International Franchise Models in Vietnam’s Food and Beverage Industry
Vietnam is becoming a “golden destination” for international F&B brands, with numerous franchise models entering the market. However, to operate successfully and comply with local laws, businesses must understand the regulations, risks, and legal procedures when implementing franchising in Vietnam. Is the international model truly suitable for the Vietnamese market? And how can risks be minimized when signing a franchise agreement?
Key Considerations in International Franchising for the F&B Sector
International franchising allows local franchisees to use a foreign brand’s business model, know-how, and trademarks to operate restaurants, cafés, or fast-food chains in Vietnam.
Currently, more than 250 international F&B brands—ranging from McDonald’s, KFC, Gong Cha, Starbucks to mid-tier names—are registered in Vietnam. This model provides local enterprises access to professional management systems and brand prestige, with high potential profitability. Yet, legal risks remain significant if businesses fail to comply with franchising registration, contract regulations, or intellectual property (IP) laws.
Franchise Contract Risks
Vietnamese law requires all foreign franchisors to register with the Ministry of Industry and Trade (MOIT) before engaging in franchising. Failure to register may render the franchise agreement invalid. Many local companies skip this step, leading to disputes and the loss of franchise rights.
Contracts must clearly define the scope of trademark use, exclusive territories, quality control rights, and termination conditions. DEDICA Law frequently assists clients in reviewing and drafting franchise contracts to ensure legal compliance and minimize risk when dealing with foreign partners.
Intellectual Property and Trade Secret Risks
Franchisees must ensure that the international brand is legally protected in Vietnam. In some cases, a third party registers the trademark before the official franchise arrives, resulting in IP disputes.
DEDICA recommends conducting a trademark search and registration simultaneously with the signing of the franchise agreement. Protecting IP rights safeguards both legal and commercial interests.
Legal Procedures for International Franchising in Vietnam
Franchise implementation requires strict compliance with Vietnamese law to avoid sanctions or invalid contracts. The three main steps include preparing documents, registering the franchise, and executing the agreement.
Step 1: Prepare Franchise Registration Documents
Documents include:
Franchise system introduction
Certified business registration of the franchisor
IP ownership documents
Sample franchise agreement
All documents must be in Vietnamese or certified translations.
Step 2: Franchise Registration with MOIT
Under Decrees 35/2006/ND-CP and 120/2011/ND-CP, foreign franchisors must register with the Ministry of Industry and Trade. After approval, Vietnamese companies may sign contracts and operate.
Skipping registration may result in invalid contracts and lost legal protection. DEDICA Law assists clients in filing and liaising with authorities to ensure smooth, compliant registration.
DEDICA Law’s Legal Solutions for F&B Franchising
DEDICA offers comprehensive legal strategies—from negotiation and contract review to IP protection—minimizing risks throughout the franchising process.
Contract Negotiation and Review
International franchise contracts are often governed by foreign law, which may disadvantage Vietnamese companies. DEDICA advises:
Request notarized Vietnamese translations;
Define governing law and dispute resolution forum;
Carefully review fees, termination clauses, and transfer conditions.
Post-Franchise Management and Legal Protection
After signing, franchisees must maintain system standards, ensure quality, and report regularly to franchisors. In disputes, DEDICA represents clients in negotiation or litigation to protect their rights.
Conclusion
Joining the international F&B franchising market in Vietnam offers great opportunities—but also legal challenges. Proper preparation in contracts, registration, and IP protection is key to success.
Contact DEDICA Law Firm for expert legal advice!
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