Micro business Franchises

[backtofront]

Thailand supports a plethora of small local business brands and franchises.  In every village no matter how quiet and rural the chances are that you will find a coffee kiosk and if not coffee, tea.  And generally it will be one or other of the branded franchises no one else has ever heard of.

 

Is this uniquely Thai in that the franchise concept seems to have filtered right down to the micro business level? It is not just coffee and tea either. There are franchise options for noodle carts and the sale of fresh meat. Do these franchises work for the vendors? 

 

[Rc2702]

Ha Dow - five star chicken

Cha phayom - cold drinks with ice

Go deng - noodles with pork balls

 

They may appear to be micro franchises but I think they are stable long term business's for people prepared to run them correctly and choose their location wisely.

 

The way to know if they work is by observing and also time. If it does not work they will move it or give up. Similar to anywhere.

 

The Haa dow franchise looks a good option. The hours do not need to be as long. The sell through seems like 6 hours max but location is extremely important. They all operate with success outside a 711/hospital/government building./food market* 

 

I seen 1 recently which looks a bit glum and sales look very bad but I think it's the people not running it right.

 

 

 

 

[badischer Barde]

That's a great question. And (apologies to the TS if that goes in he wrong direction) why is that? Why are Thai willing to pay for corporate design, ideas and uniformity, even for something as banal as a 7/11 sign?

In many countries you would be better off saving that money because in the case of an grocries store it wouldn't really help, and in case of an cafe the uniformity might actually harm ones business.

 

I understand that on a more abstract level in most wealthier contries you start your own business because you want to be independent, and actualize your own ideas, something you can't with franchising, but that that might not be of much concern in poorer countries. Still...

[Rc2702]

Just now, badischer Barde said:

That's a great question. And (apologies to the TS if that goes in he wrong direction) why is that? Why are Thai willing to pay for corporate design, ideas and uniformity, even for something as banal as a 7/11 sign?

In many countries you would be better off saving that money because in the case of an grocries store it wouldn't really help, and in case of an cafe the uniformity might actually harm ones business.

 

I understand that on a more abstract level in most wealthier contries you start your own business because you want to be independent, and actualize your own ideas, something you can't with franchising, but that that might not be of much concern in poorer countries. Still...

Bit surprised with the 711 example. That's the number 1 franchise and I've never seen one close down and given the footfall im surprised this is being discussed in regards to micro business's.

[badischer Barde]

true. But 7/11 is imho a good example for pointless franchise, is it not? One buys in a groceries-shop because it is there and one needs something, not because it belongs to a chain/franchise. Only reason you don't buy in a not-7/11 is: there are none...

Might be different with food. If you survived a dozen meals at happy squid fishballs you are more inclined to eat there again rather than in any unknown place. But bottled water is bottled water...

[Rc2702]

Just now, badischer Barde said:

true. But 7/11 is imho a good example for pointless franchise, is it not? One buys in a groceries-shop because it is there and one needs something, not because it belongs to a chain/franchise. Only reason you don't buy in a not-7/11 is: there are none...

Might be different with food. If you survived a dozen meals at happy squid fishballs you are more inclined to eat there again rather than in any unknown place. But bottled water is bottled water...

The local shop versus 711.

 

Pay many bills at 711

Buy goods online via 711

Bigger variety at 711

 

Buy all essential food stuffs at 711.

 

I don't think a small business owner has the choice of opening a 711 or going it alone and competing on the same scale.

 

These 711 are possibly reserved for very wealthy people and the return is massive. The prices in 711 are not the same in all 711 either

 

These franchisees operate outside what we may think is the correct franchise rules. (Uniform pricing)

 

The location of 711's are also very well positioned, so much so, that other shops in its vicinity prosper.

 

It's the complete opposite of a pointless franchise.

 

A lot of people walk into a shop without knowing what they will buy or even need. No plan. Some go in for the A/C.

 

 

 

 

 

[badischer Barde]

@ TS feel free to shut us up if we move too far from topic...

 

@  Rc I don't know that much about the groceries shops in Thailand, can't even compare to independents because I haven't found any. Most of what you list however (everything but the positioning of shops) seems to be true for most independent and small-chain shops in China as well, but yeah, maybe it is easier to just book the whole 7/11 package and run with it...

[blackcab]

7 hours ago, badischer Barde said:

I understand... you start your own business because you want to... actualize your own ideas, something you can't with franchising

 

That's your answer. A lot of Thai people are great at duplicating other people's ideas, and that works very well with the franchising concept.

[backtofront]

11 hours ago, blackcab said:

 

That's your answer. A lot of Thai people are great at duplicating other people's ideas, and that works very well with the franchising concept.

The answer I get when I come up with yet another brilliant and original idea is "yes, but nobody in Thailand does it that way". And it is obvious that the converse also applies. However I still don't understand how with the slender margins in all local businesses, there is room to factor in franchise fees.

 

Someone was talking about 7/11 the other day, saying they walked away from one because there is no restriction  on where the next one is going to open up.

 

But what really fascinates me is that they can take perfectly good Arabica coffee, pour it over ice, add condensed milk and run a viable business. The other thing I find odd is that you find very expensive and temperamental coffee machines in a lot of those coffee kiosks when driving through the middle of nowhere.

 

 .

[mike324]

On 12/3/2017 at 4:46 PM, badischer Barde said:

That's a great question. And (apologies to the TS if that goes in he wrong direction) why is that? Why are Thai willing to pay for corporate design, ideas and uniformity, even for something as banal as a 7/11 sign?

In many countries you would be better off saving that money because in the case of an grocries store it wouldn't really help, and in case of an cafe the uniformity might actually harm ones business.

 

I understand that on a more abstract level in most wealthier contries you start your own business because you want to be independent, and actualize your own ideas, something you can't with franchising, but that that might not be of much concern in poorer countries. Still...

Some people do not have the skills or ability to create a new business from scratch, hence the franchise model. You just sell and collect money, no need to worry about preparation part of the raw materials and marketing.

[MrJerome]

On 12/3/2017 at 10:46 AM, badischer Barde said:

That's a great question. And (apologies to the TS if that goes in he wrong direction) why is that? Why are Thai willing to pay for corporate design, ideas and uniformity, even for something as banal as a 7/11 sign?

In many countries you would be better off saving that money because in the case of an grocries store it wouldn't really help, and in case of an cafe the uniformity might actually harm ones business.

 

I understand that on a more abstract level in most wealthier contries you start your own business because you want to be independent, and actualize your own ideas, something you can't with franchising, but that that might not be of much concern in poorer countries. Still...

Not true in my opinion...That's why most mini markets run a lot worse than most 7 / 11 shops do....I sell houses in an urban enviroment. and many times the question get's asked , where the nearest 7 / 11 is..it's true..it is a point of value to many people. renters too....Other exmaple....when driving anywhere....being hungry thirsty or whatever.  what you look for?  Right a 7 /11 sign...many time we pass mini market to go to seven...why??  marketing strategy.