Franchising is like when a big company shares its brand name and way of doing business

with someone else, who then runs a store or business using that name and system. The big
company is called the franchisor, and the person running the business is the franchisee. The
franchisee usually pays a fee to the franchisor for the right to use their name and system. So,
basically, franchising is when a big company lets someone else use their name and way of
doing things to run a business.
One of the benefits of franchising is business support. Depending on the terms, they have the
right to use the brand, be provided with equipment, advertising strategies, etc. Besides, when
opening a franchise with a recognizable brand, the brand recognition is high, everyone well
known. In general, franchising has a higher failure rate due to fear of corporate support.
There are also disadvantages, not having complete control over their business activities. They
must follow the rules. Restrictive regulations and potential conflicts due to differences in
personality and management style.
Liu nha
Based on the analysis of the food industry, our team has decided to choose the BH.nong food
brand as the franchise business model.
1. Brand history
Clean specialty brand Bh.nong was founded by a young lady - Minh Nga. The company was
founded in 2016, Bh.nong is a nutritional food brand created from the Baton brown rice
variety of the Bh.nong people. BH.nong was founded by young people with a passion for
bringing mountain and forest specialties to the world. everyone, contributing to the
development of the homeland. Bh.nong's business model is production and distribution to
agents and distributors across the country. The mission of BH.nong company is to support the
local community through volunteer work and the sharing of earnings. With high-quality
goods and compelling brand narratives, Bh.nong company has established a strong reputation
in the marketplace.

2. Considerations and Challenges for the expansion in Vietnam:

Since the covid -19 epidemic, consumers tend to focus on health and prioritize clean quality
foods. Busy lifestyle, no time to cook, so people look for convenient foods that still ensure
quality. BH.nong provides products made from brown rice, mountain and forest specialties,
which are difficult to find in the market, creating a competitive advantage for franchisees.
Currently, Bh.nong produces its own products with a 600 square meter factory, meeting ISO
22000:2018, HACCP, food hygiene... Products from Bh.nong have obtained ISO 2000:2018
certification and certified for food safety and hygiene. Bh.nong distributes over 200 agents
and distributors nationwide using a B2B business strategy. These agents all deploy sales on e-
commerce platforms. Although it does its own communication, Bh.nong's 2021 profit
reached 30%. Bh.nong's 2021 revenue is 10 billion. Bh.nong brown rice has swiftly
established a robust consumer market in Ho Chi Minh City, Hanoi, the Western area, Da
Nang City,… because of its delicious and nourishing product quality.
Regarding franchise costs: The cost of a franchise includes the license to use the name, the
production and operating system, and occasionally additional expenses such as
documentation, training in accordance with protocols, and training in accordance with the
regime other supporting information. Financial considerations to match franchise costs

Legal issue: Understand the provisions of Vietnamese law and contract terms, ensure
compliance with regulations and take preventive measures to avoid legal risks and avoid
unwanted damages.
The market for nutrition goods has expanded significantly in our nation in recent years,
driven by intense competition from a variety of domestic and international brands and
products.Numerous well-known brands with significant financial potential and experience,
such as Vinanuts, An An, Dbfood, etc., are present in the specialty food sector. Even if the
bhnong brand is one of the most prosperous creative start-ups, the burgeoning marketing
brand still need a certain approach to draw clients.

Bh.nong's raw material source is 100% brown rice farmed by ethnic minorities in the
province of Quang Nam; this presents both a problem and a benefit for the company because
the raw material source is cleaner and retains the traditional cultural values of the people.
Severe weather in Quang Nam and the Central area as a whole can have an impact on output.
Storms and droughts make cultivating and raising upland rice more challenging every year,
which drives up the cost of raw material inputs. Additionally, a number of production
expenses have gone up as a result of the Covid-19 pandemic, which has had a major negative
influence on tiny start-up enterprises like BH.nong.

The store system is mainly sold through e-commerce platforms. Franchising requires
knowledge and experience in management and business strategy to bring profit. To avoid
management risks, it is necessary to make specific plans. The level of brand recognition is
not high, the marketing strategy is not effective.

3.3.3

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