Canon Marketing (Thailand) will franchise its photo book-making service next quarter to tap rising demand from consumers in the near future, while its traditional enterprise market has been throttled by the global crisis.
"The photo book-making service overseas such as in the US is very popular, as the business so far this year has grown by 35 per cent from last year. We expect our revenue from the new business to grow not less than that in the US," Soontorn Pantaramongkon, senior director and general manager for business imakging solutions, said yesterday.
Canon wants to diversify risk from the corporate market, which took the brunt of the economic slump, while the retail market was relatively unscathed.
The company along with its strategic partner in photo book-making - Sib Khon - were preparing a franchise business model under the brand "imageGang by Canon", as well as a marketing plan aimed at whipping up consumer demand.
The companies plan to unveil the new business model next quarter.
Canon Marketing will recognise revenue from the business by selling printing solutions and after-sales services to the franchisees.
Sib Khon has designed photo book-making software to use with Canon's Press C6000 digital image printer. Canon and Sib Khon started the business at the beginning of this year by setting up the first branch in Siam Square.
The photo book-making service is under Canon's print on-demand business unit (POD). Sales of Canon printers have dropped from last year, while sales of products from the POD and the professional and graphic arts business unit (PGA) have increased by 50 per cent.
About 80 per cent of Canon's revenue comes from multifunction photocopiers, and colour and black-and-white digital printers.
The overall market for those products in the first half of the year slid by 15 per cent from the same half in 2008. Although Canon has lost share in that business - from 23 per cent last year to 20 per cent - it is still the market leader.
POD and PGA focus on printing for young entrepreneurs and SMEs, whose printing volumes are smaller than that of a large corporation.
Examples of printing materials are business cards, manuals, brochures, cards, posters, leaflets and coupons.
Canon targets its total revenue rising 18 per cent this year to Bt1.28 billion, with Bt60 million generated by POD and PGA. That forecast excludes revenue from photo book-making service, which is quite difficult to evaluate this year.
Thursday, September 24, 2009
Wednesday, September 16, 2009
CP ALL TO INCREASE NUMBER OF 7-ELEVENS
CP All, the operator of 7-Eleven convenience stores, is planning to increase the number of franchised stores to 60 per cent within five years.
Managing director Piyawat Titasattavorakul said yesterday that franchised stores showed higher margins than the company's own stores, because they are run by individual entrepreneurs for whom efficiency and returns are the top priority. The plan is also in line with the company's policy to create more entrepreneurs.
At present, the number of 7-Eleven stores exceeds 5,000, with 2,344 or 45 per cent being run by franchisees. The company wants the proportion of franchised stores to increase by 3 per cent per annum.
"Ninety per cent of stores in countries like Japan and the United State is run by franchisees. We would like to do the same. CP All plans to only operate 3,000 branches and franchise the rest," he said.
Anittha Thanamit, assistant managing director, said that to support this policy CP All would have to offer franchisees more attractive returns.
At present, CP All offers two franchising models. In the first model, franchisees have to invest Bt1.5 million per branch, of which Bt500,000 will be spent on franchising fees and store decoration, with the remaining Bt1 million held back as a deposit that will be returned to franchisees if they want to bow out.
The second model requires an investment of Bt2.65 million per branch, of which Bt900,000 is put aside as a deposit guarantee and the remaining Bt1.75 million spent on franchising fees, store decoration and management.
Under the second model, CP All promises that investors can breakeven within three years.
Aside from the expansion of franchised stores, CP All is also planning to get 7-Eleven stores to focus more on food and beverages.
Piyawat said consumer goods generated a margin of around 10 per cent, while foods and drinks roughly 20 per cent. Besides, some of the food and drink items sold in 7-Eleven are produced by the Charoen Pokphand Group, CP All's parents company.
He added that at present 80 per cent of the products sold in 7-Eleven were edibles, and the firm plans to increase this proportion to 85:15 in the next three years.
Managing director Piyawat Titasattavorakul said yesterday that franchised stores showed higher margins than the company's own stores, because they are run by individual entrepreneurs for whom efficiency and returns are the top priority. The plan is also in line with the company's policy to create more entrepreneurs.
At present, the number of 7-Eleven stores exceeds 5,000, with 2,344 or 45 per cent being run by franchisees. The company wants the proportion of franchised stores to increase by 3 per cent per annum.
"Ninety per cent of stores in countries like Japan and the United State is run by franchisees. We would like to do the same. CP All plans to only operate 3,000 branches and franchise the rest," he said.
Anittha Thanamit, assistant managing director, said that to support this policy CP All would have to offer franchisees more attractive returns.
At present, CP All offers two franchising models. In the first model, franchisees have to invest Bt1.5 million per branch, of which Bt500,000 will be spent on franchising fees and store decoration, with the remaining Bt1 million held back as a deposit that will be returned to franchisees if they want to bow out.
The second model requires an investment of Bt2.65 million per branch, of which Bt900,000 is put aside as a deposit guarantee and the remaining Bt1.75 million spent on franchising fees, store decoration and management.
Under the second model, CP All promises that investors can breakeven within three years.
Aside from the expansion of franchised stores, CP All is also planning to get 7-Eleven stores to focus more on food and beverages.
Piyawat said consumer goods generated a margin of around 10 per cent, while foods and drinks roughly 20 per cent. Besides, some of the food and drink items sold in 7-Eleven are produced by the Charoen Pokphand Group, CP All's parents company.
He added that at present 80 per cent of the products sold in 7-Eleven were edibles, and the firm plans to increase this proportion to 85:15 in the next three years.
Tuesday, September 15, 2009
GFA to double outlet total in five years
Global Franchise Architects (GFA), the Swiss owner of Coffee World and other food and beverage chains, is set to double its business size to 200 outlets by 2013.
About half the additional outlets will belong to Coffee World, with the rest under its six diversified brands: The Cream & Fudge Factory, Pizza Corner,New York 5th Avenue Deli, The Donut Baker, Juisomania and Conizza. Each outlet will require an investment of 2-6 million baht, depending on store size.Each will create six to 10 new jobs.
"We currently have the capability to open at least 10 outlets per month, which would double our size in one year. We are confident of moving faster than in the past because our people, product variety, factories and IT solutions are all ready. However, our biggest challenge is to find good locations," said Fred Mouawad, the company's chairman and CEO.
Coffee World is the only chain to have its own coffee roasting factory in Thailand.
Mr Mouawad wants to speed its expansion from next year because he is optimistic the economy will improve slightly and inquiries from potential franchisees have increased. The downturn has not hit the food business too hard because people still have to eat, he said.
To attract investors, the company has cut the franchisee fee for food and beverage brands by 20% until the year-end.
GFA operates 105 outlets nationwide.About 75% are company-owned and the rest franchised. In the near future, the ratio will slide to 60:40.
Sales are not expected to grow this year, for the first time in 12 years in Thailand, because of the tourism slump.
Mr Mouawad aims to counter this with more local promotion and lowerpriced products.
GFA plans to introduce its new coffee outlet format serving a full range of bakery items at CentralWorld in the coming months. The company will spend 6 million baht for this new outlet.
GFA operates 210 stores under nine food and beverage brands in 10 countries.Thailand is its biggest market with 105 outlets, followed by India with 75. The rest are in Vietnam, Indonesia, Dubai,Bangladesh and Oman.
About half the additional outlets will belong to Coffee World, with the rest under its six diversified brands: The Cream & Fudge Factory, Pizza Corner,New York 5th Avenue Deli, The Donut Baker, Juisomania and Conizza. Each outlet will require an investment of 2-6 million baht, depending on store size.Each will create six to 10 new jobs.
"We currently have the capability to open at least 10 outlets per month, which would double our size in one year. We are confident of moving faster than in the past because our people, product variety, factories and IT solutions are all ready. However, our biggest challenge is to find good locations," said Fred Mouawad, the company's chairman and CEO.
Coffee World is the only chain to have its own coffee roasting factory in Thailand.
Mr Mouawad wants to speed its expansion from next year because he is optimistic the economy will improve slightly and inquiries from potential franchisees have increased. The downturn has not hit the food business too hard because people still have to eat, he said.
To attract investors, the company has cut the franchisee fee for food and beverage brands by 20% until the year-end.
GFA operates 105 outlets nationwide.About 75% are company-owned and the rest franchised. In the near future, the ratio will slide to 60:40.
Sales are not expected to grow this year, for the first time in 12 years in Thailand, because of the tourism slump.
Mr Mouawad aims to counter this with more local promotion and lowerpriced products.
GFA plans to introduce its new coffee outlet format serving a full range of bakery items at CentralWorld in the coming months. The company will spend 6 million baht for this new outlet.
GFA operates 210 stores under nine food and beverage brands in 10 countries.Thailand is its biggest market with 105 outlets, followed by India with 75. The rest are in Vietnam, Indonesia, Dubai,Bangladesh and Oman.
Monday, August 24, 2009
Chokdee to raise funds from MAI for expansion
Chokdee Dimsum Restaurant plans to grow domestically and venture abroad in the next three years with funds to be raised from the stock market.
Managing director Dheeraphop Siraprapathum said last week that the company was working with a financial adviser to prepare for listing on the Market for Alternative Investment (MAI).
According to the listing plan, it has already separated its business into three companies.
Chokdee International Food operates the central kitchen and distributes frozen dim sum to all branches nationwide.
Chokdee Dimsum Restaurant operates the dim sum restaurants.
And Chokdee International Franchise oversees its franchised restaurants.
Listing on the MAI would be the springboard for expansion, Dheeraphop said.
Domestically, Chokdee Restaurant would like to enter department stores and shopping centres, while it would like to penetrate overseas markets such as China.
"To have a restaurant in one shopping mall, we need at least Bt4 million. Meanwhile, if we would like to have a Chokdee Dimsum Restaurant overseas, we have to set up a central kitchen. Therefore, the investment will increase to Bt20 million per branch, which is too much for us. We need to mobilise funds from the bourse," he said.
The enterprise would grow rapidly after listing on the MAI, he said.
Since its establishment in 2000, it has multiplied to 18 branches, of which nine operate around the clock.
"We are the first dim sum restaurant in Thailand that sets reasonable prices, which everyone can afford and is open for 24 hours. This is our strength. We can utilise every resource such as employees for the most effective results to gain more money. And night-time is a good period for making money," he said.
The company plans to increase its coverage by six branches this year, of which three have already been created by franchising both in Bangkok and upcountry.
Managing director Dheeraphop Siraprapathum said last week that the company was working with a financial adviser to prepare for listing on the Market for Alternative Investment (MAI).
According to the listing plan, it has already separated its business into three companies.
Chokdee International Food operates the central kitchen and distributes frozen dim sum to all branches nationwide.
Chokdee Dimsum Restaurant operates the dim sum restaurants.
And Chokdee International Franchise oversees its franchised restaurants.
Listing on the MAI would be the springboard for expansion, Dheeraphop said.
Domestically, Chokdee Restaurant would like to enter department stores and shopping centres, while it would like to penetrate overseas markets such as China.
"To have a restaurant in one shopping mall, we need at least Bt4 million. Meanwhile, if we would like to have a Chokdee Dimsum Restaurant overseas, we have to set up a central kitchen. Therefore, the investment will increase to Bt20 million per branch, which is too much for us. We need to mobilise funds from the bourse," he said.
The enterprise would grow rapidly after listing on the MAI, he said.
Since its establishment in 2000, it has multiplied to 18 branches, of which nine operate around the clock.
"We are the first dim sum restaurant in Thailand that sets reasonable prices, which everyone can afford and is open for 24 hours. This is our strength. We can utilise every resource such as employees for the most effective results to gain more money. And night-time is a good period for making money," he said.
The company plans to increase its coverage by six branches this year, of which three have already been created by franchising both in Bangkok and upcountry.
Thursday, August 20, 2009
INDEX LIVING MALL ENTERS MIDEAST
Retail is Detail, the first foreign franchisee of Thailand's Index Living Mall, has revealed plans to spend US$40 million to $50 million (Bt1.37 billion to Bt1.71 billion) to open 10 Index Living Mall stores in all the major markets of the Middle East within three to five years.
Last week, the company opened its first 4,645-square-metre Index Living Mall outlet in Dubai Mall, the largest shopping complex in the United Arab Emirates' most populous city. The shop, which cost $5 million, carries more than 3,000 items of home-finishing products, of which 70 per cent are home accessories and the rest furniture.
The store employs 41 staff, including 38 Thais.
Index Living Mall is Thailand's largest home-retail chain, with 17 stores and combined retail space of 186,000 square metres.
Retail is Detail director Sanveer Gill said his company was confident the flagship Index Living Mall outlet in Dubai would break even within a year.
He said the company planned to open 10 Index Living Mall stores in many high-potential Middle East markets, including Abu Dhabi, Qatar, Bahrain and Saudi Arabia. Retail is Detail's parent company, Gill Capital, is also planning to open Index Living Mall outlets in Singapore and Malaysia.
"We are looking to open as many Index Living Mall stores as possible in a stand-alone format. They will have large retail spaces of more than 100,000 square feet [9,300 square metres] and will have store and warehouse altogether in one place," Gill said.
Index Living Mall executive director Kijja Patamasatayasonthi said the Thai company had also been approached by investors in Austria and India, wanting to become franchisees and open Index Living Mall stores in their markets.
"Our franchisee [Retail is Detail] has been offered huge retail space of 7,800 square metres by a mall developer in Bahrain. Another developer in Abu Dhabi has offered more than 10,000 square metres of retail space for an Index Living Mall in its shopping complex. This is because they believe Index Living Mall can be an attractive magnet for their shopping malls," Kijja said.
Gill said Dubai received 30 million tourists a year and was a perfect place for Index Living Mall to be seen.
"Despite the recession, which causes the crash of banks and real-estate industries, the purchasing power of people in Dubai is still there, because they produce oil and natural gas. They still have money to spend," Gill said, adding that 85 per cent of visitors to Index Living Mall in Dubai Mall bought something.
"During times of recession, people must spend more time at home. They also love to invest money for home improvement," he said.
Gill said 60,000-80,000 new houses and condominium units were delivered to owners in Dubai last year. The number has fallen 20-30 per cent this year.
"However, we believe the recession in Dubai will stabilise by the end of this year," he said.
Retail is Detail was formed six months ago as the investment arm of Singaporean-based Gill Capital to care for the group's retail expansions in the Middle East. The company has already opened eight retail stores in Dubai Mall, six of which are well-known franchise operations from markets around the world.
They are an Ethan Allen furniture store from the US, Index Living Mall from Thailand, a Gina ladies' shoe store from London, a Stella Luna ladies' shoe store from China, Vince Camuto ladies' shoes from the US and a Hershey candy and chocolate shop from the US. The company's own retail brands, which have also opened in Dubai Mall, are I Wanna Go Home furniture store and Candylicious candy and chocolate shop.
"We want to expand these retail brands to the rest of the Middle East," Gill said, adding that the company planned to open a new Index Living Mall outlet in Bahrain
or Abu Dhabi within nine to 12 months.
He said his company discovered Index Living Mall last August, when his father and mother visited Hua Hin on holiday. They had dinner in town, accidentally came across the Index Living Mall outlet and liked it very much.
"Index Living Mall made a good first impression, backed by strong visual merchandising, customer service and good product quality," Gill said.
Index Interfurn Group president Pisith Patamasatayasonthi said his company had already opened seven Index Living Mall outlets in Bangkok alone.
"We want to have 10 outlets serving all of Bangkok's major areas in the near future," he said.
In addition to a new Index Living Mall that will open at kilometre 5 of Bang Na-Trat Road this year, the company will spend |another Bt1.2 billion to open two new stores on Ratchaphruek and Ram-Indra roads.
Last week, the company opened its first 4,645-square-metre Index Living Mall outlet in Dubai Mall, the largest shopping complex in the United Arab Emirates' most populous city. The shop, which cost $5 million, carries more than 3,000 items of home-finishing products, of which 70 per cent are home accessories and the rest furniture.
The store employs 41 staff, including 38 Thais.
Index Living Mall is Thailand's largest home-retail chain, with 17 stores and combined retail space of 186,000 square metres.
Retail is Detail director Sanveer Gill said his company was confident the flagship Index Living Mall outlet in Dubai would break even within a year.
He said the company planned to open 10 Index Living Mall stores in many high-potential Middle East markets, including Abu Dhabi, Qatar, Bahrain and Saudi Arabia. Retail is Detail's parent company, Gill Capital, is also planning to open Index Living Mall outlets in Singapore and Malaysia.
"We are looking to open as many Index Living Mall stores as possible in a stand-alone format. They will have large retail spaces of more than 100,000 square feet [9,300 square metres] and will have store and warehouse altogether in one place," Gill said.
Index Living Mall executive director Kijja Patamasatayasonthi said the Thai company had also been approached by investors in Austria and India, wanting to become franchisees and open Index Living Mall stores in their markets.
"Our franchisee [Retail is Detail] has been offered huge retail space of 7,800 square metres by a mall developer in Bahrain. Another developer in Abu Dhabi has offered more than 10,000 square metres of retail space for an Index Living Mall in its shopping complex. This is because they believe Index Living Mall can be an attractive magnet for their shopping malls," Kijja said.
Gill said Dubai received 30 million tourists a year and was a perfect place for Index Living Mall to be seen.
"Despite the recession, which causes the crash of banks and real-estate industries, the purchasing power of people in Dubai is still there, because they produce oil and natural gas. They still have money to spend," Gill said, adding that 85 per cent of visitors to Index Living Mall in Dubai Mall bought something.
"During times of recession, people must spend more time at home. They also love to invest money for home improvement," he said.
Gill said 60,000-80,000 new houses and condominium units were delivered to owners in Dubai last year. The number has fallen 20-30 per cent this year.
"However, we believe the recession in Dubai will stabilise by the end of this year," he said.
Retail is Detail was formed six months ago as the investment arm of Singaporean-based Gill Capital to care for the group's retail expansions in the Middle East. The company has already opened eight retail stores in Dubai Mall, six of which are well-known franchise operations from markets around the world.
They are an Ethan Allen furniture store from the US, Index Living Mall from Thailand, a Gina ladies' shoe store from London, a Stella Luna ladies' shoe store from China, Vince Camuto ladies' shoes from the US and a Hershey candy and chocolate shop from the US. The company's own retail brands, which have also opened in Dubai Mall, are I Wanna Go Home furniture store and Candylicious candy and chocolate shop.
"We want to expand these retail brands to the rest of the Middle East," Gill said, adding that the company planned to open a new Index Living Mall outlet in Bahrain
or Abu Dhabi within nine to 12 months.
He said his company discovered Index Living Mall last August, when his father and mother visited Hua Hin on holiday. They had dinner in town, accidentally came across the Index Living Mall outlet and liked it very much.
"Index Living Mall made a good first impression, backed by strong visual merchandising, customer service and good product quality," Gill said.
Index Interfurn Group president Pisith Patamasatayasonthi said his company had already opened seven Index Living Mall outlets in Bangkok alone.
"We want to have 10 outlets serving all of Bangkok's major areas in the near future," he said.
In addition to a new Index Living Mall that will open at kilometre 5 of Bang Na-Trat Road this year, the company will spend |another Bt1.2 billion to open two new stores on Ratchaphruek and Ram-Indra roads.
FRANCHISE DEAL FOR KAZOKUTEI RESTAURANTS
The Oishi Group, a local leader in Japanese food and beverage, last week signed a five-year franchise contract to introduce Kazokutei soba- and udon-noodle restaurants in Thailand.The company also has right to renew the franchise for another five years after the contract expires.
Group managing director Tan Passakornatee said the introduction of Kazokutei would serve the great potential of Thailand's noodle culture and was in line with the company's strategy of opening up new market segments following the great success of its ramen-noodle restaurants.
Kazokutei is the No-1 soba and udon restaurant in Japan. The company plans to open as many as 20 in Thailand within five years.
Tan said his company would spend Bt50 million to open five restaurants in the first year. Locations in central Bangkok frequented by Japanese, such as Sukhumvit Soi 39, will be sought. Each Kazokutei restaurant will employ 20-30 staff.
The opening of new franchised restaurants will help it make better use of its new noodle machine being installed at the company's factory in the Navanakorn Industrial Estate in Pathum Thani province.
Tan said Thailand was among the first international markets for Kazokutei franchises.
In addition to the Kingdom, Kazokutei has also signed franchise agreements with local investors in China and Singapore.
Tan said the Oishi Group expected this year's sales to increase 20 per cent to Bt7.2 billion.
Of that, 45 per cent will be from its Japanese restaurants and 55 per cent from its branded beverages: Oishi ready-to-drink green tea, Amino OK functional drinks and Coffio ready-to-drink coffee.
In addition to managing the Oishi Group, Tan used more than Bt400 million of his own money to develop two hotels in Prachuap Khiri Khan's Pran Buri district: the Moroccan-style Villa Maroc and the Ali Baba boutique hotel.
"My idea was not to build hotels, but rather architectural art on the beach, to stimulate tourism in the area," said Tan.
Tan will also develop a new community mall on 9 rai of land on Nimmanahaeminda Road in Chiang Mai, in conjunction with Siam Future Development.
Another project is an art centre on 5 rai of land, also in Chiang Mai, in cooperation with the Thailand Creative & Design Centre and Thailand Knowledge Park.
Group managing director Tan Passakornatee said the introduction of Kazokutei would serve the great potential of Thailand's noodle culture and was in line with the company's strategy of opening up new market segments following the great success of its ramen-noodle restaurants.
Kazokutei is the No-1 soba and udon restaurant in Japan. The company plans to open as many as 20 in Thailand within five years.
Tan said his company would spend Bt50 million to open five restaurants in the first year. Locations in central Bangkok frequented by Japanese, such as Sukhumvit Soi 39, will be sought. Each Kazokutei restaurant will employ 20-30 staff.
The opening of new franchised restaurants will help it make better use of its new noodle machine being installed at the company's factory in the Navanakorn Industrial Estate in Pathum Thani province.
Tan said Thailand was among the first international markets for Kazokutei franchises.
In addition to the Kingdom, Kazokutei has also signed franchise agreements with local investors in China and Singapore.
Tan said the Oishi Group expected this year's sales to increase 20 per cent to Bt7.2 billion.
Of that, 45 per cent will be from its Japanese restaurants and 55 per cent from its branded beverages: Oishi ready-to-drink green tea, Amino OK functional drinks and Coffio ready-to-drink coffee.
In addition to managing the Oishi Group, Tan used more than Bt400 million of his own money to develop two hotels in Prachuap Khiri Khan's Pran Buri district: the Moroccan-style Villa Maroc and the Ali Baba boutique hotel.
"My idea was not to build hotels, but rather architectural art on the beach, to stimulate tourism in the area," said Tan.
Tan will also develop a new community mall on 9 rai of land on Nimmanahaeminda Road in Chiang Mai, in conjunction with Siam Future Development.
Another project is an art centre on 5 rai of land, also in Chiang Mai, in cooperation with the Thailand Creative & Design Centre and Thailand Knowledge Park.
NEO SUKI TO OPEN CHINA FRANCHISE
Neo Suki Thai Restaurants has returned to the Chinese market with a plan to have three franchises up and running in Guangzhou next year.
The company recently signed a Memorandum of Understanding (Mou) with Feed Master Group (China) to be its franchisee in the country, managing director Skon Kubpiyajanya said last week.
Neo Suki will co-invest with Feed Master Group in each Neo Suki restaurant, contributing 20 to 25 per cent. It will receive a share of the revenue from each restaurant equivalent to the ivestment stake, as well as a franchise fee.
This is the first time that Feed Master Group, whose primary business is manufacturing animal feed, has diversified into another food business. The firm approached Neo Suki a few months ago about buying franchises.
Skon said he had a chance to talk with Feed Master executives as part of a delegation accompanying Prime Minister Abhisit Vejjajiva on a visit to Guangzhou last month, and clinched the deal during the trip. Abhisit was a guest of honour at the MoU signing ceremony at Impact Muang Thong Thani last week.
"Our partner is looking for a location for the first Neo Suki restaurant, and is hoping to lease space in the Grand Ville shopping mall in the centre of Guangzhou. The first branch, which will likely require an investment budget of 2 million yuan [Bt10 million], is expected to open by the end of this year. We want to have three branches open by the end of next year," he said.
Skon said Guangzhou was a good city in which to launch its suki restaurants as it will host the Asian Games next year. It is also major tourist destination whose service businesses, including restaurants, have enjoyed strong growth, he said.
Neo Suki opened a branch in Bejing in 2005 - the first suki restaurant in China - with a local partner. The venture failed, however, and Neo Suki withdrew its investment after six months.
"I've learned that it is not easy to get into the restaurant business in China, which is quite complicated for foreign investors. The first time, we co-invested with a local partner. Experience has shown me that it would be better to expand using the franchise model and let the local partner, who knows Chinese culture well, take full responsibility for operating the restaurant. I'm absolutely confident we won't fail this time," he said.
The firm plans to expand the Neo Suki chain to Xiamen and other tourism destinations in mainland China, Skon said.
The company recently signed a Memorandum of Understanding (Mou) with Feed Master Group (China) to be its franchisee in the country, managing director Skon Kubpiyajanya said last week.
Neo Suki will co-invest with Feed Master Group in each Neo Suki restaurant, contributing 20 to 25 per cent. It will receive a share of the revenue from each restaurant equivalent to the ivestment stake, as well as a franchise fee.
This is the first time that Feed Master Group, whose primary business is manufacturing animal feed, has diversified into another food business. The firm approached Neo Suki a few months ago about buying franchises.
Skon said he had a chance to talk with Feed Master executives as part of a delegation accompanying Prime Minister Abhisit Vejjajiva on a visit to Guangzhou last month, and clinched the deal during the trip. Abhisit was a guest of honour at the MoU signing ceremony at Impact Muang Thong Thani last week.
"Our partner is looking for a location for the first Neo Suki restaurant, and is hoping to lease space in the Grand Ville shopping mall in the centre of Guangzhou. The first branch, which will likely require an investment budget of 2 million yuan [Bt10 million], is expected to open by the end of this year. We want to have three branches open by the end of next year," he said.
Skon said Guangzhou was a good city in which to launch its suki restaurants as it will host the Asian Games next year. It is also major tourist destination whose service businesses, including restaurants, have enjoyed strong growth, he said.
Neo Suki opened a branch in Bejing in 2005 - the first suki restaurant in China - with a local partner. The venture failed, however, and Neo Suki withdrew its investment after six months.
"I've learned that it is not easy to get into the restaurant business in China, which is quite complicated for foreign investors. The first time, we co-invested with a local partner. Experience has shown me that it would be better to expand using the franchise model and let the local partner, who knows Chinese culture well, take full responsibility for operating the restaurant. I'm absolutely confident we won't fail this time," he said.
The firm plans to expand the Neo Suki chain to Xiamen and other tourism destinations in mainland China, Skon said.
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