There has been many talks about a new format to do business, which seeks the profitability for businessmen and entrepreneurs. Said format is what we know as franchise, where a franchisee purchases the right to exploit and guard for the profitability of a business proven as successful, and the franchisor seeks the accelerated expansion, domination of the markets and constant construction of its brand.
According to Yali Molina, Managing Partner at CENTRAL LAW Nicaragua and partner at Gallástegui Armella Franquicias Nicaragua, the franchise represents a tool for the expansion used more frequently by a bigger number of entrepreneurs, convinced that the name of the XXI century game is called expansion. It is a model that involves the licencing of a brand and the transmission of a “know-how” seeking an accelerated replica of a successful concept of business. The franchise is used by all sizes of businesses, because their main goal is to expand and dominate the markets.
Franchises such as McDonalds, Subway, Hyatt, Hilton, Pizza Hut, among others, started their operations many years ago and discovered that the key for their expansion lies in the creation of a franchise system, giving as a result that they are among the most recognized companies in the world. These have been so successful that even during times of crisis, they have remained stable due to their business model, which has allowed them to operate in new and diverse markets, reducing the failure risks because is not secret that while some economies contract themselves, others expand.
When talking about widely recognized franchises, we come across with the value of their brands. Without a doubt, the biggest asset in a franchise is its brand, because the brand itself grants an image that is shared with the public, which provides an instant recognition in different markets. From a trade point of view, the brand is the core element to separate a product or service from other competitor or another sector of the market. Is the key that makes a product or service acquire a higher value and recognition among the costumers.
Therefore, it is vital that the franchisor received the proper advice during the process of register and vigilance of their brands, which if they are duly protected, will not only allow the acceptance among the costumers, but it will also protect you from any unconscionable person from the unauthorized use of the brands.
In Nicaragua, a countless number of franchises, both local and foreign, are developing in a constant and secure way, which has provoked in our country a growth in its economy and a better international perception.
Sayra Gabriela Fornos
CENTRAL LAW Nicaragua