Franchise Lawyers in Thailand. Franchising in Thailand is a popular business expansion model, particularly for international brands seeking market entry and local entrepreneurs looking for proven business models. However, franchising involves complex legal agreements, intellectual property protections, regulatory compliance, and dispute resolution—all of which require specialized legal expertise.
Franchise lawyers in Thailand play a critical role in assisting franchisors (brand owners) and franchisees (business operators) with contract negotiations, licensing, compliance with Thai law, and handling legal disputes. Given the absence of specific franchise laws in Thailand, franchise transactions are governed by multiple laws, including the Civil and Commercial Code, Trademark Act, Trade Competition Act, and Foreign Business Act.
This article provides an in-depth look at the role of franchise lawyers in Thailand, including their responsibilities, key legal considerations, and the importance of legal due diligence in franchising.
1. The Legal Landscape of Franchising in Thailand
Unlike countries such as the United States or Australia, Thailand does not have a dedicated Franchise Law. Instead, franchise agreements fall under various general business laws, such as:
✔ Civil and Commercial Code – Governs contract law, agency relationships, and obligations between parties.
✔ Trademark Act B.E. 2534 (1991) – Protects brand names, logos, and intellectual property in franchise agreements.
✔ Trade Competition Act B.E. 2560 (2017) – Regulates anti-competitive behavior and ensures fair business practices.
✔ Foreign Business Act B.E. 2542 (1999) – Restricts foreign companies from directly operating certain types of franchises in Thailand.
✔ Consumer Protection Act B.E. 2522 (1979) – Ensures franchisees and customers are protected against unfair business practices.
Since franchising in Thailand lacks a specific regulatory framework, franchise agreements are highly contract-driven, making the role of a franchise lawyer crucial to drafting, negotiating, and enforcing contracts under Thai law.
2. Key Roles and Responsibilities of Franchise Lawyers in Thailand
Franchise lawyers provide legal services to both franchisors and franchisees, ensuring that franchise transactions are legally compliant and commercially viable. Their responsibilities include:
2.1 Drafting and Reviewing Franchise Agreements
A franchise lawyer ensures that the Franchise Agreement clearly defines:
✔ Franchise fees and royalties – Initial fees, ongoing royalties, and payment structures.
✔ Intellectual property (IP) usage – Rights to use trademarks, logos, branding, and operational systems.
✔ Operational obligations – Standards, training, and ongoing support from the franchisor.
✔ Territorial rights – Whether the franchise is exclusive or non-exclusive in Thailand.
✔ Duration and renewal conditions – Franchise term, renewal options, and exit clauses.
✔ Termination and dispute resolution – Grounds for contract termination and legal remedies.
2.2 Ensuring Compliance with Thai Business Laws
Since Thailand lacks specific franchise laws, franchise lawyers ensure compliance with:
✔ Foreign Business Act (FBA) – If a foreign franchisor wants to operate directly in Thailand, it may need a Foreign Business License.
✔ Trade Competition Law – Prevents unfair contract terms, price-fixing, and monopoly practices.
✔ Consumer Protection Law – Ensures that advertising, marketing, and business practices do not mislead consumers.
🔴 Key Legal Concern: Many international franchise agreements include foreign arbitration clauses, but Thai courts may not always enforce them unless properly drafted.
2.3 Intellectual Property (IP) Protection and Trademark Registration
Since franchise businesses rely heavily on brand recognition, protecting trademarks is essential. Franchise lawyers assist with:
✔ Registering trademarks in Thailand to prevent infringement.
✔ Drafting licensing agreements that define how franchisees can use the brand legally.
✔ Taking legal action against trademark violations and counterfeiting.
🔴 Key Issue: Some unscrupulous franchisees register a foreign brand’s trademark under their name to gain control over the brand in Thailand. Franchise lawyers prevent such legal risks by securing IP rights before signing agreements.
2.4 Structuring Franchise Business Models
Franchise lawyers help clients determine which franchise model best suits their business:
✔ Single-unit franchise – One franchisee operates a single location.
✔ Multi-unit franchise – The franchisee operates multiple locations.
✔ Master franchise – A foreign brand grants an exclusive license to a Thai company, which then sub-franchises to local operators.
🔴 Key Issue: The Master Franchise Model is common in Thailand because it allows foreign brands to operate legally without violating the Foreign Business Act. Franchise lawyers play a vital role in structuring these deals.
2.5 Franchise Dispute Resolution
Common franchise disputes include:
✔ Franchisor vs. Franchisee Conflicts – Breach of contract, unfair termination, or misrepresentation.
✔ Trademark Infringement – Unauthorized use of the brand by franchisees or competitors.
✔ Competition Disputes – A franchisor selling directly in a franchisee’s territory.
✔ Royalty Fee Disputes – Non-payment or disagreements over franchise fee calculations.
🔴 Legal Strategies:
✔ Negotiation & Mediation – Many franchise agreements require disputes to be resolved outside court.
✔ Arbitration – If the contract includes an arbitration clause, disputes may be settled through international or Thai arbitration centers.
✔ Litigation – If necessary, a franchise lawyer can represent clients in Thai courts for contract enforcement.
3. Challenges for Foreign Franchisors in Thailand
✔ Foreign Business Restrictions – Many service-based franchises (e.g., restaurants, education, consulting, and retail chains) require a Foreign Business License.
✔ Trademark Squatting – Some Thai individuals register foreign trademarks in Thailand before the actual franchisor enters the market.
✔ Cultural & Legal Differences – Contracts that work in Western countries may need modification to comply with Thai contract law.
✔ Lack of Franchise-Specific Laws – Since Thailand has no dedicated franchise law, agreements must be structured carefully under Thai civil law.
🔴 Solution: Foreign franchisors should engage experienced Thai franchise lawyers to handle legal setup, contracts, and compliance.
4. Selecting the Right Franchise Lawyer in Thailand
When choosing a franchise lawyer in Thailand, businesses should look for:
✔ Expertise in franchise law and commercial contracts.
✔ Experience handling international franchise agreements.
✔ Understanding of Thai trademark and intellectual property laws.
✔ Strong litigation and dispute resolution skills.
✔ Familiarity with the Foreign Business Act (FBA) and licensing requirements.
5. Conclusion
Franchise lawyers in Thailand play a crucial role in helping businesses navigate contract negotiations, compliance issues, intellectual property protections, and dispute resolution. Since franchising is governed by multiple Thai laws rather than a single franchise-specific regulation, legal guidance is essential for ensuring that franchise agreements are valid, enforceable, and aligned with Thai legal requirements.
For both foreign franchisors entering the Thai market and Thai entrepreneurs looking to invest in franchise businesses, engaging a qualified franchise lawyer is a critical step to ensuring a legally sound and profitable franchise operation in Thailand.