What has happened to the "brand king's" fast-food chains?
VietNamNet Bridge - Having to shut down some shops, Johnathan Hanh Nguyen, a renowned businessman dubbed ‘the branded goods King’, is facing  problems with his fast food chains.

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More than 10 years ago, ‘fast food’ in Vietnam meant KFC, Lotteria and Jollibee. However, the fast food market has expanded rapidly in recent years after a series of the world’s well-known brands such as Pizza Hut, Domino’s Pizza, Burger King, Subway and McDonald’s landed in the Vietnamese market.

The fast food shops opened by Johnathan Hanh Nguyen appeared in that boom.

Having to shut down some shops, Johnathan Hanh Nguyen, a renowned businessman dubbed ‘the branded goods King’, is facing  problems with his fast food chains.
Burger King came to Vietnam in 2012 with the plan to open 60 shops in the first five years of operation. However, only 16 shops have been opened.

Le Hong Thuy Tien, CEO of IPP, the wife of Hanh Nguyen, said about $40 million would be pumped into Vietnam to develop Burger King, while capital would be even higher if IPP can find good retail premises.

The average investment rate for a fast food shop is $200,000, but the figure is $500,000 for Burger King, according to Hanh Nguyen, because it is costly to install a standard kitchen system.

Besides, he also has to pay high rent for premises. At a business conference in HCMC in 2014, Hanh Nguyen said his business secret was the retail premises. Sources said that the businessman accepted to pay 20 percent higher than rivals to obtain retail premises in advantageous positions.

However, despite the heavy investment, some Burger Kings still hadvto close after four years of operation. In mid-February 2016, a Burger King on Cong Hoa street announced the closure, just one month after the shop on Dien Bien Phu was closed to give the retail premises back to the landlord.

A renowned branding expert said that from the very beginning, the franchiser decided to follow the ‘Taste is King’ strategy, aiming to impose the American style in Vietnam.

Hanh Nguyen, interviewed by Forbes last August, admitted that franchising is the business sector that brings the biggest challenges to IPP.

To date, only Dunkin’s Donuts and Illy have broken even, while Popeyes Chicken and Domino’s Pizza are facing difficulties. 

As for Burger King, when the first shop opened in late 2012, the businessman initially planned to reach the break-even point after five years, but has re-planned to seven years.

In the latest news, Domino’s Pizza has been fined VND4 million because it used  expired materials.

Both the material supplier and Domino’s Pizza explained that officers made mistakes when using the stamps, which showed the wrong dates.


Tri Thuc Tre
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