Franchises: An Accessible and Successful Investment Model in Mexico

Entrepreneurs are constantly faced with pressure to create unique and innovative products or services, but on many occasions this mentality leads many of them to fail before the first year. However, starting from scratch is not always necessary to start a business. Franchises , for example, offer the opportunity to own a business under a model that has been proven and recognized by the public for years.

In the country franchises of all kinds are obtained, from restaurants, gas stations, gyms, to courier services. And as a whole, they have a relevant weight in the national economy. According to data from the Mexican Franchise Association , the 900 franchise brands that exist in Mexico contribute 4.2% of the national GDP; that is, 85,000 million pesos a year.

Furthermore, in 2019 the franchise sector in Mexico registered an average annual growth of 8%, which demonstrates the solvency of this business model in the country. This last piece of information is especially relevant when the panorama of entrepreneurship and the life expectancy of companies in the country are taken into account.

According to the Center for the Development of Business Competitiveness, 75% of Mexican SMEs fail during the first 2 years of existence . Among the most common reasons why this happens is the lack of sufficient income during the first two years of life, as well as the lack of clear indicators and objectives of the business, and / or lack of comprehensive planning.

The franchise business model offers a reliable solution to some of these problems, by transferring an operating model that includes details on planning, execution and performance evaluation, to products that have been tested before by thousands of similar businesses, that is, products that have survived. already to a process of “natural selection” of the market for years, and even decades, along with brand recognition and a solid advertising strategy.

Franchises offer a sense of confidence when a crisis occurs / Image:

Franchises offer a sense of confidence when a crisis occurs. At this time when the pandemic has put the world on hold and many businesses have had to close their attention to the public, franchises have remained resilient and focused on supporting their franchisees and the business, rapidly transforming to meet the new needs of consumers. . Some brands offer this stability with low investments, such as Subway, which has one of the lowest in the industry and also allows you to adapt the business in small spaces or non-traditional locations.

While the world recovers from the crisis that the coronavirus is leaving, franchises can become an ally for those Mexicans who seek to undertake in this new context, especially since the business allows them to access brands with experience in the market and with a consolidated image, recognized by millions of people around the world.

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