Franchising will become an indispensable business trend in Vietnam as it would open up retail market further in 2014, lawyer Ho Huu Hoanh, director of the Vietnam Franchising News Online (VietFranchise), said on May 11.

Speaking at a seminar in HCM City organised by the Vietnam Trade Promotion Agency's (Viettrade) HCM City Office, he said that the number of local entrepreneurs' franchising activities is still low but is expected to grow in coming years.

Foreign commercial affairs, consultants and franchise associations are urging local retail and franchise players to consider Vietnam a good market for franchising.

The franchising business model has brought benefits not only for franchisers but also for franchisees.

It is especially beneficial for small – and medium-size companies that want to start a new business in a short period of time with a modest amount of invested capital, but the promise of a stable income.

Franchisees can offer well-known brandname systems and receive training and technical transfer from franchisers.

However, the franchisers and franchisees need to identify the appropriate time to open a business and map out strategies to be successful in the market.

The franchising model is praised for its high effectiveness and low business failure.

Sean T Ngo, managing director of the Vietnam Franchises Co Ltd said although most existing franchise operations in Vietnam are in the fast food and beverage business, franchising has the potential to develop in other sectors such as education, healthcare, services and retail fashion.

According to the Ministry of Industry and Trade, there are about 90 franchise systems in Vietnam .

"The rapid economic development, plus a demographic composed of young and dynamic consumers, are the main reasons for foreign firms to seek franchises in the Vietnamese market, he said.

Franchising is a good opportunity for foreign businesses to set up a retail system in Vietnam as the country has many retail opportunities, including a food and beverage retail sector valued estimated at 33.7 billion USD last year.-VNA