Franchise system the main path for operators

Franchise system the main path for operators

Ms Chataya (left) says Food Passion is introducing a new chain restaurant, Moo Tod Gord Kor.
Ms Chataya (left) says Food Passion is introducing a new chain restaurant, Moo Tod Gord Kor.

Major food operators are tapping the franchise system and opening street food stalls outside retail malls to prepare themselves for booming online delivery and to reduce the impact from the prolonged Covid-19 pandemic.

Khiang street food brand under Zen Corporation, the operator of Zen Japanese restaurant, for the first time launched the Khiang brand via the franchise system in December 2019, with 70 branches.

Now, Central Restaurants Group (CRG), Food Passion and Chester's are jumping on the bandwagon of franchising in Thailand's street food market.

Chataya Supanpong, chief engagement officer of Food Passion, the operator of Bar B Q Plaza, Jum Zap Hut, Charna, Space Q and Red Sun, said the company introduced Moo Tod Gord Kor, a new fried pork chain, to the market. Moo Tod Gord Kor will sell via the franchise channel for the first time.

The franchise has three models priced at 11,900 baht, 32,000 baht and 59,900 baht. The franchise is estimated to generate 60,000 baht in monthly revenue. The price of fried pork starts at 25 baht.

Food Passion has partnered with PTG Energy, Ek-Chai Distribution System (the operator of Tesco Lotus Express), Kasikornbank, Krungsri Consumer and Krungthai Card.

Under the partnership scheme, PTG Energy will procure and provide high-traffic spaces near crowded areas at PT petrol stations, while Ek-Chai Distribution System will provide spaces at popular branches of Tesco Lotus Express with a lower rental rate than the regular rate until mid-2021.

Kasikornbank, Krungsri Consumer and Krungthai Card will provide financial support to Food Passion.

Ms Chataya said the company aims to open 100 food stalls by the end of 2020.

"Moo Tod Gord Kor was created in response to the pandemic ravaging businesses, communities, the economy and everyone's lives," she said, adding that the franchise model is driven by diversification strategies and business synergy to support business development and growth.

Mr Nath (right) will be promoting franchise deals for Aroi Dee on Oct 14 at Bitec.

Nath Vongphanich, president of CRG, one of the country's leading quick-service restaurant chains, said the company will start selling franchises of the Aroi Dee street food brand to the public this month.

"With growing delivery and street food, the franchise is a proper business model to expand our reach to a wider customer group," Mr Nath said.

CRG expects to have 300 Aroi Dee stores within the next five years, 225 branches of which will be operated under franchising and the remaining 75 stores as owned restaurants.

People can apply for a franchise at the franchise fair on Oct 14 at Bitec. Each franchise deal requires 2 million-3 million baht for working capital.

Chester's Food, the operator of the Chester's fast-food brand under SET-listed Charoen Pokphand Foods, is reportedly ready to enter the fray in the franchise business, with plans to launch a franchise of the Talew street food brand in the second quarter of next year.

Kasikorn Research Center estimates that the Thai food market is worth up to 389 billion baht this year, down more than 10% from 2019.

Of the total, 100 billion baht is from chain restaurants and 289 billion baht is from street food.

The food business's drop stems largely from the changing behaviour of consumers who are ordering more food for delivery, the impact of the viral outbreak on tourism, and relatively low local purchasing power.

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