Thailand is experiencing a rapid growth in the middle class sector which is fueling the need for businesses that offer new and international products and services. Along with the establishment of the ASEAN Economic Community (AEC) in 2015, Thailand is seeing enormous opportunities for businesses both within the region and from overseas. As part of the AEC blueprint, the region now aims to have free flow of goods, services, investment, capital and labor. This is significant as businesses now have access to many different growth strategies. One of the most convenient ways of investing in business is by the establishment of franchises.
Franchising is not a new business format in Thailand. It already has over 400 franchises as well as over 12,000 franchisees within the Kingdom. However, with advent of the AEC, franchising has been given greater advantage, as expansion within ASEAN is now much easier, more cost-effective and efficient. In fact, international expansion throughout ASEAN is promoted by virtue of the AEC’s strategic blueprint goals.
Thailand has no specific franchising laws in itself so it relies on separate laws to regulate the establishment and operation of a franchise, or more specifically, the operating system. Depending on the business type, a typical franchise in Thailand may require an examination of over 10 separate Acts and regulations. The most important is the Civil and Commercial Code along with the various Trademark Acts, the Trade Secrets Act B.E. 2545 and the Unfair Contract Terms Act B.E. 2540.
For this reason, franchising in Thailand can often be seen as a highly complex structure to pursue. There are also concerns about Intellectual Property rights which could be infringed. Thailand is generally a jurisdiction where freedom to contract reigns. As such, it is important that a contract is well drafted in order to ensure that both the franchisor and franchisees are protected. Both parties have different issues to consider and a good franchise lawyer must have a good understanding of this and find a good balance between the two.
What We Do
- Master Franchise Agreements
- Contract Review/ Drafting
- Due Diligence for Franchisor/ Franchisees
- Foreign Business Licensing
- Creation of Franchise Business Packs for Marketing
- Exclusive Distribution Agreements
- Employment Agreements
- Company Incorporation
- Registration of Intellectual Property rights