In modern times, the franchise business in Thailand is very popular and has a massive distribution. The largest number of franchise businesses operate in the food, retail, and service sectors. The territory of Thailand, with the developed infrastructure of year-round international tourism, numerous resort areas, cheap and well-educated labor force is a good ‘soil’ for the rapid development of the franchise business and the opening of franchise outlets. More than 10,000 franchisee entrepreneurs work in Thailand, using trademarks of leading, sought-after, well-known, and popular trade brands, and more than 400 international franchisor companies operate under their own registered trade logo. The franchise biz in Thailand is not regulated by special strict laws. At the state level, franchising is protected and supported by general legislative law under the Civil and Commercial Code, and the conclusion of a franchise agreement is a mandatory requirement under the law, which enshrines the rights and obligations of the signers of the contract.
Under the franchise agreement, the franchisor company transfers to the franchisee entrepreneur the commercial business principle, skill, qualification, experience, and trademark, and the franchisee businessman undertakes to comply with all the requirements of the franchisor agency. The operation of tax legislation regarding a franchise in Thailand has specific features for the payment of royalties. The royalty amount of 15% intended for foreign franchisor enterprises not conducting their trading and production activities in such place is paid to local, territorial firms in the form of income tax. In addition to the number of royalties, franchisee entrepreneurs pay 15% income tax to the state budget.