Franchise in VIETNAM

Bud & Prairie are highly experienced legal consultants in Vietnam, offering expert legal assistance on intellectual property rights and franchising services. We specialize in helping clients protect their brand and expand operations in compliance with Vietnamese franchise laws.

As Vietnam becomes a regional hub for international business expansion, franchising in Vietnam has emerged as a powerful tool for growth, especially for brands aiming to enter Southeast Asian markets. Below is a comprehensive guide to franchising in Vietnam—covering legal regulations, registration procedures, and actionable best practices.


1. Understanding Franchising in Vietnam

1.1 Definition

  • Franchising is a business arrangement in which the franchisor permits the franchisee to operate a business using its trademark, branding, proprietary business model, and intellectual property rights. In return, the franchisee typically pays a franchise fee and ongoing royalties.

1.2 Types of Franchises

  • Product Distribution Franchise: The franchisee sells or distributes the franchisor’s branded products.

  • Business Format Franchise: The franchisee adopts the franchisor’s complete business system, including trademarks, training, and marketing strategies.


2. Legal Framework for Franchising in Vietnam

2.1 Franchise Law

  • The Law on Commercial Franchise (2005, amended 2018) governs all franchise operations in Vietnam.

  • Key regulations are provided by the Ministry of Industry and Trade (MOIT), including:

    • Franchise disclosure requirements

    • Registration procedures

    • Compliance guidelines

2.2 Key Requirements

  • Franchisor Eligibility:

    • Must have operated the business under the franchise system for at least one year.

    • Must have at least one business outlet successfully operating.

  • Franchise Agreement:

    • Must comply with Vietnamese laws.

    • Should be in Vietnamese or accompanied by an official Vietnamese translation.


3. Franchise Registration Process in Vietnam

3.1 Pre-Registration Considerations

  • Market Research: Analyze Vietnam’s economic environment, consumer trends, and legal context.

  • Legal Advisory: Consult a professional legal service specializing in franchise law in Vietnam and intellectual property rights.

3.2 Franchise Registration with MOIT

Required Documents:

  • Franchise Agreement: Clearly outlines the rights, obligations, and support provided.

  • Franchise Disclosure Document: Must include:

    • Franchisor’s business history

    • Financial statements

    • Intellectual property and business model

  • Proof of Operational Experience: Evidence of at least one year of business activity.

  • Business Registration Certificate: Confirms the franchisor’s legal standing.

Submission:

  • Submit to the Department of Industry and Trade (DOIT) at the local level.

Review & Approval:

  • Upon approval, the MOIT issues a Franchise Registration Certificate.


4. Franchise Agreement in Vietnam

4.1 Key Components

  • Grant of Franchise: Rights to use brand, trademarks, and proprietary know-how.

  • Fees & Royalties: Includes initial payments and ongoing royalties.

  • Duration & Renewal: Specifies the term of the contract and renewal conditions.

  • Training & Support: Covers onboarding, operational support, and marketing.

  • Termination & Dispute Resolution: Defines termination grounds and mechanisms such as arbitration or court proceedings.

4.2 Local Compliance

  • The contract must:

    • Be in Vietnamese (or with certified translation)

    • Follow Vietnam’s Commercial and Civil Code as well as IP law (especially trademark usage)


5. Operational Considerations for Franchises

5.1 Site Selection and Setup

  • Strategic Location: Select high-potential areas based on demand analysis.

  • Leasing Contracts: Ensure leases align with Vietnamese real estate laws.

5.2 Training and Support

  • Initial Training: Ensure alignment with the franchisor’s standards.

  • Continued Support: Regular updates, marketing tools, and operational coaching.

5.3 Quality Control

  • Brand Standards Compliance: Monitor the franchisee’s adherence.

  • Periodic Audits: Necessary to maintain brand reputation and consumer trust.


6. Challenges and Best Practices in Franchising

6.1 Key Challenges

  • Legal Compliance: Navigating franchise laws and local administrative processes.

  • Cultural Adaptation: Tailoring international brands to local market expectations.

  • Competition: Dealing with both domestic and global franchise competitors.

6.2 Recommended Best Practices

  • Partner with Local Experts: Local legal and commercial knowledge is crucial.

  • Market Adaptation: Customize branding and offerings for Vietnamese consumers.

  • Legal and Financial Advice: Work with a trusted franchise legal service provider in Vietnam, like Bud & Prairie.


7. Conclusion: Franchising in Vietnam for Sustainable Growth

With its growing consumer base and stable economic development, Vietnam offers substantial opportunities for franchisors looking to scale regionally. A well-prepared strategy—focused on legal compliance, franchise registration, and tailored operations—can position your business for success in this dynamic market.

At Bud & Prairie, we help protect your intellectual property rights, ensure franchise compliance, and facilitate seamless franchise entry into Vietnam.


Contact Us
For legal support or further advice on franchising in Vietnam, feel free to email us at:
📧 bud-prairie@bud-prairie.com

Patent Search

1. Patentability Search

Patentability search, also known as a novelty search, helps determine whether an idea is novel and involves an inventive step (non-obvious). The most comprehensive searches cover all types of prior art, giving inventors or organizations a clear view of the technology landscape. A patentability search should ideally be conducted during the ideation phase and prior to public disclosure.

A patentability search involves examining published patents related to your invention to assess whether the idea has already been patented. It also allows you to identify similar inventions, enabling refinement and improvement while avoiding potential infringement. This process can save significant time and cost before investing further in an idea that may not be patentable.

2. Freedom to Operate Search

A freedom to operate search (FTO) assesses how similar your product is to existing patents and evaluates the likelihood of infringing a patent by making or marketing your invention. This search is also referred to as a patent infringement search or right-to-use search.

Conducting an FTO search early in the innovation cycle helps research and development teams design around existing patents. Later, the results may indicate whether you need to obtain licenses from other patent holders to commercialize your product.

3. State of the Art Search

A state of the art search, also known as a patent landscape or product clearance search, examines the literature related to a specific industry or broader field. This type of search helps businesses identify competitors, track existing products, and gain market insights. Such knowledge supports informed strategic decisions throughout the innovation process.

4. Invalidity Search

An invalidity search, also known as a validity search, evaluates the strength of an existing patent. Companies conduct this search to determine whether the patent owner can legitimately enforce infringement claims. It may also be used to negotiate licensing fees or assess patent value. If prior undiscovered art is found during the search, the patent may be invalidated or deemed unenforceable. This search is typically performed after the patent has been granted.

5. Evidence of Use Search

An evidence of use search helps patent owners identify products that potentially infringe their patent rights. This search involves reviewing similar patents and gathering proof that a patent is being used in a way that infringes on the owner’s rights. Evidence of use searches are generally conducted after a patent has been granted and as it matures.

6. Search Databases

Patent searches can be conducted using various databases. Some databases are freely available, such as USPTO, Google Patents, Free Patents Online, and Espacenet. Others, including Thomson Innovation, Orbit, and Patbase, require a subscription. Each database differs in aspects such as data coverage, search engine features, and user interface.

Some of the most widely used databases include:

  • Google Patents: A user-friendly patent search tool powered by Google’s search engine.
  • Patentscope: A free database provided by the World Intellectual Property Organization (WIPO).
  • USPTO Database: The official database of the United States Patent and Trademark Office.
  • Espacenet: A European patent database maintained by the European Patent Office (EPO).

Additional major patent office databases include:

  • Canadian Patents Database (CIPO)
  • DEPATISnet (DPMA)
  • JP-PlatPat (JPO)
  • U.S. Patent Assignment Database (USPTO)
  • U.S. Patent Center (USPTO)

Inventors or applicants may choose to perform their own patent searches. They often have an advantage in understanding the technical field, common knowledge among skilled practitioners, and relevant terminology.

Patent drafting is a critical step in the patent application process, involving the preparation of the patent description and claims. It forms the foundation of every patent application, as the drafted specification becomes an integral part of the official patent document once the patent is granted. The quality of a patent draft directly influences how effectively the invention can be protected and enforced against third-party challenges.

Patent applicants—especially startups, SMEs, and individual inventors—should recognize that a well-crafted patent specification and precisely worded claims help establish clear boundaries of protection. This clarity makes it easier to defend the patent’s validity and scope in case of disputes or legal challenges.

A standard patent specification typically includes the following sections:

  • Field of Invention: Describes the general technical field to which the invention belongs.
  • Background: Discusses existing technologies (prior art) related to the invention and highlights their limitations or shortcomings.
  • Summary of Invention: Presents the objectives of the invention, its distinguishing features and advantages, and a concise explanation of the solution provided.
  • Brief Description of Drawings (if applicable): Provides a short description of any accompanying drawings, offering an overview of what each drawing illustrates.
  • Detailed Description of Invention: Offers a comprehensive explanation of the invention’s features. This section must be written clearly enough that a person skilled in the field can reproduce the invention based solely on this description. It should fully support all claimed features and describe their interrelationships.
  • Claims: The most critical part of the specification, claims define the scope of legal protection. Claims are categorized as independent or dependent. Every patent application must include at least one independent claim. Claims may be amended during the examination process, often becoming narrower than initially filed.
  • Abstract: A brief technical summary of the invention, intended to facilitate searches for similar inventions. The abstract is published alongside the patent application and, if applicable, a representative drawing.
  • Drawings (if any): Illustrations prepared in compliance with jurisdiction-specific requirements. Drawings are submitted as separate sheets to accompany the specification.

It is essential to educate SMEs, startups, and inventors on the importance of high-quality patent drafting as part of their broader intellectual property strategy. A poorly drafted patent may be vulnerable to invalidation or opposition, significantly weakening its protective value. By investing in professional drafting expertise, inventors can maximize the legal and commercial strength of their patents.

A patent is a legal right granted by the government to an individual or organization, which excludes others from making, using, selling, or importing the patented product or process without prior authorization. Patent filing or patent registration is the first crucial step for an inventor to protect their invention from misuse and infringement.

In Vietnam, there are three types of patents: Invention Patent, Utility Solution Patent, and Design Patent. Patents are granted to anyone who invents or discovers a new and useful process, machine, article of manufacture, or composition of matter, or any new useful improvement thereof. Patent filing is essential for securing definitive, enforceable intellectual property (IP) rights across all relevant jurisdictions. Filing a patent officially registers your invention, giving you the legal standing to take action against anyone who makes, uses, sells, or imports your invention without permission.

You should be aware of the patent examination process conducted by the Intellectual Property Office of Vietnam (IP Vietnam). This process begins with submitting a patent application to IP Vietnam and culminates in either the granting of a patent (if the invention meets the protection criteria) or a rejection (if the invention fails to meet these criteria).

We are here to assist with the entire patent prosecution process, including drafting a patent specification, translating it into the local language, filing the application, and negotiating with IP Vietnam’s examiners regarding the patentability of your invention in order to secure patent protection and rights.

An opposition proceeding is an administrative process available under the patent law in many jurisdictions, allowing third parties to formally challenge the validity of a pending patent application (pre-grant opposition) or a granted patent (post-grant opposition).

Once the patent application is published, an opposition may be filed within a specific time period prescribed by the applicable law. The opponent must state the grounds for opposition and provide any relevant evidence. If no opposition is filed during this period, the substantive examination of the patent will proceed.

Meanwhile, an applicant whose patent claims have been twice rejected may appeal the examiners’ decision to IP Vietnam, provided they have paid the required fee for such an appeal.

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