Franchise & Concesions

FRANCHISING/CONCESIONS
Tailor-made investment
By: Gustavo Cordero Rodriguez.
With the more than 1800 options on the market, its amounts
accessible investment, brand recognition, know-how
shared and its rapid recovery, the question is not whether
w or not to invest in franchises, but how to select the one that suits
to your profile.
Embarking on the adventure of running your own business carries risks related to both
consumer acceptance of your product or service, demand assessment, location and
supplier selection, among other factors; that's not counting your operational and
administrative ability as an investor.
Simply put, there are many pitfalls to overcome. However, there are business schemes
in which the risk is substantially reduced. One of them is franchises and/or concessions.
The Mexican marketing college a.c., defines a franchise/concession as "replicating an

existing and successful business concept through cloning the "procedures", in
order to repeat the commercial success of the original company, the franchise is a more
structured derivation of the brand grant".
The company that grants the brand, procedures and provides technical assistance is the
franchise, while the person – or company – who acquires the concept is the franchisee,
and in the case of the concession is the concessionaire and the concessionaire acquires it.
The right to use the mark usually has two costs: the right of use and royalties. The latter
are handled as a percentage of the sales obtained in a certain period.
As for the investment required, there are options for everyone: you can become a
franchisee/dealer with investment amounts ranging from $200,000 pesos to more than
$5 million.
Thus, the interest in investing in these business models has not only not been exhausted,
but a growing number of options with the most diverse products and services emerge.
The franchise sector continues to glimpse with growth and strong job creation.
In addition, our country is making progress in regulating the operation of
franchises/concessions.
According to Alcazar & Co., Mexico is considered a model country, and in March 2020
the International Congress of Franchise Associations from around the world will be held
in our territory. This exemplifies the importance and vitality of this business format.
Secured market
What makes franchises/concessions around the world attractive is its proven and
functional scheme, and the rapid recovery of the investment: from one to five years,
provided that the acquirer sticks to the manual of procedures indicated by the
franchise/concession, where the way the business is operated is discussed in detail.
Franchises have transcended even the transnational level. Today it is common to travel
to any country in America, Europe and Asia and find a significant number of
commercial establishments managed with the same brand and concept.
Franchises/concessions all win, because while the establishments do not necessarily

belong to the original company, it gains in brand positioning and adds value by sharing
information from your company.
The franchisee/concessionaire, for its part, acquires a business that already has
significant market penetration and an insured demand for its products or services, thus
ensuring the return on investment in a shorter period.
The success of the franchises has been evident, especially over the past decade. In
Mexico, at the beginning of 2004, more than 500 were counted, and of these, more than
half are of Mexican origin, today they add up to more than 1,800.
However, investing in franchises does not ensure success per se. Effort and dedication
from franchisees/dealers is required. In this sense, the school mediates: "We would not
want to say that acquiring a franchise ensures success or that one will become a
millionaire overnight, but what is true is that their chances of error or failure are
minimized."
Are they for all franchises/concessions?
No, although a specific profile of the investor who is willing to venture into a franchise
cannot be outlined, Gallastegui Armella and Associates states: "The profile required to
invest is closely linked to the type of business that interests the potential franchisee to
develop.
It should be remembered that there are more than 65 business turns and that some need
experience and others do not. But, if we could break down an investor's common trunk
into franchises, I'd say they're enterprising people who are willing to follow the
guidelines and rules of the game, who like to work as a team, because they'll have to
follow the guidelines set by the operating manuals.
Selecting the appropriate Franchise.
Purchasing a franchise/concession is not like going to the supermarket and putting in the
cart the most beautiful ones for your brand, fame or recognition. Selecting a franchise
requires very clear investor tastes, characteristics and personal skills.
The ones currently on offer are the same in the food and restaurant sectors as in services,
clothing, construction and real estate, among many others.
Perhaps your investor profile is not to have a restaurant, because you don't like or care
about everything related to food, but advice or teaching, to cite an example.
In this case, it would be a big mistake to choose a restaurant franchise just because of
your fame or friend recommendation: the investment might not be productive.
Finally, personally and based on my experience as a business coach, "I do not

recommend choosing the franchise/concession solely for the renown or success it has
had. The personality of each of us must be considered. Not all franchises/concessions
are good or correct for everyone.
We must know each other perfectly and do a very good research before investing, not
let ourselves be carried away only by advertising or supposed successes."
Tips for choosing a franchise/concession:

1. Ask existing franchisees if everything their franchising offered them was
fulfilled.
2. Select the business spin you not only like, but even be passionate about. Think
you'll probably stay in it for a long time.
3. If you're interested in growing up and staying with a single point of sale, it's
important to look into the franchise policies of your interest in this regard. Not
all allow the franchisee to grow through the operation of a greater number of
points of sale.
4. Someone who is interested in the franchise system, but who also likes to
innovate, should ask if the franchisee accepts participation in product
improvement or procedures,
In conclusion, franchisees/concessions do not allow the franchisee/dealer to act on its

own account, as the product or service must be exactly the same – in characteristics and
quality – in each of the chain stores or outlets, whether of the original company or
franchisees/concessions.
Any modification by the franchisee/dealer would be sufficient to break the

franchise/concession business scheme, and the franchising party would have every right
to withdraw the trademark license to protect its image and prestige in the market.
So, if you're not willing to stick to processes and guidelines already drawn up with the
goal of participating in the benefits of a proven business, franchises/concessions aren't
your choice, no less successful.
Choice is an option, success is a decision.

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FRANCHISING/CONCESIONS

The Mexican marketing college a.c., defines a franchise/concession as "replicating an

Franchises/concessions all win, because while the establishments do not necessarily

Are they for all franchises/concessions?

Selecting the appropriate Franchise.

Finally, personally and based on my experience as a business coach, "I do not

Tips for choosing a franchise/concession:

In conclusion, franchisees/concessions do not allow the franchisee/dealer to act on its

Any modification by the franchisee/dealer would be sufficient to break the

Choice is an option, success is a decision.

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