Franchises projected to grow 10%

Thailand’s franchise industry is expected to grow by at least 10% this year, as the business has proved lucrative and profitable, notably in the food and beverage, services, beauty and spa, retail and education sectors, says the head of the Business Development Department.

Banjongjitt Angsusingh, director-general of the department, said the country’s franchise prospects remain promising, with the industry expected to grow to 330 billion baht this year from about 300 billion in 2016.

More importantly, the government is committed to supporting and promoting Thai franchises to expand overseas, particularly in Asean, said Ms Banjongjitt yesterday at the “Franchise B2B 19 Fair”, held on April 26-27.

There are 29 Thai franchises operating in 38 countries, including Black Canyon, Index Living Mall and Wongpanit, while there are 55 foreign franchises operating in Thailand, largely in the food and beverage sector.

Overseas franchises are estimated to earn Thailand some 70-80 billion baht from management fees and franchise costs, mainly in the food and drinks, bakery, beauty and education sectors.

Thailand has 1,519 franchise operators, with 38% in retail, 28% in food/drinks, 23% in the service sector, 6% in education and 5% in beauty and spas. Some 1,300 are registered as juristic persons and the remainder as individuals.

She said the department this year will focus mainly on upgrading Thai franchises to have better systematic management and to achieve international quality standards.

The government is working on developing Board of Investment incentives to promote Thai franchises globally. Apart from tax perks, the Commerce Ministry aims to promote at least 300 Thai franchises and 1,800 branches globally between 2016 and 2018.

Woravut Nisapakulthorn, managing director of Miss Mamon Co, the Mamon cake franchise owner, said the Thai economy has not yet fully recovered and urged the government to come up with additional measures to support franchise businesses, including training, network development and soft loans.