Market heats up as super brand McDonald’s arrives

McDonald’s Vietnam logo illustration photo

Last week, a representative of McDonald’s Vietnam said that McDonald’s would inaugurate its first Vietnam restaurant in Ho Chi Minh City on February 8, 2014 after signing a master franchise agreement with Ho Chi Minh City-based Good Day Hospitality, founded by IDG head Nguyen Bao Hoang.

He added that the construction was fundamentally finished and the first outlet would open at 2-6 Dien Bien Phu, in Ho Chi Minh City’s District 1.

McDonald’s also wants to find local suppliers in Vietnam and the wider Asia region. Most of the firm’s ingredients will be sourced through its existing network of global supply partners, the representative claimed.

McDonald’s is the leading global foodservice restaurant chain serving nearly 68 million people in 119 countries daily.

While the fast-food giant has an immense presence in greater Asia, McDonald’s is late to market in Vietnam, where a bevy of fast food operations are already based. Trailblazer KFC, another US fast food brand, has also rapidly expanded in Vietnam. The first KFC restaurant was established in Ho Chi Minh City back in 1997 and in June 2011 the franchise marked its 100th restaurant in Vietnam.

Burger King, meanwhile, opened in 2012 and has 12 outlets, while Starbucks opened its first location in Ho Chi Minh City last February. 

According to a survey seen by VIR from Vietnam Franchises (VF), a leading franchising and licensing consulting company, franchising in Vietnam continues to grow by leaps and bounds, with 30 per cent average annual growth in terms of the number of new brands entering the market.

VF however added that while the franchising market was still quite small compared to regional markets such as the Philippines which boasts over 1,500 franchise chains, Vietnam continues to be the fastest growing franchise market in ASEAN. The recent opening of Starbucks and the upcoming launch of the first McDonald’s in Vietnam will no doubt fuel increasing franchise growth and interest in Vietnam for the coming decades.

The latest figures from the Ministry of Industry and Trade reported that there were just over 100 foreign franchises registered in Vietnam as of December 2013. The franchises mainly originated from the US, Australia, South Korea, Singapore, Thailand, Japan, Hong Kong, Canada and the Philippines.