Buying a restaurant in Vietnam is a common choice for foreign investors who want to start an SME in this beautiful country. According to our research, the food and beverage business is one of Vietnam’s top most lucrative ideas for small businesses.
The 2022 F&B market report by iPOS.vn said Vietnam has nearly 338,600 restaurants/cafés. The revenue of the F&B industry in 2022 is estimated at nearly VND 610 trillion. In 2023, the market value of F&B business is expected to increase by 18% compared to 2022, reaching VND 720 trillion.
Even though this seems to be a profitable idea, the F&B industry is actually pretty competitive in Vietnam. Therefore, you must research carefully before making any big investment decision. With that in mind, here is the list of 8 things you need to check before buying a restaurant in Vietnam.
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Location is one of the first factors to look at when buying a restaurant in Vietnam. The location can immensely affect your success, so make sure to choose carefully.
Here are some questions to consider when choosing your ideal location:
When conducting due diligence, you need to request financial documentation such as tax returns, profit and loss statements, and balance sheets from the current owner. This step will give you a better idea about the restaurant’s financial health and predict its future ability to produce profits.
Moreover, it is essential to review any existing contracts, including leases and supplier contracts, to make sure that you fully understand your responsibilities as the new owner.
Having a precise valuation of the business for sale is crucial. When buying a restaurant in Vietnam, you can do this by many methods:
Before buying a restaurant in Vietnam, it is a good idea to check out its reputation. You can simply do this by looking at their website and social media pages. Also, remember to check their Google business profile and Tripadvisor account, too.
Reviews from customers can give you valuable insight into the restaurant’s strengths and weaknesses and help you make an informed decision about whether it’s a good idea to buy this business or not.
Reviewing the customer data is one step of conducting due diligence before buying a restaurant in Vietnam. It’s important to understand the restaurant’s customer base, such as the number of loyal customers, their preference, and their purchasing power.
By doing so, you can better understand the restaurant’s current situation and have a more accurate future prediction.
You need to inspect the restaurant’s facilities carefully before buying a restaurant in Vietnam. Remember to check out the kitchen, bathrooms, and dining areas. A clean and well-maintained area is essential for food safety and quality control.
Getting to know the employees before buying a restaurant in Vietnam is recommended for a smooth transfer of ownership. By talking to the staff, you will gain insight into the daily operation process, their working culture, and the current management style of the restaurant.
If you have time, spending a few hours interviewing some employees will provide you with valuable information about their personalities, skill levels, and career plans. Also, make sure to check that they are happy to stay on, it would be difficult if as soon as you take over your core team resign.
There are all types of restaurants in Vietnam, so you have to know exactly what you want when buying a restaurant in Vietnam. Answer these questions might give you a better idea of what to look for:
The key is to find a gap in the market but also to make sure there is a market in the gap. Is your target audience big enough? Make sure you have conducted market research and a draft financial forecast.
Each option has its own pros and cons and is suitable for different purposes. If you want to skip all the setup processes and start generating money right away, then buying a restaurant for sale is a better idea. However, if you want to own a unique restaurant that caters to your liking, you should open a new one. Learn more about how to open a new restaurant in Vietnam through our guide here.
The F&B industry is open to foreign investment, which means foreigners can open a bar, lounge, cafe, or restaurant in Vietnam.