They were taking part in a panel discussion organised by the International Retail and Franchise Business Research and Development Centre (IRF) at Sripatum University.

7-Eleven Thailand general manager Thanapoom Nate-arpa questioned whether the proposed legislation, which went through four public hearings in the term of the Thaksin administration, was more protective than conducive to franchise businesses in Thailand.

"There are about nine articles that protect franchisees, while there is only one article that protects franchisers from any misdeeds by franchisees," he said.

7-Eleven is one of Thailand's largest franchise businesses, with about 2,700 convenience stores.

One of the much-contested issues was the prerequisite disclosure of a franchiser's operation or business manual to franchisees. A common practice is to require franchisees to deposit part of their capital with the franchiser before this disclosure, but this will be illegal if the draft of the act becomes law.

Pravit Pong, managing director of the Black Canyon restaurant and coffee-shop chain, said he feared that without any financial commitment, franchisees would be able to study the manuals and steal franchisers' businesses.

The two major franchisers also claimed the draft law appeared to give too much power to licensers, who would be able to reject or discontinue their arrangements.

Malaysian franchise consultant Afandy Faiz warned that strict laws and regulations might thwart potential entrepreneurs from registering their businesses as franchises. Malaysia's Franchise Act, for instance, has encouraged people to find legal leeway, such as licensing their businesses instead of franchising them.

IRF figures show Thai franchise businesses accounted for less than 10 per cent of retail trade last year.

However, IRF director Peerapong Kitiveshipokawat is confident the figure will grow 20 to 30 per cent this year. In a mature economy like that in the US, franchises contribute about US$624.6 billion (Bt21.97 trillion), or 3.9 per cent of the private sector, he said.

Ki Nan Tsui

The Nation