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Published on December 15, 2007

In yesterday's seminar entitled "The Conclusion of Thai Franchise Business Outlook in 2008 and Business Trend in 2009", Somjit Likitsathaporn, managing director of Franchise Focus magazine, said Thai franchise businesses were closing at the same rate as in 2006, although more negative factors were impacting the sector this year.

"The main factor is still the failure in branch management," she said. "The economic slowdown is another factor, but has not affected every business. The restaurant and food sectors still show good performances and continue to expand their branches. For next year, Franchise Focus will emphasise education for franchisees to know how to manage their branches to become a success."

She said new Thai franchise businesses this year had grown by just 10 per cent, against an average of 25 per cent, due to the sluggish economy. Small and medium-sized enterprises do not dare to invest in new businesses. There have been 5,000 new franchisees this year, a 50-per-cent decline from the usual number of 10,000.

However, the company forecasts that franchise business growth will recover next year and rebound to increase by 20 per cent, Somjit said.

"Some franchises stop expansion because they have enough branches and switch to develop the existing businesses. Others choose to enlarge their businesses by themselves instead of through the franchise system," she added.

At present, there are 47,660 franchise shops in Thailand. This year, master franchises have increased from 306 to 340, according to a Franchise Focus survey.

Somjit said the company would host a Business Opportunity franchise exhibition at Impact Muang Thong Thani from February 28 to March 2, 2009 to promote Thai franchise businesses.

Nalin Viboonchart

 The Nation