It may be 90 degrees in the shade, but the real sizzle in this gateway to Latin America is the business climate, where the U.S. Franchise Trade Mission co-hosted by IFA, the U.S. Commercial Service and Franchise Times kicked off a five-day marathon of deal-making and media events with 25 American brands traveling to Panama, Colombia and Chile.
Panama City is a future Miami or Hong Kong, where skyscrapers shoot up as densely as grass in a thick carpet of banks and international hotels. It has a “dollarized economy” (no need to change money), a sophisticated financial sector (Citibank just celebrated 100 years here) and an appetite for U.S. brands.
To call it “Little America” is a stretch, but with U.S.-style electrical outlets, a population that visits the United States often, and a foundation of franchising, trade mission participants report that the country is a golden opportunity for unrepresented franchise brands.
“We met with people who have fundamental knowledge of the value of franchising and have seen the success of U.S. franchises in this market and are very interested in these opportunities,” said Scott Chorna, director of new international business development for FOCUS Brands, reporting on the first day of deal-making. “It’s a sophisticated, pro-American, developed market, but still ripe with opportunity.”
Cinnabon, a FOCUS Brand, has 11 stores in the country through a 10-year-old franchise agreement. Early next year, Chorna says, the group will open the first Auntie Anne’s. Moe’s Southwest Grill and Schlotzky’s, also FOCUS Brands, are not far behind.
Panama’s unique position as a logistics and transportation hub between North and South America and the Pacific and Atlantic oceans make the country even more attractive. An expanded Panama Canal is set to open next year, just when a new U.S.-Panama Free Trade Agreement is set to take effect, dropping tariffs and other barriers to bilateral trade.
“It will make U.S. imports 15 percent cheaper,” notes Fred LeFranc, CEO and founder of Results Thru Strategy, who is advising specialty sandwich brand Which Wich on its international expansion. “That will fuel franchise development.”
The U.S.-Panama relationship is very warm, and it doesn’t hurt that Panama is a huge importer of U.S. goods. For every dollar of U.S. imports of Panamanian goods, Panama imports $20 of U.S. products and services. The economy of this nation of 3.5 million is expected to grow at a hot 6 percent annually over the next several years.
Rogelio Martinez, vice president of international franchise development for Tutor Doctor was impressed with the potential master developers he met.
“The candidates were well qualified,” he said. “This is the event with the most high-quality candidates I’ve ever seen.”
According to Tutor Doctor and most of the trade mission companies, the U.S. Commercial Service team led by Kristin Houston, Senior International Trade Specialist and Enrique Tellez, Senior Commercial Specialist who did the matchmaking in Panama can go to the head of the class.
The brands represented on the mission are:
• BrightStar Care
• FOCUS Brands – Carvel®, Cinnabon®, Schlotzsky’s®, Moe’s Southwest Grill®, Auntie Anne’s® Pretzels, and the franchisor of Seattle’s Best Coffee®
• Global Franchise Group – The Athlete’s Foot: TAF®, as well as four quick service restaurant (QSR) franchise concepts: Great American Cookies®, Marble Slab Creamery®, Pretzelmaker® and Pretzel Time®
• HASB Global Franchise Finance Alliance – finance sponsor of the trade mission
• Hertz Equipment Rental
• Home Instead Senior Care
• Jani-King International
• McAlister’s Deli
• Popeyes Louisiana Kitchen
• Rita’s Italian Ice
• Round Table Pizza
• Sport Clips, Inc.
• The Melting Pot
• Tutor Doctor
• Which Wich
• Wing Zone