April 29, 2011

Planning a Successful Franchise Agreement

Informed Counsel

The franchise business model is widespread in Thailand in many fields, such as clothing retailers (Zara and The Gap), fast food outlets (McDonald’s and KFC), and convenience stores (7-Eleven and Family Mart). This level of popularity can be attributed to the fact that franchising allows the franchisor to promote a successful business model or product in other geographical areas, while many of the risks are borne by the franchisee. At the same time, franchising is attractive to franchisees because it authorizes the franchisee to use this successful business model or product while in many cases deriving greater benefits from the business than a company-owned outlet. In structuring a successful franchise agreement, it is important to implement certain steps prior to the agreement, during the life of the agreement, and at the agreement’s termination.

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