Legal Framework and Strategies for Franchising International Beverage Brands in Vietnam

The franchise model has become a popular business expansion trend in Vietnam’s beverage industry. However, behind the appeal of brand reputation and profit potential, Vietnamese businesses must fully understand the legal framework and strategic implementation to avoid risks when cooperating with foreign partners. So, what is the safest legal roadmap for international franchising in Vietnam’s F&B sector today?

Overview of the Franchise Model in the Beverage Industry

A franchise is a business cooperation model in which one party (the franchisor) allows another (the franchisee) to use its brand, operation model, formula, and management system to conduct business within a certain area.

In the beverage sector—especially coffee, milk tea, juice, and other drink chains—this model has grown rapidly thanks to its scalability and the ability to attract customers through established brand value.

Legal Regulations Governing International Franchising

According to Vietnam’s Commercial Law 2005 and Decree No. 35/2006/ND-CP, all foreign franchise activities entering Vietnam must be registered with the Ministry of Industry and Trade. The international franchisor must have at least one year of actual business operation before granting rights to a franchisee in Vietnam.

The franchise registration dossier must include a Franchise Disclosure Document, sample contract, business license, and documents proving trademark ownership—allowing Vietnamese authorities to verify the legality of the franchised brand.

The Role of Franchise Agreements in Protecting Business Interests

The franchise agreement is the most critical foundation in the cooperation process. It should clearly define the scope of brand use, business territory, franchise fees, training policies, and quality control rights.

However, many Vietnamese businesses often accept contract templates drafted by foreign franchisors without adapting them to Vietnamese law, leading to potential disputes or loss of operational control. Therefore, engaging corporate lawyers experienced in international law before signing is essential.

Opportunities and Challenges in Implementing International Beverage Franchises in Vietnam

Vietnam’s beverage market is rapidly growing with strong coffee and milk tea consumption culture, providing favorable conditions for international brands to expand through franchising. Still, not all franchise deals succeed.

Opportunities for Market Expansion and Global Branding

With a young, dynamic population, Vietnam has become an attractive market for brands like Starbucks, The Coffee Bean, Gong Cha, and The Alley. Franchising allows Vietnamese businesses to quickly adopt modern business models and benefit from the global reputation of these brands.

Furthermore, international franchises typically offer standardized training programs, store design, and marketing strategies, ensuring consistent product quality and customer experience—key factors in F&B success.

Legal and Operational Risks to Anticipate

Many investors have faced challenges in implementing franchises due to a lack of understanding of brand management systems or failure to comply with registration requirements. Common disputes include:

• Unilateral termination by franchisors.

• Conflicts over ingredient pricing, quality control, or exclusive territories.

• Issues related to profit repatriation and taxation.

Additionally, Vietnamese franchisees must comply with intellectual property laws, ensuring all brand names, logos, and formulas are legally licensed to avoid infringement and penalties.

DEDICA Law’s Legal and Strategic Solutions for Safe Implementation

To ensure effective operation, businesses must prepare thoroughly from both legal and strategic perspectives. DEDICA Law recommends practical measures to reduce risks and ensure compliance with Vietnamese law.

1. Legal Due Diligence and Franchise Registration
Before signing, businesses should request complete legal documentation proving trademark ownership from foreign partners. This process helps prevent future legal disputes and ensures the brand’s legitimacy in Vietnam.

2. Drafting Franchise Agreements in Compliance with Vietnamese Law
DEDICA Law advises against using international contract templates without localization. Key clauses to clarify include:

• Termination and compensation terms.

• Dispute resolution mechanisms (court or arbitration).

• Quality control, training, and supply policies.

• Brand usage rights and territorial exclusivity.

The more detailed the contract, the lower the risk of dispute—an essential factor for the sustainability of international franchise models in Vietnam.

Conclusion

Franchising international beverage brands is not only an attractive investment opportunity but also a test of a company’s management and legal compliance capacity. With the right strategy and expert legal guidance, businesses can leverage global brands while protecting their interests in a competitive market.

Contact DEDICA Law for expert franchise and investment legal advice!
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