FRANCHISING REVIEW: FRANCHISE MARKET FOR HIGH-END COFFEE SHOPS IN VIETNAM AFTER JOLLIBEE M&A THE COFFEE BEAN AND TEA LEAF

After the Jollibee acquired the global brand coffee chain, Coffee Bean and Tea Leaf, what Starbuck Vietnam should concern about? and will the ice of high-end coffee chain franchise market in Vietnam will be gloomy or not?

The press had many analysis articles analyzed a global picture of the M&A deal of Jollibee acquired the global coffee-chain, Coffee Bean and Tea Leaf for a price tag of $350 million to penetrate the coffee chain market worldwide. As for Red Franchise, we focus on analyzing the impact of this typical deal within the Vietnamese coffee-chain market in general and the Vietnamese franchise market in particular.

We have to remind that the partner of Jollibee in the mentioned deal is Viet Thai International, the main implementation partner of Highlands Coffee brand that dominates the coffee-chain market in Vietnam with more than 300 stores today, this outlet quantity like a dream for any current middle-class or high-end coffee chain in Vietnam. We referring to emphasizing that, with Viet Thai International, a competent and knowledgeable Vietnamese market, The Coffee Bean and Tea Leaf in Vietnam will be positioned and approached the high-end segment to become direct competitors of Starbucks in Vietnam, instead of the franchising partner- IFB Holding as before.

New York Dessert Café in-turn left Vietnamese lover since July 2016, Gloria Jean’s also left in June 2017, if The Coffee Bean and Tea Leaf did not have an above deal, they would probably say goodbye shortly too, after notifying the press their losses. But Starbucks will face a very strong competitor when The Coffee Bean and Tea Leaf is transferred to a connoisseur who has made his way to the Vietnam market with the strong resource provided by Viet Thai International.

The segment of the high-end coffee chain market waits for changes to see how Jollibee and Viet Thai International will “fashionable” The Coffee Bean and Tea Leaf brand after the successful “popularization” of the flagship Highlands Coffee brand. Will The Coffee Bean and Tea Leaf go face-to-face with Starbucks or will it have a strategy to reach high-end markets by dodging Starbucks to find its own niche in the fastidious market or not?

And is there any chance for The Coffee Bean and Tea Leaf to tear up and do franchising instead of developing a chain model like Starbuck or Highlands Coffee themselves? While the high-end coffee shop market will have many of the aforementioned changes, according to Red Franchise’s review, perhaps, the Vietnamese franchise market will not change too much, if any, it just adjusts a partner who received Master Franchise from The Coffee and Tea Leaf only or the certain changes in the significant middle-class brand like Highlands Coffee with the franchising program when Jollibee suddenly changed the investment plan after the above M&A deal. Perhaps time will tell us, and for those investors who want to buy a franchise of the Highlands Coffee should contact this brand to see if they can expand their opportunities or not.

VO QUOC HOANG – SPECIALIST IN FINANCE & LEGAL