Lotteria offers slices of pie

In the coming period, Lotteria will simultaneously carry out its investment and franchising strategy aiming at growing its presence in the Vietnamese market.
The company said it had completed legal setup stage as well as human resource preparations relevant to franchising activities. Accordingly, the company seeks to boost the number of Lotteria shops in the country to 200 within the next five years.

Lotteria reportedly had the idea of franchising its brand to Vietnamese firms back in 2007 after it opened 30 shops in the country. However, according to Lotteria Southeast Asia general director Rho Il Silk the current time was appropriate for the company to do franchise when its target of opening 100 shops in Vietnam was already achieved.

“This is a good time for Lotteria to embrace franchising since the size of Vietnam’s fast food market quickly increases with a potential customer base on the back of relatively stable rental space and lower manpower costs than selling Vietnamese ‘Pho’ (noodles),” said brand consulting firm Left Brain Connectors chairman Pham Viet Anh.

The company has reportedly pumped around $20 million into developing Vietnam-based Lotteria shop chains. The fee for a Lotteria shop franchising is set at around $250,000, tantamount to investment cost of a Lotteria shop. Good space is one of priority factors set by Lotteria in franchising transactions.

Reality shows that franchising has been commonplace in the country within the past decade.

Like KFC, Lotteria is a fairly successful model when eyeing an average 30-40 per cent annual growth in the Vietnamese market whereas diverse foreign pizza brands were not yet carved a niche in the Vietnamese market.

After 13 years in Vietnam, South Korea’s Lotteria brand currently occupies good positions in Ho Chi Minh City and Hanoi. It opened the 100th shop in late November 2011 in Ho Chi Minh City’s District 8.