedures as required by the franchisor and the law. The documents usually include:

• Personal documents: Identity documents, financial proof.
• Business Plan: Present a detailed business plan for the franchise store.
• Franchise Agreement: A legal contract between a franchisor and a franchisee.
• Business licenses: Licenses required to operate a business.

Risks and challenges when participating in franchising

Franchising is an attractive business opportunity, but it also comes with certain risks that you need to be aware of:

Potential risks: Competition, changing tastes, breach of contract...

• Competition: Competition from other competitors, both within and outside the franchise system.
• Changing tastes: Consumer tastes can change, affecting sales.
• Breach of contract: Failure to comply with the terms of a contract can result in legal consequences.
• Macroeconomic risks: Economic factors such as inflation and economic recession can also affect business operations.

Ways to prevent and minimize risks:

• Research thoroughly: Research the market, competitors and franchise brand thoroughly.
• Read the contract carefully: Understand the terms and conditions in the contract to protect your rights.
• Build a good relationship with the franchisor: Maintain a good relationship with the franchisor for better support.
• Invest in marketing: Build personal branding and promotions to attract customers.
• Adaptable: Always ready to change and adapt to market fluctuations.

Entering into a franchise is a major decision that requires careful consideration. By understanding the process, potential risks, and preparing thoroughly, you can increase your chances of business success.

Successful Franchising Brands in Vietnam: Lessons Learned

Vietnam is becoming an attractive market for international and domestic franchise brands . To better understand the factors that help a franchise brand succeed in Vietnam, let’s analyze some typical case studies .

Case study analysis: Successful franchise brands in Vietnam

• Trung Nguyen Legend: By building a Vietnamese coffee brand and a widespread distribution system, Trung Nguyen Legend has become one of the most successful franchise brands in Vietnam. Lesson learned: Build a strong brand, combined with local culture.
• Pho 24: With a flexible franchise model and standardized pho products, Pho 24 has rapidly expanded its store system nationwide and internationally. Lessons learned: Quality products, effective management systems and the ability to adapt to diverse markets.
• Lotteria: The fast food brand from Korea has succeeded in Vietnam thanks to careful research of consumer tastes and continuous product innovation. Lessons learned: Understand the market, change flexibly and market effectively.

Factors determining the success of a franchise brand:

• Strong Brand: A strong franchise brand will create customer trust and loyalty.
• Quality products/services: Products/services must meet the needs and expectations of customers.
• Professional management system: An effective management system will help ensure product/service quality and optimize business operations.
• Professional staff: Well-trained staff with good service attitude will contribute to the success of the brand.
• Effective Marketing: Creative and relevant marketing campaigns will help brands reach more customers.
• Adaptability: The ability to adapt to market changes is an important factor for a franchise brand to survive and develop sustainably.
• Franchisor Support: Financial, training, and marketing support from the franchisor will help franchisees become more successful.

For a franchise brand to be successful in Vietnam, it is necessary to combine many important factors such as: strong brand, quality products, professional management system, good staff, effective marketing and the ability to adapt to the market. In addition, support from the franchisor also plays an important role in helping franchisees achieve success.

Franchise Brand Service Price List

When deciding to join a franchise system , one of the important factors that investors are interested in is the associated costs . The franchise service price list will help you have an overview of the fees that need to be paid.

Fee Type	Describe	Price range (VND)
Initial franchise fee	One-time fee for licensing the use of a trademark	50,000,000 - 500,000,000+
Annual franchise fee	Brand Maintenance Fee	2% - 5% of annual revenue
Advertising fee	Contribution to the general advertising fund	1% - 3% of annual revenue
Training fee	Training course fees	5,000,000 - 15,000,000
Material usage fee	Fees for purchasing raw materials and equipment from the franchisor	Depends on product and service
Store design and decoration fees	Store design and construction fee according to brand standards	Depends on area and design

 

Note:

• Price range: The above price range is for reference only and may vary depending on each specific case.
• Other fees: In addition to the above fees, there may be other fees such as insurance fees, equipment maintenance fees...
• Initial investment costs: In addition to the franchise fee, you need to prepare additional capital to rent premises, decorate the store, buy inventory, pay employee salaries...

The franchise price list is an important factor in the investment decision. Consider carefully and compare with other options before making a final decision.

Brand Manager Specializing in Providing Franchise Brand Services

Are you looking for a professional partner to build and develop your franchise brand ? We are the solution you need. As a professional Brand Manager , we provide comprehensive services to help you build a strong and influential franchise brand .

What is a Brand Manager? How does it affect a franchise brand?

Brand Manager is responsible for managing and developing the brand of a business or organization. In the field of franchising , Brand Manager plays an important role in building and maintaining the image of the franchise brand , ensuring uniformity and unity within the system.

Brand Manager's impact on franchise brands:

• Brand building and development: Create a strong, unique brand that is relevant to your target market.
• Brand identity management: Ensure consistency in the use of logos, colors, fonts, and other identifying elements.
• Develop marketing strategy: Plan and implement marketing activities to increase brand awareness.
• Customer Relationship Management: Build and maintain good relationships with customers.
• Franchisee training and support: Provide brand knowledge and skills to franchisees.

Having a professional Brand Manager will bring many practical benefits to your business. They will help you save time and effort in building and managing your brand, while increasing the efficiency of your investment in marketing activities.

With experience and in-depth knowledge, a Brand Manager will help enhance your brand value , build customer loyalty and ultimately, help you achieve your business goals more effectively.

A good Brand Manager will be a reliable companion to help you build and develop a successful brand.

If you are looking for a trusted partner to build a successful franchise brand , contact us today. We are ready to advise and support you every step of the way.