[Federal Register Volume 75, Number 21 (Tuesday, February 2, 2010)]
[Notices]
[Pages 5285-5287]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-2115]


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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

[[Page 5286]]

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.

[[Page 5287]]

Contacts

Martha S[aacute]nchez, U.S. Commercial Service Mexico City, Tel: 011 52 
55 5140-2621, E-mail: [email protected].
Kristin Houston, U.S. Commercial Service California, Tel: 949-660-1688, 
ext. 314, E-mail: [email protected].

Sean Timmins,
Global Trade Programs, Commercial Service Trade Missions Program.
[FR Doc. 2010-2115 Filed 2-1-10; 8:45 am]
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