The Commerce Ministry, in collaboration with the Small and Medium Enterprise Development Bank of Thailand (SME D Bank), plans to offer loans worth over 239 million baht at a fixed rate of 3% to prospective franchise businesses.
Commerce Minister Suphajee Suthumpun said the collaboration aims to support prospective franchises in expanding their operations.
The pilot project includes seven participating brands: Manoi bubble milk tea; Bear Wash; Punjaros Boat Noodles; Laundrybar; Trendy Wash; 24 Wash; and Punthai Coffee.
The department estimated that this initiative will generate over 1.14 billion baht in economic circulation.
Moreover, the bank is offering a special loan programme with a fixed interest rate of 3% a year for up to three years to franchises of all sizes, with a total credit line exceeding 20 billion baht.
Mrs Suphajee said this initiative also focuses on minimising barriers for new entrepreneurs by facilitating easier access to funding, allowing inexperienced business operators to apply for loans.
The ministry and the bank will carefully screen potential entrepreneurs to ensure they are capable and possess growth potential.
She said the franchise business continues to thrive with a projected growth rate of about 10-15% this year.
She said Thai franchises have expanded their businesses to international markets, with over 40 franchises now operating in more than 30 countries.
Amorn Umpairungruang, chief executive Dou Means Bean Co Ltd, owner of the Dou Soy Milk franchise, said a rising number of layoffs had prompted many individuals to start their own businesses.
This trend would likely boost the franchise sector, particularly in segments requiring small investments of around 500,000-600,000 baht.
He said last year the franchise sector saw a surge of Chinese franchises such as snowball and bubble tea as well as ice cream brands, which achieve success due to their efficient systems.
However, this year Thai franchises are beginning to improve, supported by better logistics and supply chain systems for distributing products and raw materials, said Mr Amorn.
He said the Thai franchise sector, established for over three decades, has seen many businesses enter and exit the market, as the sector often aligns with trends.
Younger generations increasingly aspire to become entrepreneurs now, said Mr Amorn.
He suggested educational institutions should include the franchise business in their curriculum and urged the government to support the sector through low-interest financing and the establishment of franchise-related laws to provide proper oversight and development for the industry.