Franchise Business in Thailand: Your Guide to Starting a Franchise

Reviewed by ThaiLawOnline, a licensed Thai law firm practising in Thailand since 2006. Thai lawyer of record: Wichuda Atthamethakon, LL.M., Thai Bar Licence 3149/2556.

Last updated on 15 September 2026

The first thing to understand about franchising in Thailand is what does not exist: there is no dedicated franchise statute. Thailand does not have a Franchise Act, and franchising is not licensed or registered as its own category. Instead it is governed by a combination of general law and one set of franchise-specific regulatory guidelines. Knowing which rules actually apply is the difference between a franchise that holds up and one that does not.

A franchise still needs a Thai corporate vehicle, which is explained in our guide to setting up a business in Thailand.

The Law That Actually Applies

• The Civil and Commercial Code. A franchise agreement is a contract, and the Code’s general rules on contracts govern its formation, performance, and termination. There is no special franchise contract type, so the drafting has to do the work.
• The Trade Competition Act B.E. 2560 (2017) and the Franchise Guidelines made under it. This is the closest thing Thailand has to franchise regulation. Section 57 of the Act forbids a business operator to do anything that damages another business operator by unfairly obstructing its business, by unfairly using market power or superior bargaining power, by imposing trade conditions that unfairly restrict or obstruct it, or by any other act the Commission prescribes. Acting under section 17(3), the Trade Competition Commission issued Guidelines on unfair trade practices in franchising, signed 30 October 2019 and published in the Royal Gazette of 6 December 2019 (volume 136, special part 300 Ngor, page 29). Clause 1 brought them into force once sixty days from publication had elapsed, which is 5 February 2020.
• And they have been amended twice since. No. 2, Gazette of 22 September 2020 (volume 137, special part 220 Ngor, page 6), and No. 3, Gazette of 19 August 2021 (volume 138, special part 192 Ngor, page 47), each took effect the day after publication and each replaced the same provision, clause 4, on opening a competing branch near an existing franchisee. Anything written about “the 2019 guidelines” that stops in 2019 is describing a clause 4 that was superseded twice.
• Trademark and intellectual-property law. The brand is the asset being franchised. A franchisor operating in Thailand should have its trademark registered here; an unregistered mark is far harder to protect and to license cleanly.

What the Franchise Guidelines Require

The Guidelines apply to franchisors operating in Thailand, which includes the Thai master franchisee of a foreign brand: clause 2 defines a franchisor simply as the person who grants the right to run the franchise business. They do three things.

Pre-contract disclosure, and clause 3 says what has to be in it. A franchisor must disclose the details of its franchise business to the franchisee before the franchise agreement is entered into, under four headings: 3.1 the money, meaning the franchise fee, the royalty, marketing costs, training costs and the cost of equipment the business needs, how each is calculated, how it is paid and on what terms it is refundable; 3.2 the business plan, meaning management assistance, training, advice, promotion, and the number and location of franchisees in nearby areas now and in future; 3.3 the trademark, patent and copyright rights, for how long, on what scope of licence and subject to what limits; and 3.4 renewal, amendment, termination and revocation of the agreement.

No form is prescribed and no cooling-off period is imposed, so nobody will hand you a numbered disclosure document. That is precisely why the list matters: a franchisee can check it item by item against what was actually provided, and 3.2 is the one most often skipped, because it is the item that tells you how close the next outlet may be.

A right of first refusal over a new branch nearby, with a thirty-day window. This is clause 4, and it is the part of the instrument a franchisee is most likely to need. If the franchisor wants to open a new branch, whether it runs that branch itself or grants the right to another franchisee or to anyone else, it must tell the franchisee in the nearest area and offer that franchisee the new branch first. It must allow not less than 30 days for an answer. The one exception is a franchisee whose performance clearly fails criteria the franchisor set and notified in advance. What counts as the nearest area is judged on demand for the goods or services, the geography, and competitive conditions taken together. The thirty days and the exception were added by No. 2 in 2020; No. 3 in 2021 added one further carve-out, for area development franchises, where the contract itself already allocates expansion within an agreed territory and so makes the first offer impossible, and there the franchisor may give the new branch to another suitable franchisee provided it has a business, marketing or economic reason that stands up.

A ban on six specific unfair practices. Clause 5 lists them. A franchisor may not, without good reason, 5.1 restrict the franchisee’s rights, which expressly covers requiring it to buy unrelated goods or services only from the franchisor or its nominated supplier, and setting purchase quotas above what the outlet actually needs while refusing to take the excess back; 5.2 impose extra obligations after the contract has been signed, unless there is a sound business reason or it is needed to protect the reputation, quality and standards of the franchise, and in writing; 5.3 forbid the franchisee to buy equivalent-quality goods more cheaply elsewhere; 5.4 forbid it to discount perishable or near-expiry stock; 5.5 apply different conditions to different franchisees so as to discriminate; or 5.6 impose any other unsuitable condition whose purpose goes beyond preserving the franchisor’s reputation, quality and standards under the contract.

What a breach actually costs, which is not a small point. Breach of section 57 is not a criminal offence; it carries an administrative fine of up to ten per cent of the turnover of the year in which it was committed, or up to 1,000,000 baht if the business was in its first year (section 82). The Commission can separately order the conduct stopped or changed, and an operator who disagrees has 60 days from being notified to sue in the Administrative Court (section 60); ignoring such an order costs up to 6,000,000 baht plus up to 300,000 baht for every day it continues (section 83). A franchisor unsure whether its system crosses the line can ask the Commission for a binding advance ruling under section 59.

And the franchisee has a claim of its own, on a one-year fuse. Section 69 lets a person damaged by a breach of section 57 sue the operator for damages directly, and it lets the Consumer Protection Board or a recognised association or foundation sue on behalf of consumers or members. Section 70 extinguishes that right if the case is not brought within one year of the day the injured person knew or ought to have known of the cause. A franchisee who spends a year negotiating instead of filing can win the argument and lose the claim.

What a Thai Franchise Agreement Should Cover

Because so much rests on the contract, the agreement needs to be complete rather than borrowed from another country. In practice the terms that matter most are: the grant and its territory and exclusivity; the term and the renewal mechanism; the initial fee and ongoing royalties; the trademark licence and brand-standards obligations; training and support; sourcing and quality control; confidentiality and non-compete; and the exit, including what happens to the outlet, the stock, and the right to use the brand when the franchise ends. For a foreign franchisor, the agreement should be governed by Thai law for the Thai outlets and should sit alongside a properly registered trademark.

Foreign Ownership

A foreign company franchising in Thailand also has to deal with the ordinary foreign-business rules. Depending on how the franchise is structured, collecting royalties and providing services in Thailand can fall within the Foreign Business Act, which restricts majority foreign ownership of many service businesses. The common answers are a Thai-majority operating company, Board of Investment promotion, or, for Americans, the Treaty of Amity. This should be decided before the structure is built, not after.

How ThaiLawOnline Can Help

We draft and review franchise agreements for both franchisors and franchisees, prepare the clause 3 pre-contract disclosure the Guidelines call for, register the trademark that the whole franchise depends on, and structure the ownership so it fits the Foreign Business Act. See our legal fees.

A practical warning from experience: most franchise disputes we see come down to two things that were never nailed down at the start, what happens to the brand and the location when the relationship ends, and whether the trademark was actually registered in Thailand in the first place. Fix those two before you sign, and most of the risk goes away. Contact us to review your franchise.

Last reviewed: 15 September 2026. Read for this review, each from its Royal Gazette text: the Trade Competition Act B.E. 2560, section 57 for the four heads of unfair conduct, section 17(3) for the Commission’s power to issue guidelines, section 59 for the advance ruling, section 60 and section 83 for cease orders and the penalty for ignoring one, sections 69 and 70 for the private damages claim and its one-year limit, and section 82 for the administrative fine; and all three franchise announcements of the Trade Competition Commission, the original of 30 October 2019 (Gazette 6 December 2019) and the amendments No. 2 (Gazette 22 September 2020) and No. 3 (Gazette 19 August 2021), taken from the regulator’s own published copies and checked against its own list of announcements on the same day. Not verified in this review: the Foreign Business Act analysis in the foreign-ownership section, the trademark and intellectual-property points, the contract checklist, and the Board of Investment and Treaty of Amity routes, all of which are covered on their own pages. The commencement date of the original guidelines is computed from their own sixty-day clause: 4 February 2020 is the last day of that period and 5 February 2020 is the first day they bound anyone.