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Franchises represent 4% of Mexico’s GDP

Franchises in Mexico are responsible for around 4% of the national GDP with more than 90,000 points of sale, according to data from the Mexican Franchise Association (AMF).

This industry also has more than 1,500 franchise concepts in Mexico.

Among the most important franchises are: McDonald’s, Pemex, Starbucks, Subway, KFC, Pizza Hut, Farmacias del Ahorro, Domino’s Pizza, Burger King, Steren, Benedetti’s, Dormimundo, Café Punta del Cielo, Devlyn, El Fogoncito, Sushi Itto and Prendamex.

Around 85% of the franchises operating in the country are Mexican brands, 10% are from the United States and the remaining percentage is shared by brands from Europe and Latin America.

In general, the U.S. Department of Commerce considers the Mexican market to be mature and competitive, but also very receptive to the franchise model.

Franchising has experienced steady growth in recent years, but this expansion has slowed due to the Covid-19 pandemic.

According to the Department of Commerce, U.S. franchise concepts are well regarded in the Mexican market due to brand familiarity, as well as the strong relationship between the two countries.

Franchises

Despite the pandemic that impacted the sector, according to experts, in 2021 the franchise point of sale in the country grew by about 5 percent.

About 2 percent of the total existing franchise outlets closed in 2020, but most franchise concepts continued to operate, making changes to their business models, the Commerce Department said.

The AMF has been working with the private sector to help franchisors recover from this downturn and adapt to the post-pandemic reality.

This includes incorporating technology and changing the design of spaces to comply with new health regulations.

Industry experts expect the franchise sector to have a slow recovery with minimal growth for the remainder of 2022.

With more than 30 years in the market, AMF’s main objective is to promote and develop franchising in Mexico, as well as support regulations and develop programs with the public and private sectors to promote the industry.

 

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