The 15 best franchises in Mexico

Regionalize the concept and grant master franchises will be the formula of national signatures to deal with large international brands, which take them several decades of advantage with the ‘secret recipe’ of the business model.

As every year, in two014 the franchise sector in Mexico reported a double digit growth.According to figures from the Mexican Franchise Association (AMF), the increase was 10% in the year.

In this context, Forbes presents its list of the fifteen franchise brands that lead the sector for the power of its brands and the number of establishments operated.

The report groups franchises with greater presence in Mexico and are ordered in accordance with the largest number of establishments that are operating in national territory.

Among the franchise set that appear in the Forbes report, eight of them described for the annual report of the 100 most valuable global brands of two0fifteen, prepared by Millward Brown.

The report of the American consultant reveals that the top 10 of the fast food brands worldwide added 179.3 billion dollars (MDD);The seven franchises of those 10 that are in our report contribute 89.8% of that amount.

In Millward Brown's report, McDonald’s, Starbucks, Subway, KFC, Pizza Hut, Domino’s Pizza and Burger King are positioned;This group reported a growth in the value of its 7 brands.7% on average.

The eighth brand is 7-eleven, which appears in the top two0 of retail companies.The seal of this convenience chain has a value of 7,49two mdd.From this caliber are the brands with which national franchise brands such as Pemex,Steren, Savings Pharmacies, Benedetti’s andDreamy must compete, which also appear in this report.

The attractive "girls"

Together, the fifteen firms of the list have 18,900 establishments in national territory, about two5% of the total franchise units, and generate just over two78,000 jobs, 37% of the total sector, registered by the AMF in Mexico during the last year.

Franchise brands of this report have the exclusive rights to operate in Mexico, through a “master franchise” contract.In some cases, companies that handle this type of contracts come to subfranchiciar, but usually the objective is to have the exploitation of the signatures for which they have paid the rights.

Big trademark

For many investors, the franchise sector remains a magnet to find an independent business option and the "big brands" mean a strong attraction for many of them.

In Mexico, there are just over 1,two00 franchise brands, according to AMF figures;74% are of national origin.However, very few Mexican franchises can boast of having the market value and the presence at the local and world level as their peers in the United States have, turned into the most coveted franchise brands in the world.

In many cases, large brands are not only inaccessible to a single person, due to the high cost that can mean the acquisition of the rights of this type of contracts, but mostly the operation was already granted to business groups that guarantee themThe operation and efficiency of the master franchise.

Alsea is an example of that master scheme: the Mexican controller has the exploitation rights of 14 franchise brands.

Jude García, general director of the MFV Group, mentions that the 50 Top franchises in Mexico are looking for regional operators, because, he points out, it offers the certainty of operation and an organic growth of the franchisee brand.

"The purchase of a master franchise requires large amounts of capital investment and generates the commitment to position the brand in many places, while in a short time," says José Manuel González leader of retail from the KPMG consultancy.

Today, brands like McDonald’s, Burger King, Domino’s Pizza, Kentucky Fried Chickn, 7-Eleven and Starbucks, among others, are no longer an option for a natural person that has a capital and wishes to acquire any of them.

"Although some franchises of national origin already begin to operate under regional contracts, they still do not cover the entire national territory and in some cases they are only granted by areas," says Jude García.

The teachers of the sector

Just six of the fifteen franchise brands of the Forbes listing are of Mexican origin, the rest are from the United States.The experience makes the difference and brands like 7-eleven and McDonald’s, for example, have 87 and 69 years respectively of having been founded.

During two014, both firms together invoiced two35,430 million pesos and are present in more than 130 countries.Your strategy: Grant master franchises.

There are Mexican groups that operate and manage different franchise brands, whether national or foreign, such as IConn, a regiomontana company that has the exploitation rights of the 7-eleven brand.

At present, this 89-year-old regiomontan group manages 1,700 stores in national territory, and like other groups, they also explode three other brands: more+ grocery cellars, merchandise mini super stores and fifteen0 Pemex franchises under thePetro-7 sub-win, distributed in six entities of the Republic.

Pemex franchises are another good example of franchise administrative groups;Grupo Hidrosina, Gaso Plus, Combu Express and EGESA, among others, are the main operating companies of the brand of the gasoline vending parastatal.

It seems a fact that the strength of the great franchise brands is based on the exclusive contracts that they handle with the master franchisor.

This fact makes competition more complicated for many of the small brands that are born every year and aspire to develop in Mexico.

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In fact, most of the franchises of foreign origin, which operate in Mexico under the concept of teachers, are operated by Mexican investors, who have also taken and developed in Central and South America.

It is evident that the great global franchise brands have sought to regionalize their markets, since it is much easierefficient operation for both parties.

Even so, the specialist of the KPMG consultancy points out that the franchise market in the country is not actually determined by large brands, even when it is recognized that it is these that dominate some of the most profitable niches in the franchise sector in Mexico.

Regional replica

Although around 100 new brands are added every year to franchise in Mexico, few are those that consolidate their brand and image in the market at national scale.

Undoubtedly, franchises that seek to develop their brand and take their way center focus their strategy on the granting of contracts by region or areas, since otherwise the success of the business could be extended for a long time.

Actually, in Mexico there are few franchise brands with a premium brand.Steren,Dreamy, Pharmacies of Savings, Café Punta del Cielo, Devlyn, El Fogoncito, Sushi Itto and Prenamex, to name a few, have managed to transfer the borders, but their presence outside the country, in the best of cases, only exceeds thetwo0 franchiseed establishments.

Kidzania is a separate case.Although it does not have a large volume of franchises, its presence covers 1two countries on four different continents.The strategy of this brand of Mexican origin and the nature of its turn - entertainment - led her to seek to consolidate her business concept in foreign markets.

Perhaps one of the main challenges of the franchise sector in Mexico is to transparent its annual operations and results.

The franchise mortality index, for example, is not a fact that the AMF to know each year.

In the United States, for example, most matrices owners of the franchise brand quote on the New York Stock Market.

In Mexico, most of the firms that become franchises were first family businesses and once they begin to franchise, few think about going out to the stock market, says Jude García.

The success of a franchise must focus on replicating a successful model, keeping quality levels in service and supplies to provide the products offered by the franchise, says the KPMG consultant.

However, Jude García affirms that some franchises have stopped advertising their brands and that carelessness has subtracted presence and competitiveness against the great global brands.

Even so, the sector still has potential to grow and the strategy will be to develop new markets in entities such as Querétaro, Guanajuato, Aguascalientes, San Luis Potosí and Puebla, where the purchasing power has risen and represents a new opportunity for national franchise brandsGarcia concludes.

These are the fifteen best franchises in Mexico:

1.PEMEX/AB1

two.7-Eleven/a

3.Savings Pharmacies/AB

4.Subway/a

5.Domino’s Pizza/A

6.McDonald’s/A

7.Starbucks Mexico

8.Burger King/A

9.Steren

10.Kentucky Fried Chickn/A

eleven.Dreamy

1two.CARL’S JR./AB

13.HUT/A PIZZA

14.Holiday Inn

fifteen.Benedetti’s/Ab