Key Motivations for the New Generation of Transactional Leadership in the Food and Beverage Franchise Business in Thailand

Introduction

Franchising is a fashionable and empathic method of controlling and expanding business operation. Franchise standard will be like a vaccine or business immunity in diversified circumstances as it is essential for franchisor to stay ahead of the curve by acquiring and grinding the skills importantly to navigate the changing dynamics of the market. A business faces unprecedented challenges and opportunities, agile leadership is crucial for driving competitive advantage and growth. A company start a franchise model by issuing licenses to independent franchisees, granting them the right to conduct business operations under the franchisor’s brand name (Chaudey & Fadairo, 2010). Franchising is a business model that involves a legal and commercial relationship between the owner of a trademark, brand, or business system (franchisor) and an individual or entity (franchisee) who is granted the right to operate under the franchisor's brand, following their established business model and using their support systems. In the economic circumstance, franchisors and franchisee can craft various advantages to their business. Thailand is the country’s favorable business environment and extremely strong consumer demand make it and appoint it a paragon destination for franchising prosperity. Franchising has been an endorsed direction for entry and expansion in the F&B sector, and an increasing number of Thailand brands have evolved into franchised chains across the country and beyond. This includes many Thailand brands such as The Pizza Company, Café Amazon, AKA, and Dairy Queen etc. Many international brands too have registered and expanded their business footprint in Thailand through a franchise networking. Business conditions cautiously improved for food & beverage franchise outlets through 2022 with the turnaround in the Thai economy. 2023- 2025 considers to be another strong year of recovery for the food & beverage sector to enjoy growth that will move along with an improving outlook for consumer behavior. According to announcement by the Thailand Franchise Association, the franchise industry in Thailand was worth approximately 1.6trillion baht ($46.9 billion) in 2020 and is forecast to record a CAGR of over 9% during 2022-2027. This can be attributed to the Thai government’s increased focus on promoting travel and tourism positively impacting hotel, restaurant, and café businesses. The key profit sector channels in the Thailand foodservice market are Full-Service Restaurant (FSR), Quick Service Restaurant (QSR), accommodation, leisure, pub, club & bar, and retail. The Quick Service Restaurant was the leading profit sector channel in 2022. The Quick Service Restaurant has remained popular among budget-conscious consumers due to its affordable offerings. Chain operators will continue to innovate their menu offerings and expand their consumer base. Consumers’ preference for hygienic and time-saving options will increase the focus of chain operators on these factors in the next few years. This represents a significant portion of the country’s overall economy and reflects the growing popularity of the franchise model in Thailand. The franchise industry in Thailand is diverse and includes a range of sectors, such as food and beverage, retail, education, and services. The food and beverage sector are particularly popular, with many international and local brands operating in the market. The popularity of franchise business model in Thailand and ASEAN continues to grow as can be illustrated from the rising number of additional F&B outlets and the new entry player into Thailand markets. New franchise brands enter the market every year, whit existing ones successfully conduct to enlarge their business opportunities in domestic and international markets. Today, Thailand is the destination of almost 140 international franchise brands from a with almost 20,000 outlets. As F&B and entertainment business come hand in hand and consumer behavior shifted dramatically during the past three years of the pandemic which caused variance in unique consumer consumption journey. These trends encouraged F&B business owners to be innovative to ensure that the variety of assortment in offering high value proposition met customers ‘satisfaction. Also, this is perhaps the comprehensive reason why the F&B industry has continued to be prosperous and consistent. Likewise, the entrepreneur must adapt to leading trends that will shape F&B industry such as popularity in fast casual restaurants, offering a vital to foodie influencer and digital marketing platforms as well as popularity in delivery channels. With the suitable concept for the respective market, F&B franchising bring in high tremendous revenue and continuous economic growth support for Thailand. Furthermore, to pay additional attention to quality and service to make a difference. More especially, management style and relationship with customers are the fundamental principles to survive F&B business in the long game as F&B is a prevailing feature in outlets everywhere and remains trendy choice amongst fashion, health, education, etc. Consumers are constantly searching for modern and interesting dining concepts, and this is one of the reasons why F&B franchises are constantly being sought after by business seekers and franchisees.