Challenges for foreigners running a restaurant business in Da Nang

Da Nang is one of the most attractive destinations in Vietnam for international tourists and is also a promising market for the F&B industry. Many foreigners have chosen this city to open restaurants, eateries, or cafes. However, alongside the opportunities, running a restaurant business in Da Nang also comes with various challenges that investors should anticipate.

1. Legal barriers and administrative procedures

Restaurant business activities fall under the food service sector - a conditional business line for foreign investors.
Some common difficulties include:

• Procedures for obtaining an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC) can be time-consuming
• Additional food safety and hygiene permits are required
• If alcohol is served, an alcohol trading license must be obtained
• Fire prevention and fighting regulations are quite strict

In addition, keeping up with and correctly understanding Vietnamese legal regulations is also a major challenge for many foreign investors.

2. Cultural and taste differences

Cuisine is heavily influenced by local culture. Many foreign-owned restaurants face difficulties because:

• The taste may not suit Vietnamese customers
• Prices may be higher than the general market level
• Service styles may not align with local customer habits

Balancing international identity with adaptation to the local market is a key factor for success.

3. Increasingly intense competition

The F&B market in Da Nang is growing rapidly, with:

• The presence of many international brands
• Large domestic restaurant chains
• Local eateries offering competitive pricing

Consumers now have more choices, forcing restaurants to:

• Invest in food quality
• Build a clear brand identity
• Create a distinctive customer experience

4. Human resource management

One of the major challenges is managing staff:

• Difficulty in recruiting skilled employees with good language abilities
• High turnover rates in the F&B industry
• Differences in working styles between Vietnamese and foreign staff

Additionally, if employing foreign workers, businesses must obtain work permits, increasing costs and administrative procedures.

See more: The difference between work permit extension and re-issuance in Vietnam

5. Operating costs and market fluctuations

Restaurant operating costs in Da Nang tend to rise:

• Rental prices in tourist and central areas are increasing
• Costs of raw materials fluctuate
• Marketing expenses to attract customers

Moreover, the F&B sector heavily depends on tourism and is therefore easily affected by:

• Low seasons
• Economic fluctuations
• Unexpected factors such as pandemics

6. Understanding the local market

Many foreign investors fail due to:

• Lack of market research before investing
• Incorrect identification of target customer segments
• Poor choice of business location

In Da Nang, consumer behavior differs significantly between:

• Tourists and local residents
• Domestic and international customers

7. Branding and marketing

Beyond opening a restaurant, maintaining and developing a brand is also challenging:

• Strong competition on platforms such as social media
• Dependence on customer reviews
• The need to invest in visuals, customer experience, and service quality

Running a restaurant business in Da Nang offers many attractive opportunities for foreigners, but it also comes with significant challenges related to legal compliance, culture, operations, and the market. To succeed, investors need thorough preparation, a clear understanding of Vietnam’s business environment, and a flexible, well-adapted strategy.

See more: Suitable business models for foreign investors in Da Nang