Restaurant chains: fine line between winning and losing
VietNamNet Bridge - A report from CBRE Vietnam real estate service provider, a shows that the number of restaurants in HCMC increased sharply in 2016 and will continue a rapid upward trend in 2017. 


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Of the clients who have asked to lease retail premises at CBRE Vietnam, 50 percent operate in the food sector.

In 2016, Mekong Capital, through Mekong Enterprise Fund III (MEF III), injected $6.9 million into the Wrap & Roll restaurant chain.  

With investment capital 2.6 times higher than the amount it poured into Golden Gate, Mekong Capital expected more profits from Wrap & Roll than from Golden Gate.

By investing in Golden Gate, Mekong Capital became the owner of 67 restaurants operating under 11 brands which have seen a high growth rate of 25 percent per annum in 2010-2013 and growth rate of 32 percent in 2014-2016.

The gross profit from restaurant brand is 20-30 percent on average, while the figure is up to 50 percent from Vuvuzela and City Beer Station. 

Golden Gate has had profit nine times higher than the initial investment capital, which means a yield of 800 percent after six years.

CafeF cited a report as showing that Golden Gate revenue was VND1.85 trillion in 2015, while the figure rose by 40 percent to VND2.628 trillion in 2016.

Huy Viet Nam, the company which owns well-known brands such as Mon Hue, Pho Ong Hung, Com Tho Chay, Great Banh My & Café and Pho 99, has $65 million worth of capital from investment funds. 

With a 15 percent revenue growth rate, the chain of four Con Ga Trong shops is being eyed by investment funds.

A report from CBRE Vietnam real estate service provider, a shows that the number of restaurants in HCMC increased sharply in 2016 and will continue a rapid upward trend in 2017.

Duong Quoc Nam, the owner of Con Ga Trong, revealed that one investment fund from Singapore has suggested developing Con Ga Trong brand in China.

“It is not easy to develop restaurant chains,” said Nguyen Thi Nga, the owner of Au Lac Brazil chain. “I can say for sure that eight out of 10 shops have to shut down”. 

Nga has shut down two restaurants, one in Nha Trang and one in HCM City, because of unsatisfactory business results. 

Before receiving capital from Mekong Capital, Wrap & Roll had opened 12 restaurants, but later had to close four restaurants.

An analyst commented that one of the biggest difficulties for investors in Vietnam is the expensive retail rent. “The retail premises rent contract is only valid for 3-5 years,” he said.


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Kim Chi

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