Passing the Same-sex Marriage Bill & Unfair Trade Practices in Franchising

Welcome to Wissen & Co Newsletter

In this issue, we provide our clients, members of the Chamber of Commerce, and friends, with information regarding the passing of the Same-Sex Marriage Bill and a notice regarding the determination of unfair trade practices in franchising.

Passing the Same-sex Marriage Bill

On 27^th March 2024, Thailand’s House of Representatives (its lower house) passed the Act amending the Thai Civil and Commercial Code (“CCC”) (No. …) B.E. … (the “Amendment“) or the Same-sex Marriage Bill. The Amendment received resounding votes in favor, with 400 in support and 10 votes against. Passing the Same-sex Marriage Bill will make Thailand the first country in Southeast Asia to legalize same-sex marriage and the third country in Asia, following Taiwan in 2019 and Nepal in 2023.

The Amendment will amend a total of 74 sections in the CCC. These include changing the minimum age for marriage from 17 to 18 years, “First parents” as defined in the CCC to have rights and duties equal to fathers and mothers under the previous laws, and giving rights to all married couples regardless of gender in the same manner as husbands and wives under the CCC and other laws.

The draft has now been approved by the Senate (its upper house) at its first reading on 2 April 2024 and will go into its second and third readings. In the end, the final version will need to be endorsed by the King before announcing for enforcement, which can take several months. We will apprise you of any future developments in future Newsletters.

Assessment of Unfair Trade Practices in Franchising

Franchising is a long-established practice in Thailand. It is a well-founded concern of a franchisee that its business may be adversely affected if its franchisor licenses the same business to other franchisees within the same area or near vicinity, viewing it as an unfair trade practice under Section 57 of the Trade Competition Act B.E. 2560 (2017) (“TCA”).

For this reason, the regulator for unfair trade practices and monopolies, the Trade Competition Commission of Thailand (“TCCT”) has issued the Trade Competition Commission Notice on Guidelines for the Assessment of Unfair Trade Practices in Franchising, dated 30 October B.E. 2562 (2019) (the “Franchising Guidelines”) regulating the issue of franchising within the nearest vicinity. On 13 July (2021), the TCCT amended such regulations, specifically Article 4, by issuing Franchising Guidelines (No. 3).

The new guidelines require a franchisor to give an existing franchisee priority to be offered a franchise before licensing the same business to others within the “nearest vicinity” and to give an existing franchisee at least 30 days to respond unless the existing franchisee(s) has unsatisfactory performance less than the franchisor’s express criteria and after being notified of such unsatisfactory performance in advance.

The “nearest vicinity” will be considered by taking into consideration the demand for products or services in relevant geographical areas and competitive constraint(s).

As for the Area Development Franchising, which prohibits the franchisor from licensing the business to others within the nearest vicinity, the new guidelines state that the franchisor may grant the right to open a new branch to a suitable franchisee if there are reasonable business, marketing, or economic reasons to support the licensing.

Mr. Wichien Harnpraween
Managing Partner

wichien.h@wissenandco.com
Tel:+662 2592627 thru 9
Fax: +662 2592630