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Franchises
are a business structure that has over 30 years in Mexico, and many are interested in investing in one, but there are a few things you should know before you make a decision.
How do franchises work?
A legal entity or individual – known as the franchisor – holding the rights to a brand allows another – the franchisee – to use said brand although for a limited and specified amount of time.
The franchisor provides the marketing and management plans, financial assistance, localization, training….the whole deal, and helps the franchisee establish its business.
Should I invest in a franchise?
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According to Héctor Alcázar , from Grupo Alcázar & Co., experts on the subject, says it's a good idea to invest in a franchise since the brand is already known to the market.
That is, the brand has already been “out there” for a while and you don't have to start from scratch to promote your business.
Franchises or something else?
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Alcázar explains during an interview that there are some models called business opportunities or micro-franchises. These also allow you to use the brand and give you pointers on location, size, advertisement, and more, similarly to a franchise structure.
However, one of the key differences is that some give you the opportunity to offer other products, which doesn't happen with franchises – where you have to follow quality and product standards and acquire your products with specific vendors and suppliers. That is, you have to follow the rules of the franchisor to a tee.
That is, if you set up a micro-franchise of donuts, you might also be able to sell coffee, sweets, bread, whatever, yet under a franchise contract, this wouldn't be possible.
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“It's a matter of doing your research and not mixing up business opportunities with franchises; some advertise as franchises but they aren't.”
Am I a candidate to invest in a franchise?
Even though franchises have each their own profiles, those who are unable to adhere to a set of rules definitely don't have a good profile for running a franchise, claims Alcázar.
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“If you like to innovate, propose, generate ideas, you might feel frustrated because the franchise structure doesn't allow to change the rules, you have to follow the model 100%.”
Now, if you have some money saved and you're still thinking on investing in a franchise, check out might want to check out the top ten of most affordable franchises and their total investment, according to Grupo Alcázar & Company:
Star Price (gifts and novelties) – MXN$290,000
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Madacos (beverages and snacks) – MXN$ 308, 225
Arréglalo (clothes mending and shoe repairs) – MXN$ 350, 000
Quick Liss (beauty salons) – MXN$ 395, 000
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Natur house (specialist care) – MXN$ 430,000
Ser Hogar System (human resources/security) – MXN$ 471,250
Yafah (hair removal centers) – MXN$ 481,953
Delichurros (coffee shop) - MXN$ 527,800
Beleki (bakery and cake shop) – from MXN$ 406,000 up to MXN$ 750,000
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