[Federal Register: February 2, 2010 (Volume 75, Number 21)]
[Notices]
[Page 5285-5287]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02fe10-30]
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DEPARTMENT OF COMMERCE
International Trade Administration
Mission Statement; Franchise Trade Mission to Mexico; March 3-5,
2010
AGENCY: International Trade Administration, Department of Commerce.
ACTION: Notice.
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Mission Description
The United States Department of Commerce, International Trade
Administration, U.S. and Foreign Commercial Service is organizing a
Trade Mission to Mexico City, March 3-5, 2010, with an optional spin-
off visit to Monterrey. The mission will focus on assisting U.S.
franchise companies to launch or increase their business in the Mexican
market. The mission will help participating firms gain market insight,
make industry contacts, solidify business strategies, and advance
specific projects, with the goal of increasing U.S. business in Mexico.
The mission will include business-to-business matchmaking appointments
with potential local and regional investors at Mexico's International
Franchise Fair--the Feria Internacional de Franquicias. The delegation
will be comprised of U.S. franchise representatives in various industry
sectors with potential in Mexico.
Commercial Setting
Today there are nearly 1,000 franchises in Mexico--ranking the
nation seventh in franchises in 2008 by the World Franchise Council--
due to market maturity, strong legal framework, support from the
government, and franchise certification programs.
Mexico's franchise industry has proven to be one of the most
important sectors for the country's economic growth, generating more
than $7.25 billion in 2008, which represents 6 percent of total GDP.
Franchising currently provides over 600,000 jobs and 55,000 points of
sale throughout Mexico. The franchise sector has maintained constant
growth between 14 and 17 percent over the last 5 years, claiming 15
percent of every peso spent in Mexico.
Its strong commercial ties to the United States and recognition and
acceptance of U.S. brands make Mexico a natural path for expansion into
Latin America. Mexico's strong legal framework and large and diverse
market offer numerous opportunities for U.S. firms looking to expand
abroad. Sixty-eight percent of Mexican franchises are domestic and 21
percent U.S., making the United States by far the largest international
provider of franchises. The International FranCorp ranked Mexico as the
10th best country in the world in 2008 for penetration through
franchises, with one franchise for every 800 citizens.
Traditionally, large cities in Mexico have provided the primary
markets for franchises. Eighty-three percent of franchised businesses
in Mexico are in Mexico City, Monterrey and Guadalajara. However,
several franchises have expanded into smaller cities this year. While a
non-franchise business in Mexico has only a 40 percent chance of
surviving more than 2 years, 95 percent of franchised businesses in
Mexico are still operating after five years, demonstrating the strength
of the industry.
The Mexican Franchise Association (AMF) worked very closely with
the Ministry of the Economy to develop the National Franchise Program
(PNF) in 2007. This program promotes the development of international
franchise concepts in Mexico with the goal of increasing employment and
investment in the country. It provides opportunities to Mexican
entrepreneurs to create or re-engineer a franchise concept, which not
only supports growth and modernization of existing franchises, but
provides support to investors looking to acquire international
franchise concepts. So far in 2009, the Mexican government, through the
PNF, has distributed nearly $15.3 million of the $27 million budgeted
for 2009. Specifically, about $4 million was given to new entrepreneurs
looking to acquire franchises. This program offers an extraordinary
opportunity for U.S. brands looking to either enter or expand their
presence in the Mexican market.
Mexico offers numerous opportunities for a wide variety of firms
looking to expand into a new market. Training, automotive services,
pawn shops, senior care, child care, fitness programs, and gyms account
for 24 percent of the franchise market, followed by the restaurant
sector with 23 percent, retail 21 percent, education 14 percent,
personal care 8 percent, and entertainment 5 percent. The remaining 5
percent is a mix of other sectors, including cleaning, laundry, dry
cleaning, and tailoring. In terms of best opportunities for U.S. firms,
food concepts lead the industry, with fast food restaurants and casual
dining the most attractive to Mexican investors. However, there are
many other sectors that are growing rapidly and successfully in the
Mexican market, including education/entertainment services for children
and personal care services (spas, beauty shops, and health care).
Due to the economic downturn, the franchise industry expects
reduced growth during 2009 and 2010, specifically for concepts that
require large investments and big operational requirements. However,
because the current economic crisis has led to increased unemployment,
many
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Mexicans are looking to self-employment options to assure their future
income, which provides more franchise opportunities. In order to make
franchise concepts more attractive to new investors, many large
companies looking for increased market presence in Mexico have
developed a micro-franchise model packaging stores in smaller units in
order to decrease investment requirements.
Both Mexico in general, as the gateway to Latin America, and the
Feria Internacional de Franquicias (FIF) in particular attract
prospective investors from Central and South America, as well as the
Caribbean, all in search of opportunities to develop in their
respective markets. With the franchise sector still demonstrating 10
percent growth in 2009 and the AMF prediction that the size of the
Mexican economy will still allow for double the number of current
franchises, Mexico offers numerous economic opportunities for U.S.
franchisors looking to expand internationally.
Mission Goals
The Franchise Trade Mission to Mexico will help U.S. firms initiate
or expand their business to Mexico by providing business-to-business
introductions and market access information.
Mission Scenario
The mission will begin in Mexico City, where participants will
attend market briefings by Embassy officials, meet with government and
industry contacts at networking events, and participate in one-on-one
business matchmaking meetings with potential local and regional
investors at FIF. Scheduled for March 4-6, 2010, FIF is Latin America's
definitive franchise expo, typically hosting more than 20,000 visitors
and recognized by franchisors as an effective gateway to international
expansion. A presence at FIF is expected to enhance opportunities for
the trade mission participants. (U.S. companies seeking to exhibit at
FIF can visit the show Web site at http://www.fif.com.mx). The mission
will continue with an optional spin-off visit to Monterrey, where
additional matchmaking will take place.
Proposed Mission Timetable
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Wednesday, March 3, 2010 Participants arrive in
Mexico City.
Evening Market briefing.
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Thursday, March 4, 2010 Business matchmaking
Friday, March 5, 2010 meetings at the
International Franchise
Fair in designated
Commercial Service area.
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Monday, March 8, 2010 Matchmaking in Monterrey
(spin-off option).
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Participation Requirements
All parties interested in participating in the Commercial Service
Franchise Trade Mission to Mexico City (and Monterrey) must complete
and submit an application package for consideration by the Department
of Commerce. A minimum of 8 and a maximum of 12 companies will be
selected to participate in the mission from the applicant pool. U.S.
companies already doing business with Mexico as well as U.S. companies
seeking to enter Mexico for the first time are encouraged to apply.
Fees and Expenses
After a company has been selected to participate on the mission, a
payment to the Department of Commerce in the form of a participation
fee is required. The participation fee for the Mexico City portion of
the mission will be $2,305 for large firms and $2,265 for a small or
medium-sized enterprise (SME).\1\ Expenses for travel, lodging, most
meals, and incidentals will be the responsibility of each mission
participant. Mission participants will have the opportunity to take
advantage of additional business matchmaking in Monterrey, available to
large firms for $1,400 and $1,369 for SMEs.
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\1\ An SME is defined as a firm with 500 or fewer employees or
that otherwise qualifies as a small business under SBA regulations
(see http://www.sba.gov/services/contractingopportunities/
sizestandardstopics/index.html). Parent companies, affiliates, and
subsidiaries will be considered when determining business size. The
dual pricing reflects the Commercial Service's user fee schedule
that became effective May 1, 2008 (see http://www.export.gov/
newsletter/march2008/initiatives.html for additional information).
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Conditions for Participation
Applicants must submit a completed and signed mission
application and supplemental application materials, including
information on the company's products and/or services, primary market
objectives, and goals for participation.
Each applicant must certify that the products (if any)
and/or services it seeks to export through the mission are either
produced in the United States, or, if not, marketed under the name of a
U.S. firm and have at least 51% U.S. content of the combined value of
the finished product or service.
Selection Criteria for Participation
Selection will be based on the following criteria:
Suitability of the company's products or services in the
Mexican market;
Applicant's potential for business in Mexico, including
likelihood of exports resulting from the mission;
Consistency of the applicant's goals and objectives with
the stated scope of the trade mission.
Referrals from political organizations and any documents containing
references to partisan political activities (including political
contributions) will be removed from an applicant's submission and not
considered during the selection process.
Timeframe for Recruitment and Applications
Mission recruitment will be conducted in an open and public manner.
Outreach will include posting on the Commerce Department trade mission
calendar (http://www.ita.doc.gov/doctm/tmcal.html) and other Internet
Web sites, press releases to general and trade media, direct mail,
notices by industry trade associations and other multiplier groups, and
publicity at industry meetings, conferences, and trade shows. The
International Trade Administration will explore and welcome outreach
assistance from other interested organizations, including other U.S.
Government agencies.
Recruitment for the mission will begin immediately and close
February 12, 2010. Applications will be available online on the mission
Web site at http://www.buyusa.gov/mexico/en. They can also be obtained
by contacting the mission contacts listed below. The mission will open
on a first come first served basis. Applications received after
February 12, 2010, will be considered only if space and scheduling
constraints permit.
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Contacts
Martha S[aacute]nchez, U.S. Commercial Service Mexico City, Tel: 011 52
55 5140-2621, E-mail: martha.sanchez@mail.doc.gov.
Kristin Houston, U.S. Commercial Service California, Tel: 949-660-1688,
ext. 314, E-mail: kristin.houston@mail.doc.gov.
Sean Timmins,
Global Trade Programs, Commercial Service Trade Missions Program.
[FR Doc. 2010-2115 Filed 2-1-10; 8:45 am]
BILLING CODE P