“Leading Vietnamese Brands: Expanding Horizons Through Franchising in 2025”

Go Global Holdings ecosystem expert, Nguyen Phi Van, has announced that three prominent Vietnamese brands, including the 24/7 coffee chain Three O’Clock, the popular tea brand Phúc Tea (internationally known as HappiTea), and the mother-and-baby care service chain Care With Love, have successfully signed international franchise agreements for two key regions: the Indian subcontinent and the Gulf Cooperation Council (GCC) area.

In the Indian subcontinent, these Vietnamese brands will make their debut in four countries: India, Bangladesh, Sri Lanka, and Nepal. This region boasts a promising market with a population exceeding 1.9 billion, led by India, which surpassed China in 2022 to become the world’s most populous country with over 1.4 billion people. India now stands as the fifth-largest economy globally in terms of GDP and third when considering GDP at purchasing power parity.

Turning to the GCC region, the Vietnamese brands will gain access to consumers in six nations: the United Arab Emirates (UAE), Saudi Arabia, Kuwait, Bahrain, Qatar, and Oman. By the end of 2024, the combined population of these countries is projected to reach approximately 58 million, with a total GDP of 2.1 billion USD. Notably, each country’s GDP per capita ranks within the top 50 globally.

Al Madini Group of Companies LLC (AMG) has acquired the exclusive rights for these six GCC countries. The group has committed to opening a minimum of 50 franchise branches for each brand in the region within the first five years of operation.

Earlier this year, the 24/7 coffee chain Three O’Clock, owned by Teatime Franchise JSC, signed an international franchise contract. According to brand representatives, the company is expediting the establishment of its first branch in Hyderabad, the tourism hub of Telangana, India, aiming for a grand opening in Q2 2025.

In the logistics sector, Gozo JSC has signed an international postal service franchise agreement. Through this model, Gozo aims to collaborate with local partners in Thailand, South Korea, the UK, Taiwan, Japan, Australia, Canada, the EU, and the USA. The company has already forged partnerships with three initial partners in Thailand, marking a strategic stepping stone for their expansion across Southeast Asia.

Regarding Gozo, the company has established a robust logistics network over the past five years, leveraging existing international flight routes for cargo consolidation. Presently, Gozo operates over 63 postal offices nationwide and plans to expand to 600 pickup locations by 2027.

CEO Phan Duy Minh shared that Gozo does not charge franchise fees. Partners are only required to deposit 20 million VND to secure against debts, which will be refunded upon termination of the collaboration. The initial investment for a postal office is less than 30 million VND (including the deposit, signage, and basic equipment), making it a financially accessible opportunity for potential partners.

This model, built on advanced technology and standardized operations, empowers individuals, small businesses, and enterprises in districts, towns, and provinces to establish international express delivery offices under the Gozo Express brand without the complexities of infrastructure investment.

Vietnamese Businesses Should Emulate Mixue’s Approach to Market Development

Franchising enables Vietnamese brands to expand their reach more rapidly and penetrate larger, more promising markets. The global success of Chinese brands like Mixue and Chagee exemplifies the power of franchising. Commenting on Mixue’s dominance in Vietnam through franchising, expert Nguyen Phi Van candidly stated: “This is an inevitable outcome in the knowledge economy. Whoever learns and applies effective international development models wins. Instead of blaming them for market dominance, Vietnamese businesses should learn faster.”

According to her, franchising is one of the most effective ways to expand internationally, allowing for the export of both brand and business model across industries.

In countries with well-developed franchising sectors, such as the US, Canada, Australia, Western Europe, South Africa, and Asian nations like South Korea, China, the Philippines, and Malaysia, the industry contributes significantly to the national GDP, ranging from 3% to 10%. Consequently, governments recognize the importance of franchising for economic growth and job creation.

The Global Franchise Industry Reaches 2.92 Trillion USD, While Vietnam’s Market Remains Nascent

According to Technavio, a market research firm, the global franchise industry was valued at 2.92 trillion USD in 2023 and is projected to reach 4.38 trillion USD by 2027, attaining a CAGR of 10.8%.

While Vietnam has witnessed a vibrant franchise industry in recent years, with international brands entering the market, the country faces limitations in franchising its domestic brands globally. This is partly due to the lack of professional franchising foundations and expertise in packaging and developing international franchises.

Asian countries with a 20 to 30-year head start have established numerous successful brands and models, which they have exported to Vietnam. In contrast, Vietnam’s franchise industry is still in its infancy, and local brands are in a learning phase, absorbing knowledge to develop and refine their models and brands.