7-Eleven will be opening a convenience store in Ho Chi Minh City in the coming days. The popular chain will open in the lobby of a commercial office building on the edge of the Central Business District.
The structure has a master franchise agreement with a Vietnamese franchisee owned in part by IFB Holdings which also currently runs the Pizza Hut and Coffee Bean and Tea Leaf chains.
7- Eleven plans to have over 100 stores throughout Vietnam within three years, and 1,000 stores in ten years, serving signature products and uniquely designed products.
The key challenge for foreign owned convenience stores is the “economic needs test” for majority foreign owned retail outlets, where they open more than one store in an area. The ENT does not apply on retail outlets with less than 500 square feet, in areas designated for retail activities (i.e. shopping malls or similar designated areas). This accounts in some cases for the use of a franchise model or outlets majority owned by local enterprises or shareholders.
The economic needs test was due to be scrapped under the provisions of the Draft TPP Agreement, within 5 years of coming into effect, but it is currently not clear whether Vietnam will follow through with this in the absence of the TPP.
There are currently two other Japanese convenience stores operating in Vietnam, Family Mart and Minister.
7-Eleven operates over 56,000 stores in 19 countries, and is best known for their delicious Slurpee drink.