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What is Franchise Business? 8 Great Franchise Business Secrets

Franchise business is a startup trend that is being adopted by many people thanks to its ability to take advantage of existing brand strengths to make immediate profits. However, hidden behind that flashy look are many pitfalls lurking, if you are not alert, your whole fortune will be easily knocked over. Whether you are in the milk tea franchise business, or the fast food, coffee, milk tea franchise business… or any other product, you should read this article at least once.

Franchise business, know how to choose the right product

What do you want to do, you must clearly define what you want? If you have a fast food franchise business, you need to survey which big brands are in the top 10 fastest selling fast food brands? Are there any such brands in Vietnam? If it’s the fashion industry, then in the list of top 20, any brand that hasn’t appeared, just choose it! Similarly when you choose to run a coffee franchise, a milk tea franchise, a restaurant or any other brand.

Franchise business 1

Milk tea franchise business is also chosen by many people nowadays

That is to say, but more importantly, you have to study the market thoroughly. Consider whether the brands in the top are suitable for Vietnamese people? For example, Chloé is a world-famous brand, showroom right at Vincom building, but still fails because the design does not suit the Vietnamese body.

Don’t be too high when just starting a franchise business

If you are new to the fashion industry, rushing straight to France or the US to meet Chanel or LouisVuitton won’t solve anything. Instead, contact their representatives first and then follow their train, the condition is always 50 – 50. But when you have capital and experience in franchising, then confidently negotiate directly. with the firm. Do not rely on a brand, because the transfer money alone has already consumed a lot of your money, it is not necessarily successful. So let’s “put many eggs in one basket”, to support each other. Don’t put them all in one door, only the water will collapse soon!

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Be sure to read the contract carefully

This task is very important. You’ll quickly feel dizzy, dizzy, or maybe not understand anything – if you’re side-by-side, and you’ll end up being bullied, no joke! As was the case with myself when negotiating a contract with Burger King. There are three things I didn’t pay close attention to. They asked me to open 60 stores before receiving the transfer money. Looking to see in the Philippines opened up to 600 stores, hundreds of millions of dollars in revenue, but wanted to bring Burger King to Vietnam. However, due to the lack of careful research on domestic tastes, Vietnamese breakfast dishes are very diverse from vermicelli, pho, bread, etc. But Vietnamese people only like to eat crispy bread, Burger King is soft bread. ! The second condition is not to give monopoly. Remember, when negotiating, you must obtain a monopoly. And one more thing to remember is that the last sentence in the contract is usually compensation when there is a risk, and in the experience of big franchises, the risk occurs with a probability of up to 70%.

Franchising business, building is difficult, keeping is even harder

It’s hard to get a brand name, but it’s even harder to keep it! If you succeed in getting the brand name, do everything you can to make it grow, when you are sure, then the active position will be you, they have to follow you because they need you more. Since Vietnam taxes 30% plus 10% value added tax, that’s the law we have to abide by. Try to stick to their prices, because the company will check the invoice to see if you sold the right price they offered or not. If they find a mistake, they will stop supplying you. The company will also control the advertising dollars, so you have to negotiate in the way that is in your best interest, such as advertising money for 20 newspapers, not 10. Prepare a plan for 5 years because they will definitely mention it. Because they want to see if you really understand the market. If you don’t come up with a good plan they won’t accept you. Usually, the company will give you a term of 3 -5 years, not sell it or transfer it completely. The essence of franchising is because you will help them develop the brand for them. Because of that, the profit and loss of your brand owner does not care, they just need to eat the commission. So when negotiating, how do you force them to give you the right to sell to a third person if you do well.

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At all costs do not let them force themselves to rent large premises, should only be limited to 25-30 thousand USD, if up to 40-50 thousand USD, death is certain! Next is the amount of space we can get back, if there is in Dong Khoi, absolutely do not ignore. Initially, that was the case, but once we got on our feet and opened more branches, we had to reclaim our rights by not paying for franchises anymore. Because, as long as you open one more store, the stock price will go up and they eat there is more than enough!

The brand identity

This problem is not simple. Because as long as they ask the kitchen to double the size of the store, or the shop area they will force you to be at 300-500 m2, it’s like stabbing yourself! So about Vietnam must change. The investment cost for the store should only stop at 200,000 USD and the kitchen should only be 1/3 of the store.

Localize as much as possible

In the contract, there is definitely a clause that requires you to import genuine foreign materials and machinery from A-Z. See also: 10 milk tea brands that allow franchising Vietnam have joined the WTO, goods Vietnam is also of the same quality as imported goods, but the price is much cheaper. Therefore, try to definitely get rid of this unprofitable condition. Successfully, you have cut 50% of the imported materials. Big brands are very willing to listen if you have the ability to analyze. Remember to always put yourself in an active position, using stocks as a condition to convince them to follow you.

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Want to recruit good troops, don’t believe in cv

Finding talent in the fashion and fast food industries is not easy! Good profile doesn’t decide everything, practical ability is what matters. Based on qualifications, grades, etc., there are many consequences including having to close the store. The damage every time the store closes / reopens is not small anymore! Therefore, it is necessary to find employees who trust and have a new job to feel secure.


Cost of goods will determine whether you win or lose! Because we still have a lot of expenses such as raw materials, taxes, electricity and water, etc., if the cost of capital accounts for 25%, we win, and over 50%, we lose. But the company is afraid that you do not guarantee product quality problems. So you have to control the cost of capital carefully, down slowly. The formula is: the rental price is from 15-20%, the cost price fluctuates at 25-30%, the result is less than 50% is ok.

Promotion of product

Franchising business, it is impossible not to mention product marketing. Regardless of whether you are in the business of franchising coffee, fast food or fashion… How do customers know you? Advertising, promotions, and the lack of frequent menu changes, of course. Because Vietnamese consumer psychology is often very fond of new things. For example, the Popeyes Chicken brand, the owner also added Popeyes Fried Chicken, mixed rice paper and sandwiches to the menu. As a result, poor sales were automatically increased to 25%. – Biên dịch & Biên soạn Lại


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