Why Franchises Are Good To Invest In

Why Franchises Are Good To Invest In

The world of franchising throughout Latin America is growing at a very high rate and the big question for those who have the necessary capital is:why franchises are good for investing?

If we make an evaluation of the growth of this type of business from 2001 to 2011, the results are very good. Those who wonder which are the best franchises can see this data as good evidence that franchises are a type of company that can have great benefits and then identify the sectors that registered a better evolution.

In general, the number of existing franchises in the Latin American market grew by 50%, increasing to more than 47,090 units during this period.

In relation to the amounts of the networks present in countries like Mexico, these rose from 600 to 2031, a growth that exceeds 200%. With this type of growth it is only natural that franchise sales have also exceeded $ 25 billion which is an impressive number.

This brief summary of the general growth of the franchise in Latin America shows that this type of business represents enormous advantages for all those involved, the franchise, the franchisor and even the economy of the country.

Franchises have been proven to be a good form of investment, now the million dollar question is What are the best franchises on the market?

One of the most important indicators that can answer this question is knowing which sectors of activity earned the most. In 2012, for example, the sector of activity that had the highest volume of business, with a value of 24.048 million dollars, was commercial services. The second best was the food sector, worth $ 17.499 million.

Regarding the highest percentage growth in revenue between 2011 and 2012, we must mention as the leader the hotel and tourism companies with 85.8%, followed by the furniture, decoration and gifts sector, with a growth of 35%.

This remarkable growth of the Hospitality and Tourism sector is justified by the fact that Latin American investors have realized the potential of activity in this sector, when it develops in the franchise system.

Brazil is another of the countries that has been successful with franchises, especially in the tourism aspect, where it has a large annual influx of tourists and most of these seek international chains that already know their country of origin.

So this is an industry where you can find some of the best franchises to invest in. However, at the same time it is an industry that represents a certain risk, especially in regions that are affected by seasonality and that also requires a large sum of investment.

To find the best franchises with minimal risk you must, first of all, look for a company that adapts to the region in which you intend to develop the activity.

Statistical data can be a good indicator and give a little help, but if you want to implement a franchise in an inland region that does not have a constant flow of tourists, and you want to invest in Hospitality and Tourism, surely that will not be a good option.

Once you find a business area that suits your region, you must do an exhaustive study of the market, in order to know what customers want.

It is vital that you provide a type of product or service that customers are looking for and are willing to pay for. Only then can the risk of customer rejection be reduced.

For all these reasons, the best franchises with reduced risk largely depend on the region and type of target customer. Research as much as you can on which ones are the best however, here are some examples.

The best franchises with more presence in Latin America.

The franchise with the largest presence in our countries is McDonald’s, with more than 3,300 units running at full steam, followed by Burger King, and others.

As you can also see, the most relevant industrial sectors are very diverse.

In order for you to select the best franchises without assuming a high risk, you must attend and find out about various conventions, fairs and seminars that are carried out on the subject of franchises, and search among those that adapt to the reality of the region in which you want to implement it, analyzing and studying case by case.

You can bookmark this page