Franchises Seeking Law
The franchise sector in Mexico continues to thrive despite economic challenges, but is facing emerging conflicts due to outdated regulations.
The franchise sector in Mexico has demonstrated remarkable resilience amidst economic crises, pandemics, and security issues. Each year, franchises continue to grow, often outperforming the GDP by several percentage points, thus contributing to economic growth and the creation of well-paid formal jobs. Additionally, franchises help strengthen intangible national assets by building networks that reach all corners of Mexico and extend into other jurisdictions.
Despite this growth, the legislative framework governing franchises, established in 2006, is starting to show signs of strain. While it initially aimed to protect franchisees through a minimal rights platform all contracts must respect, the current regulations are becoming a source of conflict and disagreement. Stakeholders argue that the existing law is insufficient to address the evolving dynamics of the franchise sector, which has transformed significantly since its inception.
As businesses call for legislative reform, there are implications for both franchisees and franchisors, potentially impacting job creation and economic contributions in the long run. Unless the legal framework adapts to contemporary needs, the sustainability and growth of the franchise sector in Mexico could be jeopardized, underscoring an urgent need for legislative action to align with current market realities.