Argentinian Franchise Market
Interview with Sebastián A. García Menéndez, GARCÍA MENÉNDEZ ABOGADOS, Argentina
How did you get started as a franchise consultant?
Our people (and me particularly) has experience advising Franchising for more than 17 years, in a first instance in big law firms (we assisted Wendy´s for example) and then our firm became the legal advisor of Argentine Union of Franchising (UAF). We have strong experience in Franchising and other associative agreements (distribution, agency, ect.). We have advised international client in Argentina and also Argentine mutinationals (like Tenaris and Aspro) in their international expansion.
Who are your clients?
As indicated we have advised international client in Argentina and also Argentine mutinationals (like Tenaris and Aspro) in their international expansion. We assisted in Argentina clients like Juan Valdez (the Colombian international trademark of the Union of Coffee Manufacturers of Colombia) in their retail franchising coffee shops.
What are the current trends on the franchising market in your country?
There are certain international franchisors that came in the recent past years (like Starbucks) and some others that did not progress in the past but they are trying to enter again in the Argentine market (like Subway and Kentucky Fried Chicken).
Also, there are several local franchisors that are expending internationally like Café Martínez and Bonafide (coffee shop) Pronto Wash (Mobile car wash) , Havanna (Argentine sweets), Mimo&Co, Kevinsgton , La Martina , Rapsodia, Las Pepas, and Akiabara (clothes), El Noble (Argentine food), Freddo and Chungo (artisanal Ice creams)
Which are the best Franchises by growth, branch and demand? What makes them different?
The Franchisors mentioned above are growing fast because they have clear goals, products that are very specific and their business have been very successful in Argentina and many foreign visitors like very much the products and decide to take them abroad.
What's the average startup investment in money and time for a franchise?
For a local franchisee, let us say around USD 50.000 (if they rent) and they could be working in around 4 months
Which branches experience a lack of franchises?
There are some trademarks that could expand easily like La Dolfina (Argentine Polo clothes) and Volta and Persicco (artisanal icecreams)
What is the profile of the people who choose to buy a franchise?
For the big international franchisors (Mc Donalds, Starbucks, etc.), the franchisees (or main franchisees) are big companies. Regarding local franchisors, the franchisees are regularly small investors that run personally the business with small teams.
What should a franchisor know before coming to your country? Any specific requirements, legal restrictions.. etc?
First of all even if the business perspective is good, they should mainly study the current exchange control regulations in order to analyze the feasibility of the business. Then, they should seek advise regarding the potential new regulation for franchising in the new civil code that would be in place probably at the end of 2013.
