Low-cost café franchising booms despite Covid
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Despite the Covid-19 pandemic, more and more low-price cafés are franchising and doing well. At 9.00 every day a Napoli café franchisee on Dong Nai Road, District 10, HCMC is crowded. Its owner, Hoang, says: “We directly serve hundreds of customers a day. The number of customers making orders via apps is double that.”
A café franchised by Milano on Pham Van Chieu Road, Go Vap District, also gets hundreds of customers daily, one of its employees says.
Many other similar outlets are also making good profits despite the pandemic, mainly selling through apps and e-commerce websites.
Nguyen Duc Hung, the founder of Napoli Coffee, said that after starting in 2010 his company has so far franchised 3,000 outlets which fetch hundreds of billions of dong annually.
“We franchise an average of two to three coffee shops a month. Some of our partners want to open more shops though they already own five”.
Now there are thousands of Milano franchisees across the country. Trung Nguyen E-Coffee franchised coffee shops are present in 54 cities and provinces.
The franchisors do not seek royalties for their trademarks or other such fees, and most of their profits come instead from the construction and decoration of coffee shops or sales of packaged coffee and beverages they produce
Napoli offers three franchising packages costing VND70-350 million for cafes of 50-100 square meters in size. The packages include a five-year warranty, decoration, furniture, lighting, uniforms, and the coffee-making process, and exclude the costs of sanitary equipment and salaries.
Trung Nguyen E-Coffee offers franchising packages worth VND65-175 million.
Le Anh Tu, a lecturer at Van Lang University in HCMC, said the low-price café franchising model thrives despite Covid because franchisors support franchisees a lot, and products are sold at reasonable prices like VND12,000-30,000 for a cup of coffee.
Questions & Answers
Q.How do these low-cost coffee franchisors make their money?
How do these low-cost coffee franchisors make their money?
The franchisors do not charge royalties for their trademarks or other fees. Their profits come mainly from the construction and decoration of the coffee shops, or from selling packaged coffee and beverages they produce.
Q.What is the cost of a Napoli franchise package?
What is the cost of a Napoli franchise package?
Napoli offers three franchising packages ranging from VND70-350 million. These are for cafés between 50-100 square meters in size and include a five-year warranty, decoration, furniture, lighting, uniforms, and the coffee-making process.
Q.What is included in Napoli's franchise packages and what is not?
What is included in Napoli's franchise packages and what is not?
The packages include a five-year warranty, decoration, furniture, lighting, uniforms, and the coffee-making process. The costs of sanitary equipment and staff salaries are not included in these packages.
Q.Why is the low-price café franchising model successful despite the pandemic?
Why is the low-price café franchising model successful despite the pandemic?
The model thrives because franchisors offer significant support to their franchisees. Also, the products, such as a cup of coffee, are sold at very reasonable prices, typically between VND12,000-30,000.
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