Wednesday, April 01, 2020

SMEs invited to become franchisees of Inthanin Coffee

Apr 26. 2017
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By The Nation

Kasikornbank and Bangchak Retail are offering loans to small and medium-sized enterprises that want to open an Inthanin Coffee Shop. 

By the end of this year, at least Bt80 million in new loans will be extended under this service. Numerous coffee brands are contributing to the currently intensified retail coffee market competition, valued at Bt17 billion.

Pipavat Bhadranavik, KBank first senior vice president, said the bank and Bangchak Retail were promoting secure business ownership among Thai operators with a loan to finance the opening of Inthanin Coffee Shops, equivalent to 70 per cent of the total investment. 

Provided by KBank, the loan has a five-year term, with a Bt5-million loan guarantee by the Thai Credit Guarantee Corporation. No business experience, collateral, or bank statements are required for loan application. By year-end, the bank expects to see Bt80 million in new loans extended under this service.

Thailand has seen more than 110 coffee brands introduced, driven by the increasing number of Thai coffee drinkers, thereby resulting in intense competition. To be a successful coffee-shop franchisee, one is recommended to choose a franchise brand that is already established in the market, with an existing reputation, customer base, creditable quality, standard prices, and professional business administration that responds well to customer lifestyles. 

Inthanin is among the top retail coffee franchises in terms of popularity, growing its network largely alongside petrol-station businesses. Apart from Bangchak service stations, the coffee brand has expanded its presence in new channels, including office buildings, department stores and educational institutes.

Viboon Wongsakul, Bangchak Retail managing director, said Thailand’s retail coffee industry was worth about Bt17 billion, of which 75 per cent, or Bt12.75 billion, is contributed by franchise businesses. This proportion is on the rise.

Two business platforms are available for Inthanin franchisees: Inthanin Garden, with a simple but elegant, easy-to-access style, offering 100-per-cent-organic Arabica coffee; and Inthanin Coffee, with a simple, modern look, yet stylish and friendly, offering a bolder coffee taste. Total investment for each of these outlets is around Bt2 million to Bt3 million, depending largely on shop area.

Bangchak Retail is planning to open 120 new Inthanin outlets by the end of this year, in addition to the 400 existing branches, and hopes to have at least 1,000 within five years. 

Inthanin shops will be remodelled with a more modern look and eco-friendly designs and materials, including its “Bio Cup”, which is made from plants and is biodegradable. 

Apart from the coffee franchise, the company, in cooperation with KBank, will soon offer a loan for SPAR franchises, a Netherlands-based retail chain that has already granted an exclusive licence to Bangchak Retail.

Pipavat saod that over the past year, the retail franchise business totalled Bt250 billion in market value, or 8 per cent of the country’s retail industry. 

The franchise success story mostly involves famous brands, which are well recognised by customers and offer financial and equipment support, training service, and a practical business platform. 

KBank has set a loan target for franchise businesses at Bt2.22 billion this year, an increase of 15 per cent from 2016.

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