Vietnam’s F&B franchising: Don’t just 'sell the recipe'

This was the message from Nguyen Phi Van, chairwoman of the Southeast Asia Angel Investment Network, on the sidelines of an exclusive franchise signing ceremony to bring the 24/7 coffee chain Three O’Clock to Jakarta, Indonesia, held in Ho Chi Minh City on October 16.

According to her, the biggest weakness of Vietnamese businesses is their inability to transform 'local products' into 'scalable business models.'

Each market requires a tailored approach

Van explained that even for the same brand, the franchise model must be adapted to local conditions.

In countries with high labor costs, such as Singapore or Japan, the business model needs to be lean and labor-efficient. 

For markets like India or Indonesia, however, customers prefer an experiential dining space.

“If you don’t fully understand the needs of each market and fail to design the right model accordingly, you will not succeed globally,” she said.

Vietnam’s food and beverage sector has been well-received internationally, but in reality, very few Vietnamese chains have successfully expanded overseas.

The reason, Van pointed out, is that domestic businesses still lag far behind their regional peers in terms of professionalism and their ability to integrate into the global market.

“Within ASEAN, only a handful of Vietnamese brands come close to meeting international standards in franchising," she told Tuoi Tre (Youth) newspaper.

“Even compared to Indonesia, the Philippines, or Thailand, we are still significantly behind. 

"And when compared to Singapore or Malaysia, those markets have decades more experience and far greater professionalism in brand development."

Export business models, not just recipes

Nevertheless, opportunities remain vast, especially as global curiosity about Vietnamese cuisine and culture continues to grow.

To succeed internationally, businesses must do more than take pride in a good product, Van said, elaborating that they need to operate professionally, build long-term strategies, and truly understand their target markets.

“Take pho, for example, which is gaining popularity abroad," she said.

"It’s not enough to think that having a delicious dish and a unique recipe guarantees franchising success.

“Franchising should be seen as exporting not just the product but the entire business model, brand, and management know-how.

"Otherwise, you risk falling into the trap of simply ‘selling the recipe.'"

Thuan Nguyen, CEO of Three O’Clock, noted that the franchise agreement with Indonesia’s PT Tiga Waktu Rasa is the company’s third exclusive international franchise deal since the start of 2025.

Under the agreement, PT Tiga Waktu Rasa will be responsible for expanding the store network, operating the branch system, executing marketing strategies, and managing the supply chain in Jakarta.

Three O’Clock will provide brand support and staff training for PT Tiga Waktu Rasa during the launch of its first stores.

The first branch is expected to open in Kebayoran Baru, South Jakarta in early December 2025 and will operate 24/7.

Currently, Three O’Clock has a franchise deal with a partner covering the Indian subcontinent, including India, Nepal, Sri Lanka, and Bangladesh, as well as six countries in the Gulf Cooperation Council region.