American franchises eyeing expansion into Thailand and Asean
This September will see the RetailEX FranchisEX Asean 2015 expo take place at Impact Muang Thong Thani in Bangkok, where a large number of franchise retailers from the United States as well as Myanmar, Malaysia and Vietnam will showcase their products to potential investors.
The franchise market in Thailand has been growing at around 15 percent annually according to the locally-based franchise consulting company Gnosis Co. In 2013 the franchise market was valued at 185 billion baht across 477 brands. The top three categories were food (20.9 percent), beverages and ice cream (20.7 percent) and education (16.7 percent) according to the Business Development Department.
According to Gnosis Co., more than 20 American food chains are looking to expand into Thailand and use it as a base to expand into the rest of the Asean region.
Among the most prominent of the American franchise firms are Arby’s sandwich chain, which has 3,400 branches worldwide; Denny’s family restaurants with 2,100 outlets across the world; Fuddruckers, an American hamburger chain; PJ’s Coffee and the Round Table pizza brand.
Other chains include the Rocky Mountain Chocolate Factory, Mosquito Squad, and Wow Café.
As well as the Americans, there is interest from franchise operators based in Dubai, Malaysia and Singapore about expanding into Thailand. One of the more prominent of these is Shakespeare and Co., a Victorian café from the United Arab Emirates.
Asean is viewed as an emerging market for the franchise industry since it has a growing middle class with discretionary income. Asean people tend to like going to shopping malls and these places tend to have a number of franchise food and beverage outlets established to take advantage of those customers who are spending plenty of time within the malls.
Gnosis Co., is the franchise broker for the Arby’s chain, which also has plans to set up in the Philippines and Vietnam as well as Thailand.
Apart from the franchise market, the US-Asean Business Council recently announced that a number of major American firms are still to invest in Thailand. Among those US companies interested in getting involved locally are Chevron, Dow Chemical, Guardian, Seagate Technology and UPS.
The biggest drawbacks to these firms investing in Thailand centre on issues about limits on sales of some products due to environmental reasons and some complicated processes for obtaining industrial permits.
The Americans are keen on pushing Thailand towards signing up to the Trans-Pacific Partnership trade pact, although there are still a number of issues which need to be settled before such a wide-ranging agreement can be implemented.
