Monterrey, Mexico: Receptive to US Brands

Monterrey Mall


Monterrey, Mexico has been described as the most Americanized city outside the US.  The entrance to a major mall with signage in English.

It was an early morning for mission participants on October 8th as the 2014 Mexico Franchise Trade Mission headed north to Monterrey, which is even more familiar with US concepts than Mexico City. While briefing participants in Mexico City, IFA member Ferenz Feher, CEO of Feher & Feher said, “Monterrey is not only the most Americanized city in Mexico, it is the most Americanized city in the world outside of the US”.  The state of Nuevo Leon, of which Monterrey is the capital compares favorably to Mexico City in terms of income levels, infrastructure and commercial real estate availability.  The state has grown safer over the last 2 to 4 years, driving increased foreign direct investment.  Nuevo Leon has the highest worker productivity in the country, is responsible for 11% of Mexico’s total manufacturing output and 8% of the country’s total GDP.  Nuevo Leon is the #1 center for foreign direct investment in Mexico with 65% of trade between the US and Mexico passing through the state.

The stop in Monterrey began with a lunch and series of market briefings at the InterContinental Presidente Hotel.  Initial remarks were made by John Howell, Commercial Consul from the US Consulate in Monterrey.  The US Consulate in Nuevo Leon is one of the biggest US consulates and is the #1 originator of US tourist visas in the world.  Also home to the #1 grossing Carl’s Jr. in the world, the city of Monterrey has the highest per capita GDP in Mexico- which is two times the national average.  In the district of San Pedro, the per capita GDP of $37,000 is comparable to US levels.  English is widely spoken and US culture is pervasive.  John Howell joked, “When I ask a local which soccer team is their favorite, I often hear the name of an NFL team in response”.

Next, Armando De La Fuente from Alles Group, a real estate services firm briefed the group.  De La Fuente gave a detailed overview of commercial real estate in Mexico’s second largest economy.  Numerous mixed use developments have either recently opened or are under construction, all in the comparatively competitive range of $32-39 per sq. meter per year.  He said that many downtown landowners do not want to sell to developers in anticipation of rising prices.

To conclude the briefings, Celina Villareal Cardenas, Undersecretary for Foreign Investment and International Trade for the State of Nuevo Leon and a colleague gave an in-depth report on the state’s economy.  Kia has just committed to make an investment of over $1 billion USD to build an automotive manufacturing facility and over 600 Korean families are expected to relocate to Monterrey in the next 18 months.

Mission participants were transported through streets slowed by a visit from President Nieto to tour local malls and commercial areas. On the 9th, mission attendees spent full days in matchmaking meetings.  Some attendees met as many as eight investors over the course of the day.  Title Boxing Club scored the mission’s fastest success, signing a master franchise agreement with investors from the Yucatan Peninsula on the 8th.  On the 9th, Title Boxing Club’s representative and their new licensees began meeting Monterrey investors to discuss subfranchising.


Anthony Padulo of BrightStar Care and translator prepare for meetings with Mexican investors


Ericka Garza of Boston’s ready to start business to business meetings with potential franchisees in Monterrey, Mexico

US Franchise Trade Mission Kicks Off in Mexico City



Trade Mission participants gather at the US Embassy in Mexico City

While the leaves were changing colors in the US, another Franchise Trade Mission headed south to Mexico. US franchisor brands, which included Boston’s Restaurant and Sports Bar, BrightStar Care, Denny’s, FASTSIGNS, FOCUS Brands, Mosquito Squad, Smoothie King, Title Boxing Club, Wing Zone, World of Beer, and Xtreme Lashes, were among the participants exploring the key Latin American market. According to the Mexican Franchise Association, the country is home to 1370 franchise brands.   90 of those are from the US and over 50 are other international brands. Franchising represents 6% of Mexico’s GDP, making Mexico the 5th largest franchise market in the world.

The trade mission began its journey in the nation’s capital, Mexico City on the morning of October 6th with a market briefing at the US Embassy. The group was welcomed by Rebecca Torres, Commercial Attaché for the Embassy. She told participants, “Culturally Mexico is extremely accepting of US Brands. It’s almost a status thing.”

IFA member Ferenz Feher, CEO of Feher & Feher gave mission participants a briefing on the Mexican market. He mentioned that trade has tripled since the 1994 signing of NAFTA and while annual GDP growth in Mexico was only 1.6% over the last year, franchising grew almost 12% in the last year. Feher offered market tips to the participants, including adapting to the pace of Mexican business culture. Master franchising is the most common model for US franchisors doing business in Mexico, but a regional approach should also be considered. Deals can take as long as 1 to 1.5 years, but then yield a strong return. He stated, “You have a great opportunity on your hands.”

Next, Pablo Hooper Ramirez, Partner with Gonzalez Calvillo briefed mission participants on the Mexican legal and regulatory environment. Mexico is a first to file market, meaning rights belong to the first company to register a trademark, not the first to use the mark. He told the participants that less disclosure is legally required in Mexico than the US.  There is a treaty between Mexico and the US to prevent double taxation. Ramirez recommended that US franchisors have their franchise agreements signed in English if their licensee can understand English.

Participants then braved Mexico City traffic to tour a series of Mexico City malls and commercial areas before meeting with prospective partners. The first major shopping mall in Mexico City was built in 1971, but there has been a boom in mall construction in response to the growing demand since 2008. The demand is so high for prime retail space that some malls charge “key money” of as much as $1 million USD for entry.

After spending the day of Tuesday the 7th in matchmaking meetings with Mexican investors, on the night of the 7th, Feher & Feher hosted a reception for the trade mission attended by Mexican businesspeople and government officials, concluding the first stop on the mission’s itinerary.


Ferenz Feher, CEO of Feher & Feher gives a briefing on the Mexican franchise market

IFA Addresses Threats to the Franchise Model at MUFSO

On Oct. 7, the 55th annual Multi-Unit Foodservice Operators Conference, better known as MUFSO, concluded in Dallas. MUFSO is the most comprehensive executive conference in the restaurant industry and IFA sponsored a session titled, “Franchising Under Attack: Get Informed & Learn How to Take Action!”

mufso pic2

The session provided an overview from industry leaders and legal perspectives on all the franchise legislative and policy issues facing the industry. It also explained how to get involved through the recently launched IFA Franchise Action Network (FAN).

Panelists included Patrick Doyle, president & CEO, Domino’s Pizza Inc.; Aziz Hashim, president/CEO, NRD Holdings, CEO/chairman, Impact Investments; Michael Lotito, co-chair and shareholder, Littler’s Workplace Policy Institute; Steve  Romaniello,  CFE, managing director, Roark Capital; and Matt Haller, senior vice president, media relations & public affairs, IFA, who served as moderator.

The session got underway with Hashim, Doyle and Romaniello echoing points on the state of the industry under attack. Hashim noted he has “never seen this kind of wave,” regarding the industry threats with Romaniello adding, “Make no mistake, the industry is under attack and it is broader and deeper than most people think.” Doyle was hopeful “that rational people will make rational decisions, but a lot is at risk right now for the industry that could impact millions of business owners and jobs.”

Haller guided the conversation next to last week’s veto by Governor Jerry Brown of harmful franchise relationship legislation in California. The veto of SB 610 represented a true victory for franchise small business owners and employees throughout the state, the culmination of a two-year strategic campaign by IFA and California FANs.  “The reason people choose to be franchisees are brand promise and operations, franchising success rate is higher.  Legislation like this would weaken brand consistency which would lead to more failures,” Doyle commented.

Hashim added that SB 610 would have been, “government interfering in business contracts and have unintended consequences,” noting that, “special interest is at play trying to cause a rift between franchisees and franchisors.” Romaniello spoke to the energy surrounding the IFA opposition campaign:  “we have made a greater effort to engage franchisees, there are more common interests than ever before, and also a common enemy,” and continuing that “the Franchise Action Network is a tool to engage on a more granular and local level, as state and local issues are now a focus to be pro-active on, and California is a great example.” Lotito gave the opposition perspective on what SEIU is spending on this fight, how well its messaging is organized and the real challenge in this debate.

The next issue of discussion was the National Labor Relations Board recent ruling on joint employer. Lotito walked the group through the full impact of the proposed joint employer standard and what it means for the industry. Hashim noted that the ruling “profoundly changes the franchise model. Worst case, everything becomes corporate-only stores, which threatens the basic foundation of franchising. Franchisees are independent entities that hire, fire, promote and set wages.”

The panel closed with a call to action from all the panelists that there is no choice but working together to protect the industry and engaging lawmakers with the franchise business community.

For more information about the Franchise Action Network or to sign up, please visit

For any questions or inquiries, please contact Erica Farage at 202-662-0760 or

U.S. Added 21,360 Franchise Jobs in August

U.S. private-sector franchise jobs increased by 21,360 during August, according to the “ADP National Franchise Report.” Restaurants and auto parts and dealers again led the way, with accommodations and business services showing healthy improvement as well. In fact, business services adds double its 12-month average of job gains.

Distributed to the public each month free of charge, the report measures monthly changes in franchise employment derived from ADP’s actual transactional payroll data.

The report is produced by ADP, a leading global provider of human capital management solutions, in collaboration with Moody’s Analytics, Inc. and is published by the ADP Research Institute.

Click here to access the ADP National Franchise Report Infographic.

ADP graphic

Fast Food Workers Plan Another Round of Coordinated Protests this Week



Employers at fast food chains around the nation should brace themselves for a series of protests and acts of civil disobedience that will occur this Thursday, September 4.  The strikes, organized by members of the “Fight for 15” movement, are part of the nationwide crusade to raise the minimum wage. The Fight for 15 organization carried out a similar campaign to raise wages last spring. There are few details on the nature of the protests that will reportedly occur in as many as 150 cities across the country.

Such organized and concerted efforts are part of a broader trend to effectuate changes to wages and working conditions outside of the traditional labor union construct. For example, so-called “worker centers”– otherwise known as union front organizations (UFOs) – are increasing in number, and working in conjunction with unions to achieve typical labor organization goals.  UFOs are generally non-profit organizations offering a variety of services to their members, including worker advocacy, lobbying, employment services, and legal advice.  The Fight for 15 movement has union support, particularly from the Service Employees International Union (SEIU).  Last year, the AFL-CIO vowed to work with such labor offshoots.

Employers must be careful not to interfere with employees’ lawful Fight for 15 activities.  Under Section 7 of the National Labor Relations Act (“NLRA”), employees have the protected right to engage in concerted activity for the purpose of mutual aid and protection.  These rights apply to both union and non-union employees.   Concerted activity includes individual employees seeking to initiate group action, or a group of employees trying to bring group complaints to management, regarding employment related concerns.  Any adverse employment action taken in response to an employee’s participation in Fight for 15 could be an unfair labor practice if it interferes with, coerces, or restrains the employee’s rights guaranteed by Section 7 of the NLRA. Remedies for unfair labor practices include reinstatement with full back pay and interest.  Employers also are required to post a notice to all employees outlining the NLRA violation and the remedy.

Meanwhile, in a round of Labor Day speeches, President Obama and Labor Secretary Perez reiterated their support to increase the federal minimum wage to $10.10 per hour. At least 13 states and the District of Columbia have increased their minimum wages in recent months, and a handful of states and localities have placed the question of whether to raise the minimum wage on the November ballot.  It is expected that issues such as income inequality and wage theft will be key talking points for many Democrats going into the November elections.

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