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Thailand: Franchising to sink by 10-20%
Thailand’s franchise industry is likely to contract by as much as 20% this year as the government’s tight restrictions to contain Covid-19 infections have dampened business activities for the sector.
Boonprasert Pupan, president of the Franchise & License Association, said the franchise market is expected to shrink by 10-20% to 270-280 billion baht this year.
Thailand has 597 franchises and more than 12,000 domestic franchisees, mainly in the food and restaurant sector, but also in areas such as services, education, fitness, lifestyle and retailing.
Thailand’s franchise market was valued at 300 billion baht last year, a rise of 20% from 250 billion baht in 2019.
“The restaurant and beverage franchises which represent about 50-60% of the total franchise business in the country are the most affected segment,” Mr Boonprasert said. “They are followed by education, especially tutorial schools which account for 30% of the total, and others such as car care shops,” he added.
However, Mr Boonprasert expects franchise businesses to become more active after the government relaxed its tougher lockdown measures in early September and the number of new infections has dropped.
“Consumers are feeling better and dare to go outside as we can notice from an increased number of people who go to shopping malls,” he said.
In a related development, Commerce Minister Jurin Laksanawisit yesterday presided over a ceremony to kick off a franchise roadshow scheme in 15 provinces across all regions as part of the ministry’s efforts to encourage people to sign up for franchises to generate their income during the pandemic.
The roadshow has a special discount on franchise fees and soft loan matching and will run until December this year.
The Commerce Ministry expects the roadshow and related activities to help create careers for no less than 10,000 people. The scheme will also help generate income and reduce the unemployment rate as a whole, and among SMEs and micro SMEs.
The ministry in partnership with the Franchise & License Association is also scheduled to organise the franchise exhibition at Impact Muang Thong Thani exhibition centre in December.
Source: https://www.bangkokpost.com/business/2196171/franchising-to-sink-by-10-20-