Potential winner franchishing likely to gain from current cirsis

The local franchise industry is expected to be a gainer in the current economic and political turmoil, which has led to job insecurity in the workplace.

Somjit Likitsataporn, managing director of Franchise Focus, the organiser of next year's 13th Opportunity and Franchise Fair, said Thailand had experienced a financial crisis in 1997 which forced many people out of their jobs, with many turning to franchising.

 "The local franchise industry was quite active in 1997 as many people, including those who lost jobs, sought new businesses that provided them with a more stable income," said Somjit

She added that the number of franchisees had jumped by more than 40 per cent year on year in 1997.

The 13th Opportunity and Franchise Fair will be held from February 26 to March 1 at Impact Arena Muang Thong Thani. Franchisors will put up more than 300 booths to offer new business opportunities.

According to a survey conducted by Business Opportunity & Franchise magazine at the beginning of this year, the number of franchised stores - either owned by franchisors or franchisees - rose by 13 per cent last year to 37,660 outlets.

The survey was conducted on about 300 local people in the franchise business, of which 61 per cent were based upcountry and the remainder in Bangkok.

The number of franchisors also jumped by 11 per cent to 340, of which 195 were in the food business, 40 in education, 35 in service, 30 in retail, 25 in beauty and 15 in the IT business.

According to the survey, about 50 per cent of individual franchisees were former employees while 38 per cent were former business owners. Half of the franchisees were between 31 and 40 years old, while 30 per cent were between 41 and 50. About 15 per cent were between 21 and 30.

"About 75 per cent of respondents in our survey pointed out that franchising is a business enjoying a good management system. And 53 per cent of those already in the franchise business are still committed to invest in franchising if they want to launch a new business," said Somjit.

The survey also found that 74 per cent of the respondents had only one franchised outlet, while 26 per cent had more than one store.

About 43 per cent of the respondents are conducting franchising along with other business, while 57 per cent are involved only in the franchise business.

The survey also showed that 33 per cent of the respondents had spent between Bt1 million and Bt3 million to start a franchise business, while 22 per cent had invested between Bt100,000 and Bt500,000, and 19 per cent less than Bt100,000.

About 27 per cent achieved break even in two years, 16 per cent in only one year, another 16 per cent in four years or longer, and 14 per cent in three years.