Franchise opportunity country by country in Latin America and the Caribbean

The following are a list of Latin American and Caribbean countries and their potential for franchising:

Puerto Rico

Even though Puerto Rico is considered part of the United States by the American government, it is a market that falls on most franchisors' international development departments.

For years, franchises have recorded their biggest sales volumes in this island with a population of three million. Until recently, Puerto Rico held records for achieving the number one volume for sales at retailers such as Sears, J.C. Penney's and The Home Depot. Even though it is a small market, it is consumer-driven.

Mexico

This country should continue to be one of the first choices for entry for any franchise concepts. Mexico, for many years, has been a franchise-friendly culture adapting to U.S. systems and way of conducting business. American., European and Latin American franchise concepts are flourishing.

For example, the Starbucks chain has been closing over 200 stores in the USA recently but has opened 285 stores in the last 6 years in Mexico alone.

This is due to the fact that rising middle class Mexicans are picking up on American trends.

Central America

This region has very Franchise-friendly cultures that are growing at a fast pace with a large number of success stories. Try to focus on El Salvador, Guatemala, Honduras and Panama as initial entry-level markets, with Costa Rica, Nicaragua and Belize to follow after.

Many franchises give development rights and treat these countries as one region.

Brazil

The largest market in Latin America continues to be an attractive destination for franchise development. The real estate values and the success of established Brazilian franchise concepts, make it a challenge for new entries in the market.

Do not let this become a deterrent as there are 20 cities with populations each exceeding one million therefore plenty of opportunities to pursue.

Brazil continues to be the lure of the Americas. Please note that there are franchise regulations in this market.

Chile

This country is considered to be the secret pearl of Latin America. It is a very attractive market thanks to its steady economic growth, safe legal and business climate that accounts for the continued success in franchise expansion. Because of the conservative nature of the local entrepreneurs, franchise companies should be patient in their franchise development objectives.

Peru

In 2008, the Peruvian economy grew 9%, the largest growth rate in all of South Americatherefore becoming a business destination. This is an exciting time for this country and opportunities are to be pursued.

Argentina

Even though Argentina continues to recover from its last financial collapse at record-growth levels, it is still considered by most to be a fragile market. Continued price-control measures and the rise in tourism are very positive indicators for investments.

Uruguay

In the past, when a franchise was awarded to someone in Argentina, this small country was included as part of the contract because of the size of the market and the dependence on Argentina for the majority of their exports.

Uruguay took a very different strategy when Argentina went into financial crisis by increasing their international exports, solidifying free trade agreements and developing a very favorable and relaxed business climate.

Colombia

In spite of their challenges with guerrilla warfare and the drug trade, Colombia continues to show economic growth. Largely populated areas still attract foreign investments but safety continues to be a major concern.  

Venezuela

This country is a declared communist state where the government is proceeding to seize private industry including the banking sector. With all of the uncertainties, it is recommended to stay away for now and focus on other markets in the region.

Ecuador and Bolivia

Leftist governments are firmly in power during this time of financial crisi. The poverty level rates are amongst the highest in the Americas.

The Caribbean

The Caribbean continues to be a very safe bet. These are very small markets, but with the amount of tourism and the high standard of living of the local consumer, it could be a good starting point for small franchisors. There are many success stories in franchise development in the Dominican Republic, Jamaica, the Bahamas and Trinidad and Tobago.

The Future

With a larger combined population than that of the United States (608 million), the region continues to be the wise choice for expansion for many international franchise concepts.

Content By MercaTrade.com

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