Bulk of franchise firms still unprepared for single market

Speaking at yesterday's "How franchise enterprises should do under the AEC" seminar organised by the Business Development Department, association president Saward Mitaree said operators should urgently develop their competitiveness ahead of the implementation of the Asean Economic Community (AEC) in 2015.

The key elements are the development of language skills, in particular English and other languages used in Asean, financial and marketing management, and human-resources development.

Moreover, before exploring overseas markets, franchise operators should register their trademarks and licences in order to prevent the violation of intellectual property rights, Saward said.

The Kingdom has about 400 franchise operators, but only 20 per cent of them are strong enough to compete under the AEC, he said.

According to the association, the value of Thai franchise business was worth Bt70 billion last year. This is expected to reach Bt100 billion this year.

Saward added that the areas in which Thai enterprises may face particularly tough competition are those that rely on high technology and which involve small and medium-sized enterprises.

However, franchise sectors that have high potential for development and competing successfully amidst regional integration are foods, restaurants, car care, education and spas.

Vallop Vonjitvuttikrai, first senior vice president of Kasikornbank, said franchise enterprises should not only consider the AEC as a threat, but also as an opportunity to expand.

He said enterprises have a high capacity to start businesses in Cambodia, Laos, Burma and Vietnam, since those countries are familiar with Thai culture and have similar tastes.

However, relatively few franchise entrepreneurs have a high capacity to expand their businesses overseas, he added, suggesting that they should create their own brands and develop products and services that are difficult to imitate, in order to ensure growth in the seamless market.