Bangkok Post : From Mexico to India VIA Thailand

No matter how bad life may be, everyone has to eat, and good food really does cross all boundaries in today's global village we now seem to be living in. In that spirit, an American entrepreneur who started a taco restaurant chain in Bangkok is now selling franchises to two parties in India.

Greg Lange, managing director of Sunbelt Asia Company which operates Sunrise Tacos outlets at Sukhumvit Soi 12, Emporium and Siam Paragon plus some Subway sandwich outlets, said he started accepting overseas franchise applications before local ones and this led to the two Indian groups jumping into the business.

"I have been negotiating with two groups in India and they are now looking for sites, one in Mumbai and the other group is in Kolkata," he said.

"When I made the business plan a few years ago I never in a hundred years thought there would be so much demand from the Indian market, but a number of ingredients are very similar [to Indian cuisine].

"If you went to Emporium you would have noticed that there are a lot of Indians eating there. There are actually more Indians eating at Sunrise Tacos than at Indian restaurants."

Although Mr Lange started accepting local franchise applications recently, there was a very limited response from about 300 interested parties who had been on the waiting list for about two years.

"I think people are taking a wait-and-see attitude as far as what is happening in Thailand, but as far as I am concerned, I don't see any slackening in demand, I see a bigger demand."

The investment for a local franchised outlet is three million baht, covering the total build-out cost and franchise fee.

"We are very interested in franchising, not so much in Bangkok but more so in Phuket and Pattaya because I as a businessman can't be there - I can't jump on a plane or I can't drive two and half hours to Pattaya every day."

The price tag is higher in India, equivalent to four million baht an outlet. Mr Lange does not follow a master franchise system but is using a development area strategy. As a result, each Indian group has to commit to opening 10 locations and put up an additional 200,000 baht per location.

One of the two Indian groups also intends to open take-out kiosks, for which the franchise fee is lower.

"A lot of people think India is wide open," said Mr Lange. "Taco Bell went there last month and that is a big American restaurant chain.

"So we have been in talks with these two groups for the last six months and we have now reached the conclusion and are just looking for locations and it is very difficult to find the right location in India because the rents are so high."

It is possible that Sunrise Tacos will also move to Singapore because Mr Lange is holding talks with a Singaporean party, but nothing has been finalised yet.

Although the long-term outlook for the venture is good, recent events in Bangkok have hurt Mr Lange's businesses. Traffic fell at the Soi 12 and Emporium outlets, but he is confident it will bounce back soon.

He is also sticking to his plan to open an outlet at the fire-ravaged CentralWorld, but would have to wait for the complex to be rebuilt. Another outlet is to be opened at Terminal 21 building at the Sukhumvit-Asok intersection in June 2011, but possibly sooner.

"We are going to be on the fourth floor. There are going to be a lot of other restaurants, It is going to be called the San Francisco level, and it's basically going to be a mall and at the back there is going to be service."

Aside from this Mr Lange has also bought another franchise for the famous Chiang Mai restaurant, The Dukes.

"I am the first franchiser of this company. How it came about is that David, who is the co-owner of The Dukes in Chiang Mai, has two locations and they do a lot of dinners - anything from 250-300 a night in Chiang Mai and it is considered a local institution.

"Whenever I was in Chiang Mai I saw how good the food was and felt there was demand for this type of niche. There are a lot of Italian restaurants doing pizza but nobody is doing an American pizza - it's a different style, a different taste."

The Dukes Bangkok branch opened at Emporium's restaurant hall on the fifth floor in December and while sales were up 50% versus the previous month in April, this month they are off 30% because of unsettled conditions in the capital.

While there does not seem to be a lot of enthusiasm for entering the restaurant business in Thailand right now, Sunbelt Asia knows there is strong interest in the export sector because one arm of its business is involved in setting up companies, and it is seeing record levels of companies being established for this purpose.

"Exporting seems to be the hot, trendy thing right now in Thailand. If you look at the growth in exporting last month, 40% higher numbers than the year before, this is where the record growth is happening in Thailand.

"A lot of people say, how could the stock market be going up, how could the baht be getting stronger with all this political crisis, don't they know what's going on? It's simply because Thailand has high currency reserves and we are getting a lot of business overseas.

"Even now, with this political climate, people are setting up companies but they are not setting up companies in tourism, they are not setting up companies to open hotels and restaurants, they are opening companies to export - it's a different sector."