Penner & Asociates - Mexico Law Firm and Business Consulting for Mexico

For professional assistance & information on legal & business matters regarding Mexico and Latin America, please contact:

ATTORNEYS AT LAW FOR MEXICO Please contact us at our Mexico offices located at: Apartado Postal No. 9 San Miguel de Allende, Guanajuato, Mexico TEL. US.: (800) 856-5709 Local Phone & Fax: (415) 152-3648 E-MAIL

BUSINESS CONSULTANTS FOR MEXICO REAL ESTATE BROKERAGE ASSISTANCE FOR MEXICO At our Phoenix or Mexico Offices P.O. Box 42773 Phoenix, Arizona 85080 Tel: (623) 242-7442 Fax: (623) 242-7443 E-MAIL

OUR MEXICO CITY OFFICES Avenida Constituyentes no. 45 Colonia San Miguel de Chapulptepec Delegación Miguel Hidalgo 11850, Mexico, D.F. Tel: (55)5351-0438 E-MAIL

  FRANCHISING. Franchising opportunities have grown in Mexico in the years and continue to grow. There exists increased interest of legal and government protection, and tendency to some financial backing from banking institutions along with a tendency of foreign businesses to enter Mexico. Franchising gives certain security to the new businesses since the formula is tried and proven and costs for setup may be less since all is acquired with the purchasing power of a large corporation, along with proven marketing.

PRIOR 1990. Prior to 1990 there was more red tape, registry of franchise contracts, limits on franchise payments and unsuccessful protection. Since then there has been better trademark and trade name protection.

In the 1991 law covering, among other, franchises was enacted. Now more information is required to pass between the parties and also be given to the Mexican government. The transfer of trademarks is also to be notified to the governmental authority.

In the Month of November of 2001, a new set of tariffs were imposed by the Mexican Institute of Industrial Property, which increased the prior tariffs in many cases by as much as 100%.

PROBLEM AREAS. Notwithstanding the 1991 legislation, there still could be better protection and improved governmental handling of the cases that come before it. As well, there is still not enough access to loans for capital investment in franchises (and many other types of businesses), although the Mexican banking institutions are beginning to look to cash flow rather than assets for loan qualification (see Section 6. for new capital infusion in Mexican banking).