Is Doing Business In Thailand Even Worth It?

[PREM-R]

The landlord will probably be Thai/Chinese, he will "call in" on a regular basis and you will get on well, when the lease is due for renewal he will jack up the price X2 orX3 (depends how well you are doing) You will either pay or go, he won't care, he will just wait for the next "punter"

This happens everywhere in Thailand, the T/C landlords are smart cookies, they don't give long leases (awaiting someone to post that they have a 50 year lease from a T/C landlord).

SO What in your opinion is a good solution to this ? is there a solution or do i have to keep moving on from place to place until i find a decent place to buy off? that is if there is a place to just buy off as far as i have been told in patong there is no such thing as buy for good

I can only speak of my experience in Khon Kaen but I know that all the prime sites here are owned by T/C landlords, some properties have been empty for ages but they do not sell, (they don't need to). A friend owns a bar here, he started from scratch, the place had been empty for 'years' he has built the place up and is doing very well now, but he can only get 2 year leases. and each renewal the price has gone up in proportion to how well he is doing ( the landlord calls in regularly and has a coke - and counts how many punters are in the bar). If business property is for sale around here then it is probably not worth buying.

I just wonder if you can't start you business by "guesting" at some already established venue, get a name for yourself and then you will get a regular "following", that way you may be able to get the punters to come to you at some place not on the "beatten track" which will not cost you the earth to rent or buy. Just a thought

[DJ_Illusion]

I think its a great idea and probably the only solution to this is gaining a reputation and building costumer relationships so that wherever i go my costumers would follow, i'll keep that in mind.Cheers!

[DJ_Illusion]

\) well you see thats why ideas like re-decorating, changing staff uniform, changing the theme of the club were invented, along with a solid marketing plan should do the trick as far as i am concerned

Wow! .. What revolutionary business ideas!. You should hurry up and get patents on these "inventions" before they get stolen.

OK simmo since your such a good forcast master and very good at solving problems? tell me what would you do if you realized one day that you are looseing business to some newly opened club just around the corner from you?

[Heng]

The landlord will probably be Thai/Chinese, he will "call in" on a regular basis and you will get on well, when the lease is due for renewal he will jack up the price X2 orX3 (depends how well you are doing) You will either pay or go, he won't care, he will just wait for the next "punter"

This happens everywhere in Thailand, the T/C landlords are smart cookies, they don't give long leases (awaiting someone to post that they have a 50 year lease from a T/C landlord).

Nowadays we (and I'm not speaking for all Thai Chinese by the way) use 12 year standard leases with 10% rent increases every 3 years for most of our properties, at least in business to business relationships. And that's just starting from about 5-6 years ago. For residential we'll still go year to year, and about 5 years tops. Before that, just about everything was on 20 year leases with the tenant doing quite favorably in terms of comparable market rent prices for many properties. We certainly don't jack up rents depending on how well you're doing though, usually just going by the market rent prices and then either adding a bit or lowering a bit depending on gut feel.

[PREM-R]

The landlord will probably be Thai/Chinese, he will "call in" on a regular basis and you will get on well, when the lease is due for renewal he will jack up the price X2 orX3 (depends how well you are doing) You will either pay or go, he won't care, he will just wait for the next "punter"

This happens everywhere in Thailand, the T/C landlords are smart cookies, they don't give long leases (awaiting someone to post that they have a 50 year lease from a T/C landlord).

Nowadays we (and I'm not speaking for all Thai Chinese by the way) use 12 year standard leases with 10% rent increases every 3 years for most of our properties, at least in business to business relationships. And that's just starting from about 5-6 years ago. For residential we'll still go year to year, and about 5 years tops. Before that, just about everything was on 20 year leases with the tenant doing quite favorably in terms of comparable market rent prices for many properties. We certainly don't jack up rents depending on how well you're doing though, usually just going by the market rent prices and then either adding a bit or lowering a bit depending on gut feel.

Do you have any properties in KK City? I am sure most of the farrang bar owners up here would welcome such terms. BTW one of the bar owners wanted a longer than 2 years lease and he got 4 years (by paying all the 4 years rent 'up front'.)

[DJ_Illusion]

Thanx Heng that was very informative

[BKK90210]

Setting up a business in Thailand is the dream of many farang guys. Many farangs like the idea of living there, having a business or making some money and "enjoying life" in Thailand. But very few make it, many end up broke!

If you’re planning to run a bar especially, you have to be worried about the polices, corruptions, mafias and the thai –rules and laws. The "Thai way" will get you in the end. Have a minor run-in with a wealthy or important Thai - possibly your life will be at risk. Thailand is run by industrial elite few with the nationalist idea which ingrained in them from an early age to believe that they are the only country in SE Asia that never been colonized and they wanted to keep it that way. Their whole culture is geared around making sure that foreigners pursuing individual efforts are not successful.

Remember, in Thailand you'll never have any real business, legal or ownership right. The idea of western foreigners living in the country and achieving wealth and status through individual entrepreneurial efforts is seen as a threat to the wealthy class. For this reason, it is never allowed to happen – most of the time anyways.

Think of Thailand, for westerners, as being a bit like a casino. A casino is a place with a touch of excitement, the lure of good fortune/the good life, and a place for fun, even with a bit of a risk. Go to a casino every now and then for fun and that's OK. Go there everyday all-day and you will ultimately lose, because the House Advantage will always get you. So it is in Thailand. The Thai "House Advantage" will get you. They make sure of it.

But if you understood all the risks and if Thailand still appeals to you….. then go ahead - AT YOUR OWN RISKS!

[DJ_Illusion]

Bkk,

spot on, i think any one could have said it any better, i noticed that everywhere i go weither to the ministry of commerce, banks or police, the way they deal with foreigners its so obvious what BKK is Implying.

Its also obvious when they tell you that hey we would open our arms to welcome you if you are gonna benefit the kingdom but rather make your life a living hel_l if your just plan to open up a business and genarate alot of profits and transfer the profits outside the kingdom for example Tesco lotus the government is killing these guys with tax.

[DJ_Illusion]

I would appreciate it if any other experienced members out here had a say about the subjects being discussed. Thanks

[Gary A]

I have a question. How do you intend to finance this multi million baht business.

[DJ_Illusion]

I have a question. How do you intend to finance this multi million baht business.

who said anything about a multi-million baht business???

you know the popular saying the healthier your body is the healthier the brain is and visa versa...

[OldAsiaHand]

just curious Old Asia Hand.

Why are you here? You write about counting off the days till you can leave your Thai cell; is something keeping you here?

Not a flame . . just curious what keeps you in a place you've obviously have lost any empathy for long ago.

To tell the truth, and I say this most respectfully, I'm not particularly inclined to detail my personal circumstances to you to satisfy your curiosity. I've already said several times on this board that I'm here because I have to be. I fervently wish that it was not so, but it is.

I know an awful lot of people in Bangkok who are in similar positions, however -- i.e. for some specific reason, they are stuck here, at least for a while. Do you think all those people who live in Detroit (or Hamburg or Manchester or.....) live in those places because they have chosen them over all other places on earth as the most desireable? Family, commerce, and other obligations shape most of our choices. That's life, huh?

I have no particular agenda concerning Thailand. I really couldn't care less about it. I answer questions on this board occasionally when I have nothing better to do by voicing my own experiences here. My experiences here span a couple of decades so it seems to me that they may hold some value to some people. Still, the politically correct brigade gets in such a twitter when anyone speaks up who doesn't particularly like Thais and is contemptous for what passes here as government and commerce that I don't really know why I bother.

[Gary A]

I have a question. How do you intend to finance this multi million baht business.

who said anything about a multi-million baht business???

you know the popular saying the healthier your body is the healthier the brain is and visa versa...

I don't quite understand how you can purchase a three story Patong Nightclub with a healthy brain and/or body. Perhaps you have chosen to downgrade until you learn the ropes?

[Sir Burr]

I don't quite understand how you can purchase a three story Patong Nightclub with a healthy brain and/or body. Perhaps you have chosen to downgrade until you learn the ropes?

He was looking into in buying the three storey shop-house in Patong.

He ended up backing out and declining to buy.

Edited April 3, 2006 by Sir Burr

[DJ_Illusion]

I don't quite understand how you can purchase a three story Patong Nightclub with a healthy brain and/or body. Perhaps you have chosen to downgrade until you learn the ropes?

He was looking into in buying the three storey shop-house in Patong.

He ended up backing out and declining to buy.

Thank you Sir Burr what can you say totally ignorant and just comes exactly in time to prove my point.

[nonthaburial]

Ok 25 years of Asian living talking now.

I admire the OP for his tenacity and his will to continue, however ignorance is bliss as the saying goes

[Sunbelt Asia]

I am one of those people you cite who most would think 'have done VERY well' in my nearly twenty years here.

I'm sorry, but I don't know you and before when writing this, was not thinking of anybody that has been here for 20 years, when citing “they have done every well."

But come to think of it, on foreigners that have been here over 20 years that have done well, I know a number of them such as Bill Heineke, David Lyons, Harold Vickery, David Glickman among others.

Oh come on now. 'One of the top countries to do business in'? What a pile of rubbish.

Every country has its positives and negatives. Taking in account all factors such as lifestyle, infrastructure, rental rates of offices, cost of living, etc. Thailand has done very well in any of these analysis.

for instance...

Cost Comparison for Thailand,China and Vietnam

http://www.business-in-asia.com/investment_comparison.html

World Bank global ranking of 155 economies on key business regulations and reforms ranks Thailand at #20

The top 30 are New Zealand, Singapore, the United States, Canada, Norway, Australia, Hong Kong (China), Denmark, the United Kingdom, Japan, Ireland, Iceland, Finland, Sweden, Lithuania, Estonia, Switzerland, Belgium, Germany, Thailand, Malaysia, Puerto Rico, Mauritius, the Netherlands, Chile, Latvia, Korea, South Africa, Israel, and Spain.

http://web.worldbank.org/WBSITE/EXTERNAL/N...PK:4607,00.html

The report can be found here

www.doingbusiness.org/Documents/DB-2005-Overview.pdf

Thailand is #8 in the World for Top Overall Country Brand Rankings and the only Asian country in the top 10

Top Overall Country Brand Rankings

1. Italy

2. Australia

3. USA

4. France

5. Maldives

6. Greece

7. Fiji

8. Thailand

9. Egypt

10. Bahamas

http://www.circleofasia.com/News.asp?nID=89

Thailand jumped from 13th to 6th in the World for outsourcing services

http://pda.physorg.com/lofi-news-index-cou...iness_8409.html

Thailand is ranked as #27 in the World for overall competitiveness.

http://www.nationmultimedia.com/2005/05/12...s_17334136.html

Why Thailand?

The many benefits Thailand offers foreign investors make it one of the region's most attractive investment destinations. Comparative analysis of costs of doing business in Asia underscores Thailand as a cost-competitive location for investors, offering a quality lifestyle for expatriates. Adding a healthy macroeconomic environment, a positive regulatory business environment and a welcoming culture clearly sets Thailand apart from its competitors.

http://www.business-in-asia.com/why_thailand.htm

Global Market Rents

Finds Bangkok as one of the lowest in the World for office rental cost...

http://www.cbre.com/NR/rdonlyres/E0E47B5C-...sAugust2005.pdf

I know you earn your living off people naive enough to believe this kind of nonsense, but even a casual reading of the posts on this forum amply demonstrates that the overwhelming experience foreigners have in business here is quite negative.

Our client’s success is our business. We have an impeccable reputation for providing business solutions to investors in Thailand and over 20 other countries around the World.

Many successful investors do not have the need to visit www.thaivisa.com. Why should they? Their questions have been solved and they already have a visa/ work permit.

Some people that have not done well are reading the forum to see how they can stay in Thailand. To be frank, I don't remember a post that someone stated " I lost money in Thailand" Not saying a post like that doesn’t exist but you will have to do a search and I personally don't get a sense " this forum amply demonstrates that the overwhelming experience foreigners have in business here is quite negative."

Regardless, the combination of smugness ond sheer stupidity most Thais bring to commercial transactions continues to astonish me nearly every day.

Smugness? I have seen it only once!!! A Thai lawyer who said " This is our lease, take it or leave it" 99.9% will listen and make changes.

Sheer Stupidity? If you are talking Thai business people, again I never ever have seen one that I classified as " Sheer Stupid"

No foreigner with the slightest sense ought to be stumbling around in a country like this pretending to think he is accomplishing anything productive.

Are you saying then, all foreigners in Thailand are "sheer stupid" and are pretenders or just the ones who stumble?

And if he tells others that he is......well, he is either incredibly dumb, hopelessly naive, or a complete scondrel.

If it is all foreigners, then you should be open minded. Come to our office, pull any numbered seal file. You can watch me dial the phone and get the clients permission that you can talk and then ask them how business is in Thailand? I guarantee that over 80% are much more positive about Thai business than negative.

www.lawyer.th.com

[DJ_Illusion]

There you go!

you see i like that Sunbelt asia you dont talk from la la land you bring facts and put them on the table, spoken like a true professional that you are, Thank you very useful, informative posts amd thanks for taking the time to write them so that poeple like me who acually need professional advise may benefit

[Sunbelt Asia]

Remember, in Thailand you'll never have any real business, legal or ownership right. The idea of western foreigners living in the country and achieving wealth and status through individual entrepreneurial efforts is seen as a threat to the wealthy class. For this reason, it is never allowed to happen – most of the time anyways.

How bout Americans who are able to own most Thai businesses 100%

Also any nationality that is able to have full ownership rights on businesses in exporting, manufacturing or Hotel management?

How bout the BOI which has granted benefits to many foreigners who have majority interest with land ownership?

How bout foreigners who are able to own a business under the Alien Business License?

How many of these companies have had western foreigners/shareholders achieve wealth? If any of these foreigners did not, it wasn’t because they were foreigners!

The landlord will probably be Thai/Chinese, he will "call in" on a regular basis and you will get on well, when the lease is due for renewal he will jack up the price X2 orX3 (depends how well you are doing) You will either pay or go, he won't care, he will just wait for the next "punter"

One of the reasons why it pays to have a firm like ours, review the lease. Only one of our 12 restaurants are on any lease shorter than 9 years and all our in prime locations with rent averaging 100,000 Baht to 325,000 Baht per month. Anything longer than 3 years has to be registered at the Land Dept. However we do accept 3 years with 3+3 options.

This means, we are very careful to have wording so the landlord is bound to the option offered. Wording such as a material consideration for us to enter into the Lease, the Landlord irrevocably covenants and offers to us the right to extend the term or renew this Lease for each of the Extension Options. This offer by Landlord to us to extend the term or renew this Lease as set in the contract is irrevocable.

The people that can in trouble are ones that don’t bother getting advice and are “ Sabai Sabai” You are just asking for trouble then!

Also, the increase in rent you put in the agreement before you sign. Something like...

The rental for the first renewal lease term shall be cap at a maximum 10% increase per three year term payable in installments of a maximum ___ Baht per month.....

www.lawyer.th.com

[BKK90210]

DJ…..

Forget about farang owners and alike you might meet in Thailand boasting about their good life there. It is common for faltering foreigners to keep up appearances. Mostly they end up broke or crazed, sometimes both. Then they leave.

If you are retired or have steady funds from abroad and want to live modestly on those funds, go ahead, but watch yourself. And if you're a young dude travelling around the world, and you want to spend some time in Thailand teaching or whatever for experience, then that's OK too.

But there are also…..Many westerners of modest means were selling up and going to "enjoy life" in Thailand ….and then getting shafted in the end!

Of course, if going to Thailand with all your money and slowly losing it and ending up teaching English for a pittance (because that's about all you can do), If this still, appeals to you then go ahead, and afterward still be willing to share your impoverishment and frustration with other exploited western teachers.

If not, think seriously…. Don't make the mistake of thinking that as a foreigner (even with professional skills) you can "make a contribution" to Thailand that much, no matter how good your intentions or needed your skills may be. Your contribution will MOSTLY *never* be welcomed, only your money.

There is a saying in Thai that captures it well: "farang roo mark mai dee" - foreigners who know too much [about Thailand] are no good.

Gullible tourists, however, are great. So, go to Thailand as a tourist if you like, enjoy what you enjoy there, but don't be taken in by the culture or people, as many westerners have, and don't under any circumstances give up anything back home to go and stay in Thailand unless you are financially secure for life, or know exactly what you are doing. There is a tradition of resident foreigners in Thailand not telling to the truth about the country because they don't like to admit to themselves and to others about the mistakes in doing business there due to a mixture of greed, incompetence, and arrogance!

Just remember: It is common for faltering foreigners to keep up appearances- IT’S A FACE THING here in Thailand!

I'm neither positive nor negative about any farangs doing the businesses in Thailand. But if this will be any helpful info to you....then great

Good luck

[bendix]

To tell the truth, and I say this most respectfully, I'm not particularly inclined to detail my personal circumstances to you to satisfy your curiosity. I've already said several times on this board that I'm here because I have to be. I fervently wish that it was not so, but it is.

I know an awful lot of people in Bangkok who are in similar positions, however -- i.e. for some specific reason, they are stuck here, at least for a while. Do you think all those people who live in Detroit (or Hamburg or Manchester or.....) live in those places because they have chosen them over all other places on earth as the most desireable? Family, commerce, and other obligations shape most of our choices. That's life, huh?

I have no particular agenda concerning Thailand. I really couldn't care less about it. I answer questions on this board occasionally when I have nothing better to do by voicing my own experiences here. My experiences here span a couple of decades so it seems to me that they may hold some value to some people. Still, the politically correct brigade gets in such a twitter when anyone speaks up who doesn't particularly like Thais and is contemptous for what passes here as government and commerce that I don't really know why I bother.

Well, fair enough. I respect your right to privacy. It must be very depressing to have to be somewhere you don't want to be.

I don't envy you.

[PREM-R]

(Sunbelt Asia Posted Yesterday, 2006-04-03 20:20:08) The rental for the first renewal lease term shall be cap at a maximum 10% increase per three year term payable in installments of a maximum ___ Baht per month.....

My experience here in KK city is that it is the property owner who make ALL the rules regarding a lease, you accept it or you don't, the landlord does not care, if you do not sign up someone else will come along who will accept.

[~G~]

...The many benefits Thailand offers foreign investors make it one of the region's most attractive investment destinations...

Greg, be honest. How would it be like for you coming here and trying to do the same, without having a Thai Spouse with extensive management experience?

Don't get me wrong, I am not going to the other extreme. I believe business here is worthwhile in some circumstances, mostly when focusing on your advantages and strong points.

Having said that, generally as far as I have seen with foreigners here, including those with strong and solid business background, and a good track record in their home countries, success stories such as yours are rare exeptions, unfortunetaly not the norm.

[Sunbelt Asia]

Greg, be honest. How would it be like for you coming here and trying to do the same, without having a Thai Spouse with extensive management experience?

I certainly would have done not as well in my case. Even though I work hard and bring a lot of knowledge to the table, Nui's management skills with Thais have been a big plus.

It also would be safe to say, if I was not aware of the same knowledge and advice that is given out to our clients now, when starting out here 5 years ago, along with not having my spouse support it would have been a disaster.

Having said that, generally as far as I have seen with foreigners here, including those with strong and solid business background, and a good track record in their home countries, success stories such as yours are rare exeptions, unfortunetaly not the norm.

I agree that management is of course important. Most of the people that are successful here are that. Without fail, they all have good staff that supports them

Even you if you are not a good people person, you still can do well. A bar owner recently relocated back to the States and he made millions of dollars here. He is a good entrepreneur but had lousy people skills and was very successful in spite of this here. Most foreigners didn’t like him as well but yet most of what he touched turned to gold. He knew the numbers back and forth and sat with a calculator most of the time but that was his strength so he wouldn't be ripped off. In spite of this it did happen from time to time but his profits more than offset these miscues. People that took over his businesses are even doing better, on average 20-30% better. He had luck; location, vision and giving the customer want they wanted.

One question I ask successful business owners what they did to separate them from the competition. The underlying theme was passion for giving the customer what they wanted and seeing the business thru a customer/clients eye.

Here is a couple examples

L'Opera owner whose restaurant has been open since 1983..

The owner of L'Opera is a portly domineering figure with a flair for dressing in outrageous and trendy fashions. He marches around surveying his restaurant, like a general inspecting his troops. I have never had the opportunity to talk to the gentleman but I am sure he knows me as the guy with the gym bag and all the books; who eats too much free bruschetta. He looks like a demanding perfectionist and his restaurant shows it.

http://www.thailandroad.com/joe/italian.html

Don Battles is an icon in the Phuket community.

Surprisingly, most items on Don's menu come from customer suggestions. He was once asked why his menu didn't include shepherd's pie. Don's reply was, "Well, why don't you teach us and then we'll put it on the menu!' He asserts that people want to eat the food their mother cooked for them and as his customers' recipes have generally been passed down from their mums, Don's Cafe serves truly home style meals.

http://www.thaiwave.com/benjarong/variety/dons-story.htm

Chiva-Som the No 1 Overseas Destination Spa

The readers of the UK edition of Conde Nast Traveller magazine have voted Chiva-Som as their No 1 Overseas Destination Spa, achieving a remarkable 92.58 per cent in overall client satisfaction, scoring top marks in five of the world.

Says Joy Menzies,This Award is a reflection of Chiva-Som's commitment to provide the highest level of personal service and its ability to impart a meaningful message to all its guests.

http://www.hotelthailand.com/huahin/chivasom/t_press.html

By the way Joy also owns the The Barbican and the Bull's Head and one of the resons she has the "Toss The Boss" game You order your drink, you toss a coin, you win the toss, your drink is free." She treats her clients like she wants to be treated and why both places have been open now more than 10 years.

http://www.greatbritishpub.com/bullshead/r...views/index.htm

Just remember: It is common for faltering foreigners to keep up appearances- IT’S A FACE THING here in Thailand!

Is it the Thai water, when foreigners are concerned about face like Thais, so much that foreigners are reporting profits on the companies and paying tax on their earnings?

I must be drinking the water as well then but it still doesn’t make me feel better when paying corporate tax.

My experience here in KK city is that it is the property owner who make ALL the rules regarding a lease, you accept it or you don't, the landlord does not care, if you do not sign up someone else will come along who will accept.

If they are valid, we use some of these points to our advantage, ...

The brand recognition will increase traffic and energy to the location, increasing their property value.

The leasehold improvements will increase their property value. We show before and after pictures.

Having a dependent brand, the odds increase they are not looking for a new tenant every 2 years.

Having them look at other successful locations that are operating, makes the tenant the one in control.

The Franchisor/lawyer is demanding these clauses in the contract.

The tenant will pay the tax to register at the Land Dept for a long term lease. No reason not to have a long term lease then.

Another plan is, if they want 100,000 Baht a month, we suggest giving the landlord 110,000 Baht a month for the first three years with no increase for the second term. The third term is 10% increase. We use the greed of the landlord where he gets more money than he wanted at first and the actual rent increase come to only 3,333 Baht per month for 108 months. This is nothing compared to having the security of not having the rent increased 100% or being kicked out after three years.

www.lawyer.th.com

[meadish_sweetball]

...The many benefits Thailand offers foreign investors make it one of the region's most attractive investment destinations...

Greg, be honest. How would it be like for you coming here and trying to do the same, without having a Thai Spouse with extensive management experience?

Don't get me wrong, I am not going to the other extreme. I believe business here is worthwhile in some circumstances, mostly when focusing on your advantages and strong points.

Having said that, generally as far as I have seen with foreigners here, including those with strong and solid business background, and a good track record in their home countries, success stories such as yours are rare exeptions, unfortunetaly not the norm.

It depends where you look though. I know a fair few foreigners who make a decent profit here - in most cases nothing extravagant, but definitely enough to live very comfortably. But it is not for everyone. It takes connections, the right mindset, a willingness to adapt to a certain degree, a long series of trial and error situations, an angel's patience and a strong determination. And at the outset, as with business elsewhere, a solid business idea.

Make a serious effort at understanding the culture. Observe and ask, and never make the mistake of drawing too far-reaching conclusions based on hearsay or a few negative experiences. Look for solutions instead of complaining. It does not take Einstein to identify problems, it is the people who succeed despite the problems that you should ask for advice.

[Pattaya_Fox]

Just remember: It is common for faltering foreigners to keep up appearances- IT’S A FACE THING here in Thailand!

Is it the Thai water, when foreigners are concerned about face like Thais, so much that foreigners are reporting profits on the companies and paying tax on their earnings?

I must be drinking the water as well then but it still doesn’t make me feel better when paying corporate tax.

My experience here in KK city is that it is the property owner who make ALL the rules regarding a lease, you accept it or you don't, the landlord does not care, if you do not sign up someone else will come along who will accept.

If they are valid, we use some of these points to our advantage, ...

The brand recognition will increase traffic and energy to the location, increasing their property value.

The leasehold improvements will increase their property value. We show before and after pictures.

Having a dependent brand, the odds increase they are not looking for a new tenant every 2 years.

Having them look at other successful locations that are operating, makes the tenant the one in control.

The Franchisor/lawyer is demanding these clauses in the contract.

The tenant will pay the tax to register at the Land Dept for a long term lease. No reason not to have a long term lease then.

Another plan is, if they want 100,000 Baht a month, we suggest giving the landlord 110,000 Baht a month for the first three years with no increase for the second term. The third term is 10% increase. We use the greed of the landlord where he gets more money than he wanted at first and the actual rent increase come to only 3,333 Baht per month for 108 months. This is nothing compared to having the security of not having the rent increased 100% or being kicked out after three years.

www.lawyer.th.com

1st period 110,000 X 36 = 3,960,000 = 360,000 increase

2nd period no increase I assume that you mean 100,000 X 36

3rd year 10% increase 110,000 X 36 = 3,960,000 = 360,000 increase

total increase paid on original agreed 100,000 per month = 720,000 over 9 years

720,000 divided by 108 = 6666 increase per month above 100,000 per month

There will also be an accounting benefit to the landlord as the rent for the first period was increased and paid before the end of the period.

[OldAsiaHand]

I know a fair few foreigners who make a decent profit here - in most cases nothing extravagant, but definitely enough to live very comfortably...it is the people who succeed despite the problems that you should ask for advice.

Perhaps not. I have 'succeeded' in a way that could only be described by anyone as 'extravagant,' to use your term. Yet, when I answered the OP's question with observations based on my conclusion that it is NOT worth it to try and do business in Thailand, I have been dismissed as at best a bitter nut and at worst a cynical loser.

It appears that most poster here are only interested in the point of view of people who support their own predispositions. They not looking for advice; they're seeking affirmation.

[Pattaya_Fox]

I know a fair few foreigners who make a decent profit here - in most cases nothing extravagant, but definitely enough to live very comfortably...it is the people who succeed despite the problems that you should ask for advice.

Perhaps not. I have 'succeeded' in a way that could only be described by anyone as 'extravagant,' to use your term. Yet, when I answered the OP's question with observations based on my conclusion that it is NOT worth it to try and do business in Thailand, I have been dismissed as at best a bitter nut and at worst a cynical loser.

It appears that most poster here are only interested in the point of view of people who support their own predispositions. They not looking for advice; they're seeking affirmation.

You are giving us the benefit of your experience and I respect what you are saying.

I for one would not have a business again in Thailand......for me Thailand is now a place to spend 4 or so months of the year on vacation.

Many people have the urge to go into business here....and that I am sure is great for them as long as they are enjoying it and making a living.

As far as the OP is concerned I would say that you are looking to enter a type of business which is probably one of the hardest to make a living at. Many a farang has faltered in the land of the club/bar.

If you are really serious about running a business here do your own home work and try to find something which is different enough for you to at least capture new patrons....and then be prepared to update/alter before the competition gets the edge on you.

Do not trust anyone......and be extremely sceptical about the business figures which are presented to you.........

You are far better starting a new business from scratch with your own new ideas than buying a so called established business which has more than likely run it`s course and is now struggling.

Why do you think that all these businesses are on the market.....because they are wildly successful?......or because the current operator can`t wait to unload the mill stone around his neck.

Take your time........and remember your first impressions are usually right

Good luck!

[~G~]

It depends where you look though. I know a fair few foreigners who make a decent profit here - in most cases nothing extravagant, but definitely enough to live very comfortably. But it is not for everyone. It takes connections, the right mindset, a willingness to adapt to a certain degree, a long series of trial and error situations, an angel's patience and a strong determination. And at the outset, as with business elsewhere, a solid business idea.

Make a serious effort at understanding the culture. Observe and ask, and never make the mistake of drawing too far-reaching conclusions based on hearsay or a few negative experiences. Look for solutions instead of complaining. It does not take Einstein to identify problems, it is the people who succeed despite the problems that you should ask for advice.

meadish, first, thanks for the good post.

I have a business here and making enough to support myself with a reasonable lifestyle. I have taken a few turns and identified those areas which for me might lead to bankruptcy, versus those that can be profitable.

I have not been here for many years, but can identify some patterns.

Although I have some Thai clients, I mostly stay away from dealing with Thai companies, or Thai customers in general. I had many business meetings with major companies in Thailand, most were fruitless. I found the pace they take (or don't take) decisions extremely frustrating. Finally, after months of dragging things, giving you a decision, only to change their mind a week later. And this is not some small condo owner I speak of, but Public Thai companies.

I don't go for the average Thai consumer, as I prefer to stay away from the ruthless price wars going on here at all levels.

I do not compete with Thais in their field. Mostly their expenses are lower. Mostly they don't need to handle they same visa-wp-company overhead. They don't have to rely on a sales person for customers who don't speak english. I can speak Thai to some extent, but not enough for business negotiations.

For the services we provide, I sell quality, never tries to be the cheapest. In the Thai market, price is more meaningful than quality - and these are words I heard from Thai managers, not only my perspective.

For the products we provide, I do not aim for the Thai market at all. I found that I can succeed with much better results selling to other markets. They can take timely decisions. They are not scared of innovation and are much more open to new ideas.

----

I make a living, but in relation to the effort I put into it, I expect much more.

- I personally know 2 very successful business people, one of them with a solid business experience of over 20 years. They are here negotiating with Thai companies for around two years, still cannot close a deal. And they have a great service successful in many other countries.

- I personally know other people with good experience in their field being here and still trying to break even. Again, those people were very successful elsewhere. And I am not talking about the average "BillyBoy" coming to start a beer bar in Pattaya or Samui.

I am yet to see a foreign entrepreneur coming here and successfully selling to Thais. Those on this board claiming success in this field are either Thais, "luk krung"s or have a Thai spouse as the actual manager of the business.

[Sunbelt Asia]

1st period 110,000 X 36 = 3,960,000 = 360,000 increase

2nd period no increase I assume that you mean 100,000 X 36

3rd year 10% increase 110,000 X 36 = 3,960,000 = 360,000 increase

total increase paid on original agreed 100,000 per month = 720,000 over 9 years

720,000 divided by 108 = 6666 increase per month above 100,000 per month

There will also be an accounting benefit to the landlord as the rent for the first period was increased and paid before the end of the period.

I understand and thanks for pointing this out. Also, for letting me explain the example I gave in more detail.

If a landlord wanted to give you a 3 year plus 3 year lease which is norm. This is one of the suggestions to get a longer lease.

110,000 per month for 6 years and 121,000 per month for years 7-9. The net additional cost for this suggestion is 360,000 Baht. Why do I say that?

In theory if the Landlord was willing to give a 3+3+3 with a 10% increase cap for each term...

Years 1-3 would be 100,000 Baht per month

Years 3-6 would be 110,000 Baht per month

Years 7-9 would be 121,000 Baht per month

But when I’m willing to give 110,000 Baht for the first term, I'm paying 10,000 Baht more per month or 360,000 Baht for the first term.

The second term is the same amount... 110,000 Baht per month

The third term is the same amount... 121,000 Baht.

If he was willing to give you a 3+3+3 lease anyway, then you are not going to increase his payout for the first term to 110,000 Baht from 100,000 Baht.

Hence this example, is for only when the landlord only wants to give me 3 years or a 3+3 term. My real cost to get the additional term above the norm 10% increase per term was 3,333 per month for 9 years. No matter how you looked at it, in a prime location you were going to have a increase for the second and third term of at least 10% I don’t want it to be

Years 1-3 100,000 Baht per month

Years 3-6 150,000 Baht per month

Years 7-9 225,000 Baht per month

By the way, this even worked once when a landlord wanted 20% per term. I gave a tad more money in the first term, no increase in the second term and only a 10% increase in years 7-9 to have a net savings. Some Landlords look at only today and not the future, this example sometimes works with that kind of personality.

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