Franchises in Uruguay
Do you want a Franchise in Uruguay?
If planning to open a business in Uruguay, the Franchise Annual Conference had its ninth edition on May 28th at the Radisson Hotel Montevideo during 2015. Over 700 attendees were expected.
In Uruguay, many consultant companies are focused on the development, sustainable growth and business expansion of franchises in the region. There are several consulting companies in Uruguay working on the commercial and professional advice on the franchise model in the region and replicate a successful and experienced market concept.
Franchises send Sales Sky-Rocketing
The dream of owning a business comes for many in the shape of having a franchise. Far from being extremely expensive, the market offers opportunities for all budgets.
Each brand has its own rate. Some ranging from US$6,500 to even US$350,000 in the local market. Meanwhile, the costs of having a master franchise – one that gives the franchisee the rights to use the franchise – generally exceeds U$S60,000.
There are several examples of Uruguayan franchises that are expanding to other regions. It is common to see local franchises succeed locally first and expand to Buenos Aires, Asunción and Sao Paulo.
How does the System Work?
It is worth mentioning that the system works the same way worldwide with all budgets, requirements, and basic integrated elements. Although the degree of investment in Uruguay, from lower or higher, is considerably lower than in the rest of the region.
In the franchise system both the brand owner and the interested person with the right profile can acquire a line of business and use it for a certain time.
One must know how to distinguish between the rate of duty – the right to use the name of the marker and investment, since the latter implies the total amount.
There are several Franchise Types in Uruguay
Maestra: The rights to exploit the use of the brand and its know-how in a given territory are obtained.
Individual: Right acquired by an entrepreneur – investor to exploit the use of a brand and a single way of doing business in a given area and only for that territory.
Corner: Rights to exploit the use of a trademark within a local or mall, holding the handles company standards.
Distribution: When the franchise has associated products supply, the franchisor to the franchisee, cannot be supplied from another source other than this.
Safer Returns but when?
Investment in food takes longer than in other areas to bring a return, recovery varies between 15 and 18 months while restaurants take an average of 24 months.
There are items that are -in all categories- greater investments than others. Such is the case of gastronomy, which requires significant investments in equipment and adaptation of the premises. But no matter what the category; any business can grow through franchise format.
The Franchises in Uruguay are regulated by Uruguayan Chamber of Franchises that promotes contractual commercial practices. This association follows an ongoing analysis of the franchise business model and its legal and statutory regulations in order to propose to the authorities and public institution rules that best contemplate their legal, economic and fiscal status.
In the last years it has fostered all kinds of links with other national, foreign and international institutions of similar nature, for the development of actions and events in Uruguay.
Several Uruguayan companies have started to adopt the franchise system to start its expansion locally and abroad. Such is the case of Limport, cleaning and maintenance company which works mainly on the maintenance of green areas, such as gardens, parks, sports fields and public spaces. They have already expanded to Paraguay and defining opportunities in Colombia and Bolivia. Import together with CargaExpress which transports electronic equipment, received the National Award for Franchises in Uruguay 2014.
• In the world a franchise opens every four minutes.
• According to the Site Statistics, among the 85% to 90% of businesses operating under the franchise format, remain open for a period of 5 or more years, while in the individual enterprises they succeed only 20% to 25%.
• The hardest times are during the first year and a half and second year.
The International Franchise Fair of Uruguay (FIFU) is the first and only annual event of franchises in Uruguay, with the fundamental premise of spreading the system and generates a special opportunity where entrepreneurs, professionals, experts franchise, and the general public, can interact, learn and preferential access to information on successful business concepts, tested national and internationally.
Since its first edition of the event (2006) to the eigth (2014) it has done work training and dissemination of the concept involved and interest in general, proving a market growth of the system at the level of small and medium companies, driving motor of franchises in the world.
The event has received important awards, including “National Interest” by the Presidency of the Republic, “Departmental Interest” by the Municipality of Montevideo, “tourist interest” by the Ministry of Tourism and Sports, and this will also add recognition to the Uruguayan Chamber of Franchises.
Some of the items that you can find in FIFU 2015:
– Hair Salon
– Cleaning products
– Thematic Stores
– Gyms and fitness
– Passenger services