Franchising

An Expert's View about Franchising in Mexico

Posted on: 30 Jun 2012

The franchise sector in Mexico grew between 9 - 12% in 2011, continuing to be one of the most important sectors in the country´s economic growth.

Franchising A Top Export Prospect for Mexico June 2012 Country Number of Brands Points of Sale Number of Employees United States Over 2,500 825,000 18 million Brazil 1,855 86,365 Over 770,000 France 1,477 58,531 335,700 Mexico Over 1,200 70,000 800,000 * Source: Feher&Feher Consulting Firm Overview The franchise sector in Mexico grew between 9 - 12% in 2011, continuing to be one of the most important sectors in the country´s economic growth. Conservative estimates indicate that this sector will grow at least 8 percent in 2012. Mexico is among the top ten nations in franchise development, due to the number of concepts operating in the market, strong legal framework as well as support from the government to continue developing new business opportunities. According to the Mexican Franchise Association, Mexico has approximately 1,200 franchise concepts, including international brands, mainly from the United States. About 80 percent of the franchises operating in the country are Mexican brands, 10 percent are from the U.S., 3% from Spain, and the other 7% of the market is shared by Canada, Central & South America and Europe. Firms from other Latin American countries are finding Mexico as their best option to expand internationally, and are focused on exploring secondary markets. The Mexican Franchise Association (AMF) has worked very closely with the Ministry of the Economy to develop the National Franchise Program (PNF). This program promotes the development of franchise concepts in Mexico with the goal of increasing employment and investment in the country. It provides opportunities to Mexican entrepreneurs to create or re- engineer a franchise concept, which not only supports growth and modernization of existing franchises, but provides support to investors looking to acquire international franchise concepts. Top S pects chis 2 U Export Pros in Mexico 2012: Fran ing Due to the importance of the franchise industry to the Mexican economy, both in terms of job creation and percentage of GDP, the Mexican government has made numerous legislative changes to strengthen the legal framework for franchises. In 2006, the Mexican Congress amended the Law of Industrial Property to provide a clearer definition of a franchise, mandate requirements for franchise agreements, and provide standards for pre-sale franchise disclosures. These amendments help to protect franchisees who report abuse from franchisors when executing or terminating agreements. This has allowed further expansion of the franchise sector as the previous lack of regulation limited growth. Franchising in Mexico, as in any other country, requires a long-term commitment. U.S. franchisors must commit human and financial resources, patience and time to make their concept succeed in the Mexican market. U.S. franchises must be aware that since the Mexican market is dominated by local franchises, a requirement for a successful franchise concept in Mexico is to adapt, or customize, the concept and characteristics to Mexican tastes. Best Products/Services Although the food/restaurant sector in the franchise industry in Mexico has always been a very popular business model, the services sub-sector is rapidly growing. Services such as entertainment concepts for children and personal and home care services, have a great potential in the Mexican market. Franchise Concepts in Mexico 341 131 89 82 47 40 41 41 43 34 28 28 19 21 15 6 7 *Source: Asociación Mexicana de Franquicias Back to top Top ort ex 3 US Exp Prospects in M ico 2012: Franchising Opportunities Mexico is a diverse country that offers excellent business opportunities especially for U.S. franchise concepts due to the commercial ties between the countries and the recognition and acceptance of U.S. brands by the Mexican population. Low cost investment franchise concepts will be in demand in the next few years, as investors will be looking for innovative concepts to open in secondary markets. Resources • Asociación Mexicana de Franquicias: www.franquiciasdemexico.org • Feria Internacional de Franquicias: www.fif.com.mx • Programa Nacional de Franquicias: www.franquicia.org.mx For More Information Please contact Martha Sánchez, Commercial Specialist for the franchising sector at the U.S. Commercial Service in Mexico at Martha.Sanchez@trade.gov or (011-52-55) 5140-2621. You can also visit our website at http://www.export.gov/mexico. The U.S. Commercial Service — Your Global Business Partner With its network of offices across the United States and in more than 70 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://www.export.gov/eac. Disclaimer: The information provided in this report is intended to be of assistance to U.S. exporters. While we make every effort to ensure its accuracy, neither the United States government nor any of its employees make any representation as to the accuracy or completeness of information in this or any other United States government document. Readers are advised to independently verify any information prior to reliance thereon. The information provided in this report does not constitute legal advice. The Commercial Service reference to or inclusion of material by a non-U.S. Government entity in this document is for informational purposes only and does not constitute an endorsement by the Commercial Service of the entity, its materials, or its products or services International copyright, U.S. Department of Commerce, 2012. All rights reserved outside of the United States.
Posted: 30 June 2012

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