Franchises grow five times more than the Mexican economy despite inflation and insecurity
The franchise sector in Mexico is expected to grow 6 percent this year, outperforming the economy significantly despite challenges from operational costs and insecurity.
The franchise sector in Mexico is set to grow 6 percent this year, which is five times more than the country's overall economic growth. Despite this optimistic projection, many businesses operating under this model face significant challenges, such as increasing operational costs, rising input prices, tariffs, and pervasive insecurity throughout the country. These factors create a challenging environment for franchise owners, who must navigate these obstacles while attempting to expand their operations.
One notable player in the franchise market is Wings Army, which is planning to strengthen its presence in the U.S. market by opening over 30 new locations in California, as well as two branches in Madrid, Spain. This expansion signifies a strategic move to tap into both the American and European markets, aiming to establish a unique brand offering with its concept of "Mexican cantina." The franchise currently operates 250 locations in Mexico, and with the upcoming soccer World Cup, it plans to launch around 18 new establishments to capitalize on the increased consumer activity during this major sporting event.
Despite the growth potential, Wings Army has had to close six outlets due to safety concerns in Mexico, highlighting the impact of insecurity on business operations. As the franchise industry grapples with these challenges, business owners are faced with tough decisions about investing in their current locations in Mexico versus seeking opportunities in more stable environments abroad, further emphasizing the need for strategic adaptability in the face of adversity.