You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

December 24, 2019

Thailand Issues Restrictions on Unfair Trade Practices in Franchise Businesses

Subscribe to Updates

On December 6, 2019, the Notification Regarding the Guidelines for the Consideration of Unfair Trade Practices in Franchise Businesses was issued to prevent franchisors from adopting overly restrictive and unfair contractual conditions that are deemed to potentially cause damage to franchisees. The notification will become effective on February 4, 2020.

This notification emphasizes and compiles in one place a number of requirements that mirror provisions already set out in other laws and regulations, such as the Unfair Contract Terms Act, Ministerial Regulation 25 under the Patent Act, and the Civil and Commercial Code. It was issued by the Office of the Trade Competition Commission, which is empowered under the Trade Competition Act B.E. 2560 (2017) to regulate unfair trade practices in certain selected businesses. The longstanding draft Franchising Business Act—if passed into law—may have further implications on the interpretation of this notification as there are similar restrictions set out in the draft law.

The notification imposes two main obligations on the franchisor:

  • Obligation to disclose important information relating to the franchise. Prior to entering into a franchise agreement, the franchisor must disclose important relevant information to the franchisee, such as details on (1) the royalty fee and other mandatory payments relating to the operation of the franchise business, (2) the franchise business model, (3) the intellectual property rights, and (4) the renewal and termination of the franchise agreement.
  • Obligation to notify and offer the right of first refusal to the nearest franchisee. If the franchisor intends to open and manage a new branch in the vicinity of the franchisee’s area of operations, the franchisor is required to first offer the franchisee in that area the right to operate the branch.

The notification also prohibits the franchisor from engaging in the following trade practices that may cause damage to the franchisee:

  • Setting restrictive conditions for the franchisee without justifiable reasons, such as forcing the franchisee to exclusively buy products or services that are irrelevant to the operation of the franchise business from a designated business operator.
  • Setting additional conditions for the franchisee to comply with, after the franchise agreement has already been executed. Exceptions may apply if there is a justifiable reason and any additional conditions are made in writing.
  • Restricting the franchisee, without justifiable reasons, from purchasing products from other business operators that offer products with comparable quality but at a lower price.
  • Restricting the franchisee, without justifiable reasons, from offering discounts on perishable goods or products close to their expiration.
  • Setting discriminatory conditions among franchisees, without justifiable reasons. Setting any inappropriate conditions for purposes other than to maintain the reputation, quality, and standards of the franchisor in accordance with the franchise agreement.

For more information on this topic, or on any other aspect of trade competition in Thailand, please contact Tilleke & Gibbins at [email protected] or +66 2056 5555.

Related Professionals

Practices

Antitrust and Competition

Corporate/M&A

Customs and International Trade

Location

RELATED INSIGHTS​ 

August 27, 2025
Myanmar’s Directorate of Investment and Company Administration (DICA) has issued an announcement reinforcing compliance obligations under the Myanmar Companies Law (MCL). This follows recent updates to reporting requirements and signals increased regulatory scrutiny regarding registered office addresses and directors’ residential information submitted online via MyCO, Myanmar’s company registration system. Key Compliance Areas Under the MCL, every company must maintain a registered office for official communication and legal correspondence. Any change to this address must be reported to the DICA registrar. In April 2023, DICA introduced additional reporting obligations for newly incorporated companies. The additional rules require companies to submit their Annual Return accompanied by verification documents within two months of incorporation. These documents include a recommendation letter from the relevant township police station or ward administrator confirming the operational status and physical location of the registered office. Directors’ residential addresses must also be verified through similar documentation, and foreign directors are required to submit the arrival notification form issued by the Immigration Department. For companies operating through a virtual office, clarification from a DICA official indicates that the virtual office address must correspond with the registered address submitted via MyCO. A recommendation letter confirming the validity and operational status of the virtual office must be submitted. Legal Consequences The recent announcement signals that DICA will begin enforcing these requirements in earnest. Failure to comply with the additional reporting obligations may result in inspections and enforcement actions by the DICA registrar, or complaints from third parties. It may also lead to penalties or other legal consequences as prescribed under the MCL. Recommended Actions It is strongly advised that all newly incorporated companies and their directors: Review their MyCO submissions for accuracy. Secure the required supporting documents within the Annual Return deadline. Ensure that all address information reflects the company’s actual
Read More
August 21, 2025
On August 19, 2025, the Trade Competition Commission of Thailand (TCCT) released its draft Guidelines on the Consideration of Unfair Trade Practices and Conduct Constituting Monopoly, Reducing Competition, or Restricting Competition in Multi-Sided Platform Businesses in the Category of Digital Platforms for the Sale of Goods or Services (E-commerce). A public comment period on the guidelines is open until September 18. The draft provides the first detailed framework for how the TCCT will interpret and enforce the substantive provisions under the Trade Competition Act against digital platforms, which have a unique network effect and require complex competition analysis. This development will profoundly impact the operations of e-commerce platforms, sellers, and associated service providers in Thailand. The guidelines primarily target e-commerce digital platform business operators, which are defined as follows: E-commerce digital platform: A medium facilitating the sale, purchase, or exchange of goods or services, including any operations to create transactions or interactions between business operators via an electronic transaction system, regardless of whether service fees are charged. E-commerce digital platform business operator: A service provider of a digital platform for the sale of goods or services who acts as an intermediary facilitating the sale of goods or services, including any operations to create transactions or interactions through an electronic transaction system by receiving orders for goods or services transacted via an electronic system, whether in the form of an e-marketplace, a social marketplace, or any other form that connects purchase orders for goods or services with business operators through an electronic system. Prohibited Conduct The guidelines classify potentially anticompetitive conduct and unfair trade practices into two categories: price-related and non-price-related conduct. 1. Price-related conduct The TCCT is targeting pricing strategies that can harm competition. Key prohibited behaviors include: Price below cost: Setting prices below the average total cost without
Read More
August 19, 2025
On August 6, 2025, Myanmar’s National Defence and Security Council (NDSC) issued Order No. 20/2025, announcing a change in the composition of the country’s Foreign Exchange Supervisory Committee (FESC). The prime minister has been appointed committee chair of the FESC, and five other individuals were appointed to the committee. The order took immediate effect. Originally established in April 2022, the FESC is responsible for approving foreign currency conversion, granting exemptions to foreign exchange restrictions, and permitting overseas transfers of foreign currency. The FESC supervises the flow of foreign currencies for domestic and foreign investment, manufacturing, exports and imports, and service businesses (including education- and health-related initiatives). The FESC is specifically responsible for considering and approving the use of foreign currency for the following: Importing machinery, vehicles, equipment, and raw materials essential for foreign investment and manufacturing projects; Importing fuel, medicine, cooking oil, fertilizer, insecticide, and construction materials not readily available on the domestic market; Covering Myanmar citizens’ needs abroad, such as medical treatment, education, or religious activities; Facilitating imports of general goods, loan repayments, interest payments to foreign lenders, service payments, and profit repatriation from investments; and Importing luxury products, including brand-name goods, jewelry, sports cars, and watches. The FESC is empowered to carry out further duties related to foreign exchange management as assigned by the NDSC Importers, exporters, investors, and business owners are encouraged to consult the most current FESC guidelines and approval lists before conducting transactions in Myanmar. For more details on these FESC composition developments, or on any aspect of financial regulations in Myanmar, please contact Tilleke & Gibbins at [email protected].
Read More
August 1, 2025
Tilleke & Gibbins has contributed the Vietnam chapter to Corporate Governance 2025, part of the International Comparative Legal Guides (ICLG) series published by Global Legal Group. This respected guide offers comprehensive, jurisdiction-specific overviews of corporate governance laws and practices around the world. Each jurisdictional chapter follows a clear Q&A format, providing practical insights into critical issues such as: Sources of corporate governance regulation Shareholders’ rights, powers, and responsibilities Structure and duties of management bodies Stakeholder involvement in governance Transparency and reporting requirements ESG and sustainability-related obligations Cybersecurity and technology-related disclosures The Vietnam chapter was authored by Tram Ngoc Bich Nguyen, Truc Thi Thanh Tran, Dung Thi Phuong Le, and Quang Minh Vu, members of Tilleke & Gibbins’ corporate and commercial team in Ho Chi Minh City. The authors provide detailed analysis of Vietnam’s corporate governance framework, including recent developments such as the 2025 amendments to the Law on Enterprises requiring disclosure of ultimate beneficial ownership and the increasing emphasis on sustainable business practices and responsible corporate conduct. The chapter also discusses practical considerations for foreign investors in Vietnam, such as overlapping signing authorities between key company officers, enforcement of shareholders’ agreements, and disclosure obligations related to ownership and management roles. The complete Vietnam chapter is available as a PDF below. The Vietnam chapter—and the full Corporate Governance 2025 guide—are also freely available on the ICLG website.
Read More