Franchise operators who gathered at a Department of Export Promotion seminar shared the common view that Thai franchises should have effective laws to support them if they venture overseas. At the same time, the laws should offer protection to foreign franchise operations looking to invest in Thailand.

The Business Development Depart-ment is currently drafting franchise laws, which should be proposed to Parliament before the end of this year, after input from private enterprises.

Pranithan Sethabutr, chief executive of Yum Restaurant International (Thailand), operator of Pizza Hut and KFC brands, said the new law should help facilitate franchisee operations.

Local small investors are attracted to franchisee businesses because of the low initial investment and the law should shield them from unfair practices by franchisers. Likewise franchisers should be protected.

"The laws should support fair conditions and protect against conflicts between franchisees and franchisers," Pranithan said.

The Commerce Ministry has encouraged Thai franchise businesses to go international, particularly food and services businesses. The seminar was entitled "Strategies to be a successful franchise enterprise overseas".

Kunyaphan Raengkhum, deputy director-general of the Department of Export Promotion, said that the government believed franchise businesses could increase the country's foreign-exchange income.

He said franchise businesses in the US made billions of dollars for their country, so the government will focus on increasing the efficiency of Thai businesses so they can compete overseas. It will give particular support to food, spa, Thai massage and service businesses.

Kunyaphan said Thai service businesses are highly efficient and giving them "know-how" will help them to become successful franchisers and franchisees.

He said the government would support the creation of about 12,000 Thai restaurants in overseas countries, particularly in China, Asean countries, the US and Japan.

Franchise businesses succeed when they "connect" with their target countries. said Pravit Jitnarapong, managing director of Black Canyon (Thailand).

"Enterprises should understand the demands and attitudes of the local people so they can respond to the needs of the market," he said.

Currently, Black Canyon Coffee has about 140 branches in Thailand and 15 overseas, all of which are operated by franchisees. Its overseas markets are the United Arab Emirates, Burma, Singapore, Indonesia, Cambodia and Malaysia.

CP Group's deputy senior manager Pinit Kungwajakit said the most important ingredient in a successful franchise enterprise is human resources.

He said Thai food was very famous overseas, creating a big opportunity for Thai franchise businesses. However, he suggested that Thai enterprises maintain food safety standards, in order to increase customers' trust.

Petchanet Pratruangkrai

The Nation