What to settle before signing a master distributor agreement in Thailand
Short answer: Beyond territory and minimum orders, pin down the things that are hard to change later: who holds the import licence and the product registration with the Thai FDA, who pays for and decides on marketing, whether store-level sales data comes back to the brand, and what happens to stock and registrations if the agreement ends. Agreements that skip these look fine at the start, then keep a brand tied to a distributor even when sales stall.
Under Section 15 of Thailand's Food Act B.E. 2522 (1979), importing food for sale requires a licence. In practice the licence and the product registration sit with a Thai company, usually the importer or distributor, not the brand owner abroad.
Eight points to write down
- Licence and registration holder. If you change distributor, how is the registration transferred or cancelled, and who bears the cost of refiling?
- Territory and channels. Convenience stores, modern trade and online together or separately? If the brand opens its own TikTok Shop, is that a breach?
- Exclusivity. What conditions come with exclusive rights?
- Minimums and what happens if they're missed. Measured on sell-in to the distributor or sell-out from stores?
- Marketing budget. Who pays, in what share, who approves, and how results are measured.
- Data back to the brand. Per-store sales, stock and returns, and how often.
- Trademark. Register the mark in Thailand in the brand's own name, not the distributor's.
- Termination. Notice period, who buys back remaining stock, and a transition so the product stays on shelf.
Why points 1 and 8 belong together
The government procedure page on info.go.th lists many kinds of changes to a food import licence: moving premises, changing names, changing operators. Changing the licensed legal entity itself is covered in specific cases such as legal mergers. If you plan to move to a new distributor that is a different company, assume a new filing may be needed and build that time into the agreement. The product may be off shelf in between.
The point that never gets settled: marketing money
The brand wants the distributor to spend; the distributor wants the brand to spend. Splitting the budget helps: one pot paid to the store (listing fees, promotion support) and one pot that creates demand (TikTok content). Agree who funds which, and measure both by sales per store per day in areas with stock.
Limits
- This is a business checklist, not legal advice. Have a Thai lawyer review the actual draft.
- Thai FDA procedures differ by product type (food, cosmetics and others). Check the rules for your category.
- There is no standard marketing-split ratio, so none is given here.
FAQ
Can a foreign brand hold the import licence itself? It needs a licensed legal entity in Thailand, so brands usually work through an importer or distributor, or set up a Thai company, which brings other legal requirements.
Should we grant exclusivity in year one? If you do, tie it to sell-out and include an exit if targets are missed.
Does Flowup work in this area? Flowup is a 7-Eleven growth company in Thailand and is expanding into brand master distribution. Details are on the services page.
Sources
- info.go.th, amending a food import licence (Thai): https://info.go.th/procedure/9a97a37f-5539-4cd3-8786-a287166aa5f2/view
- Thai FDA Food Division, food import premises guide (Thai): https://food.fda.moph.go.th/public-guide/category/permission-to-import-food-places
- A master distributor that also does marketing: https://www.flowupth.com/en/insights/master-distributor-with-marketing
Related guide: Getting Into 7-Eleven Thailand: How to Find an FMCG Distributor and Negotiate a Master Distributor Deal
Next step: Not sure where your product should start? Send the Flowup team your product and where it sells today, on LINE or by email.
What Flowup can do for you: Services · Contact Flowup · Insights