The franchising sector has developed interestingly in Ecuador since 2000; however, it has stagnated in recent years due to social, political and economic factors in the country. The sector has begun to resurface in the last two years. That is why many entrepreneurs, businessmen and innovators have taken the challenge of transforming their businesses under this format or bring successful concepts already developed in the region and this is observed mainly in the food and service industry.
Both the public administration and the private sector have seen this business format with great interest, due to its potential contribution to the country’s economic development. In this sense, it is important to highlight that there is still a lot to be done: publicize the franchises, encourage innovators to actively participate and encourage the formalization of the sector, among others.
In Ecuador, there is a significant growth in the franchise sector. However, the information is limited, since the historical data is scarce, which does not allow an adequate analysis of its development. Therefore, with the few studies that were found, it is estimated that of the total number of franchises in the country, only 14% are national brands, compared to 86% of foreign brands operating in our territory. Thus, we also observe that, of the total franchises in Ecuador, the USA occupies 50%, Colombia 13%, Argentina and Venezuela 8%, Spain and Switzerland with 6%, mainly. These figures are not adequate to the reality due to the progressive increase of businesses that – at present – work under the concept of franchises in the country.
The most important franchises are in the cities of Quito, Guayaquil and Cuenca, mainly fast food and services of different kinds. With the above, it can be noted that the country is at an intermediate stage in the evolution of the sector: the emergence of local franchise formats and the resurgence of the concept is observed, to later continue with its consolidation and maturity.
Currently, Ecuador does not have a special legal framework for this sector; this happens in most countries of the region. Despite this, it has a fairly complete legal protection that allows legal security, both for franchisors and franchisees, contained in the most important legal bodies in the country.
There are innumerable challenges that arise to continue with the development, growth and evolution of this successful business format, so we shall emphasize on the importance of formalizing the sector with reliable data to analyze its evolution and how it contributes to innovation processes. In addition, t is mandatory to build greater concepts of Ecuadorian businesses within the territory, such as those that are being commercialized internationally.
That is why our task is extremely challenging; we must collect all information about franchisable businesses, advertise in the media, universities, financial institutions. To take it to the next level, either a chamber or another institution is needed to create a dynamic and active role that can lead in the sector and, conducting business rounds and commercial fairs, which will help the franchise sector continue to grow and contribute to the country’s economy and its development.
Finally, at TOBAR ZVS SPINGARN / FRONT CONSULTING ECUADOR, we work in the development and expansion of this important economic sector, contributing with all those entrepreneurs in the growth of their businesses, under the concept of franchising or other associative forms and in supporting the local franchises for export, as well as international franchises to enter to our country; all this because we are in a conjunctural moment – of great importance in Ecuador – for the growth and successful development of this way of doing business.