The food and beverage sector accounts for 35% of the Mexican franchise market, followed by retail, personal care services, healthcare, education and business consulting, according to a report by the U.S. Department of Commerce (USDOC).

The franchise model in Mexico has been particularly successful for concepts that do not require high investment fees.

Concepts with investment fees ranging from $50,000 to $250,000 have more opportunities to grow in the market than models with high fees.

In 2020, some franchise companies developed crowdfunding programs to attract smaller investors and continue their operations in the market.

USDOC refers that, in the last couple of years, 10 concepts in different industry sectors related to franchising have successfully achieved their expansion plans through crowdfunding, and experts predict that more local and international brands will adopt this model to finance their growth.

Traditionally, large cities such as Mexico City, Monterrey and Guadalajara have been the dominant options to position a new franchise concept, comprising around 70% of the total number of franchises in the country.

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However, the development of franchise business opportunities has also been successful in smaller cities where the local population is looking for new products and brands.

Franchising in Mexico, as in any other country, requires a long-term commitment.

U.S. franchisors need to invest both time and money to succeed in Mexico. They must develop a detailed business plan, including market research, to determine the best growth strategy. It is also crucial to remain flexible and adapt to the local culture.

Given Mexico’s size and diversity, awarding a single master franchise contract for the entire country can be challenging.

Instead, the U.S. Department of Commerce (USDOC) suggests dividing the market geographically. Franchisors should consider granting at least three regional rights covering northern, western, and central Mexico.

To ensure success, franchisors must support their master or regional franchisees throughout the partnership.

One common issue reported by franchisees is a lack of support after signing the agreement.

For long-term success, franchisors should maintain close communication, provide regular training, and visit their partners in Mexico frequently.