MEXICO Law and Practice Contributed by: Gustavo A. Alcocer, Luis Astorga, Isabella Montero Torres and Fernanda Martínez Zolezzi, OLIVARES
various matters relating to the operation and organisation of companies. She has also supported the corporate law practice in the drafting and preparation of specialised articles on franchising matters for various professional associations, including the American Bar Association (ABA) and the International Bar Association (IBA).
OLIVARES Pedro Luis Ogazón 17 Col San Ángel Alc Álvaro Obregón CP 01000 CDMX Mexico Tel: +52 55 5322 3000 Fax: +52 55 5322 3001 Email: olivlaw@olivares.mx Web: www.olivares.mx
1. An Introduction to Franchising 1.1 Franchise Market Overview According to the latest study published by the Mexi - can Franchise Association ( Asociación Mexicana de Franquicias – AMF), there are currently more than 1,500 brands operating and expanding under the franchise model. There are currently more than 300 franchise companies affiliated with the AMF across categories including automotive, pet care and animal services, entertainment, recreation, fashion, textiles and accessories, food and beverages, professional and financial services. The franchise network in Mexico generates more than 1 million jobs and accounts for approximately 5% of the country’s gross domestic product (GDP). Accord - ing to various estimates, the sector carries out more than 1,425,000 transactions per day. Leading Mexican brands operating in the market include: • KidZania, in the entertainment and education sec - tor;
• FRAICHE, in the fragrance and personal care sec - tor; • Tintorerías Max, in the services sector; • Baby Ballet Marbet, in the training and education sector; and • Creditaria México, in the financial services sector. At the same time, some of the leading international franchise brands operating in Mexico are North Amer - ica-based companies, including McDonald’s, Star - bucks, KFC, Domino’s Pizza, Burger King, Subway, 7 Eleven, Chipotle, Little Ceasar’s, Panda Express, Tim Hortons, Pizza Hut and Kumon. More recently, several Asian brands have been explor - ing opportunities to enter the Mexican market. One example is Mixue, a Chinese franchise operating in
the food and beverage sector. 1.2 Franchise Regulation
Franchising is regulated under the Federal Law for the Protection of Industrial Property ( Ley Federal de Protección a la Propiedad Industrial – LFPPI) and its corresponding Regulations. The law’s most relevant provisions address the definition of a franchise, the
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