Restaurant chains in Vietnam face challenges

Born in 1988, Nguyen Ha Linh started her entrepreneurial career when she was a freshman at Hanoi University. After a chain of English Centres and coffee shops, Linh finally has her own restaurant chain called Koh Samui, specialising in Thai food. Despite its trademark and reputation, these restaurants are facing difficulties. 2 out of 5 restaurants had to close.

To be profitable, restaurant chains must expand. However, large-scale expansion is not an easy feat. Sometimes, certain locations have to close because of poor performance. But the pressure to expand is always present.

"When I opened the first restaurant, it quickly expanded to 5 in over a year, which causes lots of problems. Fortunately, I have some new shareholders involved in the management of the restaurant chain, helping me be more assertive in shutting down branches that are no longer appropriate for our long-term vision", said Nguyen Ha Linh, Owner of Koh Samui Restaurant Chain.

The benefit of chain businesses is that profit can be earned from both direct business activities and franchising. It is estimated that, in recent years, this business model has grown by 20% - 30% per year. However, rapid expansion of the chain is also a double-edged sword, as it depends largely on the performance of the new additions. Otherwise, the whole brand name may suffer. Many people still think that the restaurant business is profitable and easy, but actually, it’s the most challenging and competitive of its kind.