How to Successfully Launch a Franchise in Vietnam (2026 Updated Guide)

Introduction

Vietnam has emerged as one of Southeast Asia’s most promising franchise markets, driven by a rapidly expanding middle class, strong consumer demand, and increasing openness to international brands. From food and beverage chains to education, retail, and lifestyle services, franchising has become a preferred expansion model for both local entrepreneurs and foreign investors.

However, franchising in Vietnam is not merely a commercial arrangement; it is a regulated activity governed by a well-defined legal framework. Businesses must comply with disclosure requirements, registration procedures, and ongoing reporting obligations before and during operations.

This comprehensive guide explains how to successfully launch a franchise in Vietnam based on the latest applicable regulations, including the Commercial Law 2005, Decree 35/2006/ND-CP on franchising (as amended by Decree 08/2018/ND-CP), and relevant circulars issued by the Ministry of Industry and Trade.

Definitions of Franchise in Vietnam

What is a Franchise Business?

Under Vietnamese law, franchising is a commercial activity whereby a franchisor allows and requires a franchisee to conduct the sale of goods or provision of services according to a specific business model.

This model typically includes the use of trademarks, trade names, business know-how, operational systems, and marketing strategies controlled by the franchisor.

The franchisee operates independently but must comply with the franchisor’s standards to ensure brand consistency.

Franchising is legally recognised under the Commercial Law 2005 and is subject to strict disclosure and registration requirements to protect both parties.

Franchise Opportunities in Vietnam

Vietnam offers diverse franchise opportunities across multiple sectors. The food and beverage industry remains the most dominant, with international brands expanding aggressively in major cities.

Global brands such as McDonald’s, KFC, and Starbucks have successfully established franchise networks in Vietnam, demonstrating the market’s strong potential.

Beyond F&B, sectors such as education, fitness, retail, and healthcare services are also experiencing rapid growth in franchising activities.

For investors, franchising provides a lower-risk entry strategy compared to building a brand from scratch, as it leverages established systems and brand recognition.

Who Can Open a Franchise in Vietnam?

Both Vietnamese and foreign individuals or organisations can participate in franchising activities, either as franchisors or franchisees.

However, they must meet specific legal conditions depending on their role.

Franchisors must have a proven business model that has been operating for at least one year before franchising. This requirement ensures that the business concept is viable and replicable.

Franchisees must have the legal capacity to conduct business in Vietnam and must comply with all licensing and registration requirements.

Key Requirements for Opening Foreign Franchises in Vietnam

Pre-requisites and Required Documents for Franchising in Vietnam

Foreign franchisors must register their franchising activities with the Ministry of Industry and Trade before granting franchises in Vietnam.

The registration dossier typically includes the franchise disclosure document, financial statements, intellectual property certificates, and legal documents of the franchisor.

All foreign documents must be consularly legalised and translated into Vietnamese.

This process ensures transparency and allows authorities to verify the legitimacy of the franchisor.

Franchise Agreement Between the Franchisee and the Franchisor

The franchise agreement is the core legal document governing the relationship between the franchisor and the franchisee.

Under Vietnamese law, this agreement must be in writing and include essential terms such as rights and obligations of the parties, franchise fees, duration, termination conditions, and dispute resolution mechanisms.

The franchisor is also required to provide a disclosure document to the franchisee at least 15 days before signing the agreement.

This disclosure requirement is designed to protect franchisees by ensuring they have sufficient information to make informed decisions.

Setting Up a Foreign-Owned Business Franchise in Vietnam

How to Set Up a Foreign-Owned Franchise

Foreign investors typically establish a legal entity in Vietnam before operating a franchise. This process involves obtaining an Investment Registration Certificate under the Law on Investment 2020 and an Enterprise Registration Certificate under the Law on Enterprises 2020.

Once the company is established, the franchising activity must be registered with the Ministry of Industry and Trade.

The entire process may take several weeks to complete, depending on the complexity of the investment structure.

Legal Responsibilities of a Franchise Owner

Franchise owners must comply with a wide range of legal obligations, including maintaining quality standards, protecting intellectual property, and ensuring accurate reporting.

They must also comply with tax regulations, labour laws, and consumer protection rules.

Failure to meet these obligations can result in penalties or termination of the franchise agreement.

Fees and Costs for Registering a Franchise in Vietnam

The official government fee for registering franchising activities is relatively modest, typically ranging from 10 million VND to 20 million VND, depending on the scope and complexity.

However, the total cost of launching a franchise can be significantly higher when factoring in legal services, document legalisation, translation, and operational setup.

Franchisees must also pay franchise fees, which may include initial fees, ongoing royalties, and marketing contributions.

These costs vary widely depending on the brand and industry.

Goods and Services Prohibited in Franchise in Vietnam

Vietnamese law prohibits franchising activities involving goods and services that are banned under national regulations.

These include illegal products, counterfeit goods, and services that violate public order or morality.

Additionally, franchisors must ensure that their business model complies with all applicable laws, including advertising, competition, and consumer protection regulations.

Changing a Franchise’s Registered Information

If there are any changes to the franchising arrangement, such as modifications to the business model, ownership structure, or scope of activities, the franchisor must notify or register these changes with the Ministry of Industry and Trade.

Failure to update registered information can lead to administrative penalties and affect the validity of the franchise operations.

Compliance and Penalties

Vietnam imposes strict penalties for non-compliance in franchising activities.

Operating a franchise without proper registration, failing to provide disclosure documents, or violating contractual obligations can result in fines, suspension of operations, or revocation of licenses.

In serious cases, legal disputes may arise, leading to financial losses and reputational damage.

Therefore, maintaining compliance is essential for long-term success in the Vietnamese franchise market.

FAQs

Can a Foreign Franchisor Terminate a Franchise Agreement at Will in Vietnam?

No, termination of a franchise agreement must comply with the terms specified in the contract and applicable laws.

Unilateral termination without valid grounds may result in legal disputes and compensation obligations.

What Are the Penalties for Operating an Unregistered Franchise?

Operating a franchise without registration can result in administrative fines, suspension of business activities, and potential legal action.

Authorities may also require the business to cease operations until compliance is achieved.

How Long is a Franchise Registration Valid?

Franchise registration does not have a fixed expiration period as long as the franchising activities remain unchanged and compliant with regulations.

However, any significant changes must be reported to authorities to maintain validity.

Conclusion

Launching a franchise in Vietnam offers substantial opportunities for growth and expansion, particularly in a market that continues to embrace international brands and modern business models.

However, success in franchising requires more than just a strong brand—it demands strict compliance with legal requirements, careful planning, and a deep understanding of the local market.

By following the regulatory framework and best practices outlined in this guide, investors can confidently establish and grow their franchise operations in Vietnam’s dynamic business environment.