Market Overview
In the last five years the Mexican franchise sector has maintained constant growth of between 14 and 17 percent. In 2008, the World Franchise Council ranked Mexico as the 7th leading nation in franchise development due to market maturity, legal framework, support from the government, number of franchise concepts in the country, and certification programs.
The overall franchise industry in Mexico has proven to be one of the most important sectors for the country’s economic growth, generating over 600 thousand jobs and 55 thousand points of sale countrywide, and represents 6% of the total GDP.
Due to the economic downturn, the industry expects reduced growth during 2009 and 2010, specifically for concepts that require large investments and big operational requirements. Investors will be more cautious analyzing business opportunities, taking into consideration investment conditions, finance opportunities, and the franchisor’s commitment and support.
Best Products/Services
Food concepts (formal / fast food) continue to lead the industry, with QSR concepts and casual dining restaurants the most attractive concepts for Mexican investors.
However, there are many other sectors that are growing rapidly and successfully in the Mexican market. Education / entertainment services for children and personal care services (spas, beauty shops, health care centers) are considered as best prospects for the coming years.
Market Opportunities
Before entering the Mexican market, it is important to note the following:
· Type of Franchise model appropriate for Mexico
· Potential of the market, Product/Service acceptance
· Training / Support capabilities (Language, resources)
· U.S. concepts may not be as popular as in the United States for Mexican customers; be prepared to adapt your products/services to the Mexican culture.
Franchising in Mexico, as in any other country, requires a long-term commitment. The U.S. franchisor must commit human and financial resources, patience and time to make its 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.
Resources
Some useful resources in this sector include:
Asociación Mexicana de Franquicias
Feria Internacional de Franquicias
Market Research
Franchising Salon
According to consultants from International FranCorp, roughly 80 to 100 new franchises will be incorporated in Mexico in 2008, which represents a growth rate of approximately 17%. They also added “Mexico is the 10th best place for penetration through franchises in the world, with a measuring of 1 franchise for every 800 habitants”. Mexico City will be hosting the first edition of the Franchising Salon in the Banamex Center from June 4-6, 2008. Over 160 brands will be participating in the event. 95% of the franchises survived the economic crises, which is a telling sign of the strong market in Mexico for franchises, particularly American franchises. During the event, there will be approximately 12,000 potential investors. Exhibitors will also have the opportunity to promote their business on the following website both during and after the show www.franquicias.com Inbursa will also be participating in the exhibition. They offer financing in order to acquire the participating franchises, whose value goes from US$ 5,000- US$ 300,000.
Additional facts:
There are 750 franchising companies in Mexico
60,000 are franchising establishments by the end of the year 2006, by the
Franchising Association of Franchising
69% are national origin
31% is international
600,000 formal jobs are generated
The market for franchising in Mexico represents an incredible opportunity for US firms. Mexico has successfully grown at a positive rate for the last couple of years and the Franchising Salon event in June presents a good opportunity for US companies to develop contacts and to explore possible franchise opportunities. To obtain the full text of this report please contact us.
Latest Mexico Franchising Market Report
The franchise sector in Mexico has maintained a constant growth in the last five years between 14 and 17 percent. In 2007, the World Franchise Council ranked Mexico as the 7th leading nation in franchise development. Conservative estimates indicate that this sector will grow at least 12 percent in 2008.
Mexico is a big and diverse country that offers excellent business opportunities especially for U.S. Franchise concepts due to the commercial ties between both countries and the recognition and acceptance of U.S. brands by the Mexican population.
To obtain the full text of this report please contact us.
Automotive Franchises Analysis
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Further Information, Comments or Questions
For further information about the franchise industry in Mexico and the services provided to U.S. firms by the U.S. Commercial Service to access to these business opportunities, please contact:
Martha Sánchez (Mexico City)
Commercial Specialist
Tel: (011-52-55) 5140-2621
Fax: (011-52-55) 5566-1115
e-mail: Martha.Sanchez@mail.doc.gov
Manuel Velázquez (Monterrey)
Commercial Specialist
Tel: (011-52-81) 8343-4450 ext. 373
Fax: (011-42-81) 8342-5172
e-mail: manuel.velazquez@mail.doc.gov
Alicia Zayas (Guadalajara)
Commercial Specialist
Tel: (011-52-33) 3615-0980 ext. 102
Fax: (011-52-33) 3615-7665
e-mail: alicia.zayas@mail.doc.gov