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Franchising falls by a third

Update: July, 23/2012 - 12:29

HA NOI – Franchising of foreign trademarks in Viet Nam in the first half of the year fell 30 per cent compared with the same period last year, according to the Ministry of Industry and Trade.

In the first six months, the ministry registered only eight franchisers in the fields of food and beverage, fashion, transport means and computer services. However, they were for brands of renown.

Explaining the decline, the ministry said franchising was not a popular business model in Viet Nam.

However, it blamed this on the country's diversified investment policy. This gave investors more choices to do business rather than just franchising.

Economic experts said some Vietnamese getting involved in the business failed to thoroughly understand franchising techniques. Others had too few specialised employees or a comprehensive plan to develop outlets.

They added that lack of strong trademark protection had hampered franchisers.

The cost of renting outlets on major roads in big cities has also skyrocketed, making it difficult for businesses to find prime space.

Since 1990, more than 120 foreign brands have been franchised in Viet Nam. – VNS

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