Source: B&Company

Singapore, Japan, China, and South Korea are the major franchise suppliers, with Singapore accounting for 27% of the total market (Figure 4). Although 19 brands, including Chateraise and Hachiban , have entered the Japanese market, their presence is still limited.

[Figure 4] Number of foreign food and beverage franchise brands by country (%)

Source: B&Company

Competition in cities is heating up, but rural markets are showing signs of growth

Vietnam’s food and beverage market is expected to reach approximately USD 27 billion in 2024. [2]However, behind this dramatic growth, problems have also become apparent. Rents are rising in urban areas, and in the center of Ho Chi Minh City, they increased by 16% from the previous year [3]. Some franchisees are losing a quarter of their sales to rent [4].

The market is also becoming increasingly saturated, with competition especially in the milk tea and coffee chain sectors becoming fiercer, forcing even established brands such as Starbucks and Mixue to close unprofitable stores.

In this context, rural markets are attracting attention as a new growth opportunity. Approximately 62% of the population in Vietnam lives in rural areas, and consumer confidence is increasing due to the spread of smartphones and the expansion of home delivery services [5]. However, purchasing power is still limited, and many consumers are price-sensitive.

In a survey conducted by iPOS and Nestle Vietnam, the majority of respondents, 40%, said [6]they would like to pay 21,000 to 35,000 VND (approximately 1.0 to 1.5 USD) per cup of beverage. This is a 10 percentage point increase from the previous year. However, fewer consumers are choosing higher-priced beverages, so affordable products may be the key to market development.

Legal challenges and sustainable growth

While the franchise market is expanding, there are still issues with the system. The current franchise-related laws have not been significantly revised since they were introduced in 2005, and there are many insufficient areas for the protection of intellectual property rights and trade secrets. This has led to concerns about the risk of brand value being damaged and the problem of counterfeit goods.

Lack of infrastructure and logistics issues are also barriers to expanding into rural areas. Success in rural areas requires not only a simple pricing strategy but also product development that meets local demand and the creation of a flexible logistics system.

While the restaurant franchise market continues to grow, the key to success is shifting from “expansion of scale” to “establishment of sustainable competitive advantage.” Foreign companies, including Japanese ones, are being asked to accurately grasp the preferences of local consumers and develop a strategy to take root in the market with a long-term perspective.

[1] Source: Legal Document Library (online legal database) – ” Circular No. 09/2006/TT-BTM of May 25, 2006 guiding the commercial franchising registration ” (May 2006)

[2] Source: iPOS (a POS solutions company) article, ” iPOS and Nestlé Professional Announce the 2024 Vietnam Food and Beverage Business Market Report ” (March 2025)

[3] Source: CBRE Vietnam (real estate services company) article ” Ho Chi Minh City Figures Q4 2024 ” (January 2025)

[4] Source: VIRAC (industry research company) article ” Vietnam F&B Industry Strives to Overcome Difficulties in the First Half of 2024 ” (October 2024)

[5] Source: GSO (General Statistics Office of Vietnam) article, ” Press Release: Results of the 2024 Mid-term Population and Housing Survey ” (January 2025)

[6] Source: POS (a POS solutions company) article, ” iPOS and Nestlé Professional Announce the 2024 Vietnam Food and Beverage Business Market Report ” (March 2025)

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