1. Definition * In USA: Franchise is a contract or agreement which Franchisor allows Partner has right to do business on trade - name of franchisor.

Franchisee has to pay for franchisor direct or indirect fee (franchise fee). * In VN: (according to law???) Franchise is commercial activity that Franchisor allows and requires Franchisees themselves to do business on following conditions: Business goods or service depends on organization, trade - name, commercial name, business Secret, slogan sentence, and imaginational company so on of Franchisors. Franchisor has to control and help partners in business operation.

2. Advantages for Franchisees: - Have little risk in business: if opening a new company we have to opposite with many problems such as cost of Marketing and Promotion, bankrupt Because we have little experience and spend much time to learn and set up experience in business activity. If we carry out franchise system we are trained, helped and learnt many experience in management, successful secret (know-how), operative method by Franchisor. Maybe they meet not only success but also failure, so Franchisors have been gathered many experience on market. We also must not build and set up relationship in first time as other business. Franchisors will show us secret in Business. - We have chance to use trade - name of Franchisor: In present, on market there are many products and service with the same value using. These Products are supported by many another suppliers. That why to set up a well known trade name and known by many customers about products and service for our company is very difficult. - Having opportunity use many sources: Franchisor will help franchisees set up trading location, comply with business planning, build marketing strategy, operation progress and business projects. The Franchisees only concentrate to manage business activity of company by themselves. - Franchisees will be bought material and products with cheap price or received a good discount from franchisor: Buying material and good with low price is one of the most advantages in competition on market. When market has large changing such as short of material franchisors will have priority in supplying firstly for partners. Therefore, partners will have opportunity to stable resources; avoid affecting from changing of market. - Being easy to bring profit: Benefit of Franchisee from operating under the name and reputation (brand image) of the Franchisor, which is already well established in the mind and eye of the public. - Being trained by Franchisors: The Franchisors trains for staff of Franchisee in all area of the business such as manufacture, preparation, accounting, business control, marketing, promotion and merchandising - Financing the business may be easier: Banks are sometimes more likely to lend money to buy a franchise with a good reputation.

3. Advantages of Franchisors: - About capital: as Franchisees use capital of them so franchisors do not have to invest money into company. It allows franchisor not to support asset or capital with buyers. - Bring a lager business system, not only in nation country but also over the world. - With low capital investment so it is easy to bring high profit. - Having speed to develop high, expand brand name and destination rapid. - If open in International Market is easier than by having attending of the same local partners. - Although having wide system, Franchisors still have right to control distributions progress, quality of products, service through regulation, agreement of Contract Franchising. The Franchisees can always speak to their Franchisor or a fellow franchisee to discuss their business challenges or problem something a non franchised business can almost never do. 4. Example in successful franchising in Viet Nam: - Pho24 began to be built in 2003, basic on regulation such as time franchise, fee, checking, controlling. Moreover, carrying out marketing very well so this system develop fast such as in Viet Nam Pho24 has more 50 stores, now, Pho24 has many stores into Hong Kong, Japan, Korea, Philippines, Australia, Malaysia, Taiwan and Singapore. - With experience of Pho24: there are 4 conditions for partners when buy franchise is: i. Putting all believe in pho24 business form; ii. Understanding clearly local market; iii. Having managing ability; iv. Having enough capital. Pho24 is always ready helps and put interest of Partners firstly, such as help them invest safely, introduce customers for them, help them in being easy borrow money from banks. Price of franchise is 7.000 USD in Viet Nam and 12.000 USD at Oversea.