Overview of the Franchise System in Thailand (2024-2025)

Development of the Franchise Business System in Thailand

The evolution of Thailand’s franchise system over the past 30 years can be clearly analyzed, following trends observed in franchise development in other countries such as the United States, Europe, and Australia. These nations, now actively exporting their franchise systems internationally, have undergone similar phases of development, as follows:

1. The Initial Phase:
   The franchise system began with small businesses expanding through franchising, primarily using the Product Franchise model. These businesses gradually developed more complex systems over time.
2. The Strategic Growth Phase:
   In this stage, franchising became a critical business expansion strategy for medium and large companies. This era focused on creating balanced frameworks to align the interests of investors and business owners. Financial institutions started supporting franchise expansion, facilitating area development and strategic growth. Consumers became more familiar with franchise systems, and businesses gained clarity in sizing and market selection. Thailand entered this phase as its franchise industry matured.
3. The International Expansion Phase:
   The third phase marks the exportation of franchise systems across borders, with businesses establishing thousands of branches in multiple countries. Marketing systems, quality control, and franchise management became central to success. Rapid development in China exemplifies this phase, where mid-tier franchises expanded quickly by leveraging streamlined systems and efficient cost structures. This approach contrasted with Japan's slower and more rigid franchise model, which has seen a decline in global competitiveness.

Franchise Industry Trends in Thailand for 2025

Several interesting trends are shaping Thailand’s franchise industry in 2025:

1. Food and Beverage Sector:
   This remains a high-potential category, especially in fast-casual dining, which emphasizes quality and convenience. Healthy food options and cozy cafes also continue to attract consumers seeking unique dining experiences.
2. Service Businesses:
   • Home Improvement and Maintenance: Services like cleaning, home repairs, and gardening are gaining traction as homeowners seek convenience. These businesses require low initial investments and offer stable revenue opportunities.
   • Elderly Care Services: With an aging population, senior care at home and specialized care centers are emerging as critical needs in Thai society.
   • Health and Wellness: With growing attention to physical and mental health, businesses focused on fitness, yoga, healthy food, and holistic therapies such as acupuncture are gaining popularity. Coaching services for health and well-being are also becoming significant.
   • Modern Lifestyle Services: As life becomes busier, services that integrate into daily routines are essential, emphasizing reliability and effective management systems.
3. Technology and Digital Solutions:
   • IT Support and E-commerce Solutions: Though still a niche market, these areas are promising as they enhance small business operations and cater to digital-age consumers.
   • Smart Home Systems: With the continued popularity of remote work, businesses that install and maintain smart home systems are expanding, provided they establish well-designed franchise models.
4. Regional Franchise Opportunities:
   Provincial areas offer untapped potential, particularly with the rise of community malls and residential zones. As purchasing power in these regions grows, young entrepreneurs view franchising as a viable way to increase income. Franchises with simple management systems tailored to local markets can create sustainable opportunities.

Challenges in the Franchise Industry

Despite its potential, franchising in Thailand faces significant challenges, such as:

• Lack of experience among franchisors.
• Intense competition.
• The need to adapt to new technologies.
• Building strong, competitive brands.

Opportunities for Franchise Investment

Given these trends, franchise investment remains an attractive opportunity for those willing to adapt and learn. Whether launching their own franchise or purchasing rights to a credible brand, entrepreneurs who meet market demands and manage effectively will help drive Thailand’s franchise industry to play a crucial role in the country’s sustainable economic growth.

Analysis of Franchise Businesses in Thailand by Business Categories
By Dr. Peerapong Kitiveshpokawat

Franchise businesses in Thailand are diverse and have high growth potential, divided into four main groups: Food & Beverage, Services, Retail, and Others.

It is expected that the number of franchise businesses in Thailand will range from 600 to 650 by 2025. However, the expansion will be limited to 5-10% only, with issues such as the closure of existing businesses, known as the Failure Rate, or the closure rate of franchisors themselves. The number of existing businesses is predicted to decline by at least 10%, as has been observed in past years. This results in a near balance between business expansion and closures, causing the overall number to remain relatively static.

1. Food & Beverage
This group is expected to grow by more than 10%, with no fewer than 250–300 businesses. This category is the most popular due to its alignment with Thai consumer behavior, which places great importance on food. Growth is evident in both urban and rural markets.

Factors contributing to growth include changing consumer behavior, such as increased demand for healthy foods, the expansion of cafes and fast-casual dining restaurants catering to younger generations, the rise of delivery services and online ordering, and the opening of branches in rural areas and urban communities. Challenges include high competition and the need to create unique selling points. Franchise systems in major provinces will likely strengthen significantly in the coming year. In Bangkok, however, central investors face various factors that have delayed franchise investments.

2. Services
It is expected that this category will see no fewer than 150 businesses developed, mostly in large cities, particularly Bangkok, due to the favorable behavior of target market groups. This category includes specialized services such as laundry, healthcare, and education. Growth is seen in printing services, gardening, specialized services, and home repair businesses, such as electrical and plumbing systems. Lawn care and garden maintenance services also cater to consumers’ demand for convenience.

Factors contributing to growth include increased demand for health and elder care services and skill development for children and youth. Moreover, services related to the digital lifestyle, such as IT support and smart home services, are also gaining traction.

3.  Retail
Opportunities for developing businesses in this sector may be fewer, but they will have more branches than other sectors. It is estimated that this group will include no fewer than 60–80 businesses. Retail franchises in Thailand focus on selling daily necessities and operating convenience stores, expanding into communities and secondary cities. Growth is driven by the convenience of accessing products, the expansion of community malls and residential areas, and meeting the demand for products in rural and community markets. Adjustments needed in this sector include dealing with high rental costs and competition from online stores.

4.  Other Categories
This group has shown noticeable development in the past 2–3 years, with an estimated 80–100 businesses. It includes niche businesses not covered by the other groups, such as hotel management, apartment management, corporate accounting, human resource management, property management, car rental management, real estate businesses, and sales and brokerage services. Changes in consumer spending habits, such as investments in homes and private spaces, have increased demand for specialized services. Businesses in this category must focus on educating underdeveloped markets about these services and building brand trust while expanding their market simultaneously.

This year, the analysis does not break down businesses into smaller categories, unlike previous years when there were 10–12 groups. Instead, businesses are classified into broader groups based on major business systems. Further subdivision is deemed unnecessary and confusing in today’s franchise system, which has expanded significantly. If such divisions were made, there could be more than 50 subcategories, exceeding what is necessary. The overall trend suggests that the number of franchise businesses in Thailand could potentially exceed 800 in the near future. These changes highlight the clear growth potential of franchise businesses in Thailand across all groups. If investors can identify the strengths of each group and effectively meet market demands, franchising will remain an attractive investment option, particularly in groups focusing on innovation, health, and specialized services, which continue to be key market trends.