Franchise Business in Thailand: Your Guide to Starting a Franchise

Last updated on July 24, 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.

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 2019 Franchise Guidelines. This is the closest thing Thailand has to franchise regulation. Under section 57 of the Act, the Trade Competition Commission issued Guidelines on unfair trade practices in franchising, published in the Royal Gazette on 6 December 2019 and effective 4 February 2020.
• 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 2019 Franchise Guidelines Require

The Guidelines apply to franchisors operating in Thailand, which includes the Thai master franchisee of a foreign brand. They do two main things.

Pre-contract disclosure. A franchisor must disclose material business information to a prospective franchisee before the agreement is signed, so the franchisee can make an informed decision. The Guidelines do not prescribe a fixed format or a set waiting period, but the disclosure obligation itself is real and skipping it is a risk.

A ban on specific unfair practices. A franchisor may not impose unjustified restrictive conditions, unjustified product-tying or purchasing restrictions, or discriminatory conditions between franchisees, among other listed practices. A franchisor that breaches the Guidelines can face action under the Trade Competition Act.

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 pre-contract disclosure the 2019 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.