San Jose [TCRN] – The franchise sector in Costa Rica has shown strong growth over the years. According to data provided by the Costa Rican Chamber of Commerce, there are currently 221 brands operating as franchises in the country, of which 183 are international and 38 are national. This represents a growth of 28% compared to 2011.
Costa Rican franchises grew by 52% compared to last year.
The food sector constitutes 50% of all Costa Rican franchises, including cafes, ice cream parlors, juice sales, restaurants and fast food places.
Another 21% of the franchises are dedicated to providing specialized services such as auto repair services, sales and installation of air conditioning, veterinary services, construction, and entertainment.
Currently, 9 of these franchises (24%) have successfully expanded their business to other Latin American countries such as Panama, Honduras, Nicaragua, El Salvador, Mexico, Colombia, Guatemala, and Ecuador. Some franchises have been able to establish in the US as well.
According to the Costa Rican Chamber of Commerce, the cost of entry varies according to the segment you choose. For instance, in the food segment, regardless of the brand you choose the costs range from $2000 to $200000, while initial investment cost goes from $20000 and $2, 5 million.
About 68% of national franchises have a positive ROI in less than two years, which is very attractive to investors.
In the case of international franchising, 105 franchises (58%) are US-based. Meanwhile, 21 (12%) franchises come from Spain, followed by franchises of Mexican and English origin, which represent 5% and 3% respectively.
Among these franchises are Depelle, All for your feet, Espresso Americano, Vellísimo and VRCMotoshop, which have successfully entered the market recently.
Spoleto, Dunkin Donuts and Hard Rock Café are among the foreign franchises that will open in Costa Rica in the following months.
Costa Rica Employment, investment and sales
An estimated of 21,332 jobs have been generated by the franchise sector in the country, out of which 15,278 were created by international franchises and 6,054 by national franchises, which represent 28% of total employment.
In fact, national franchises generated 2,054 additional jobs between 2011 and 2012, growing from the 4000 job openings identified in the Second Franchise Study in Costa Rica, conducted in 2011 by the Costa Rican Chamber of Commerce.
The franchise sector’s contribution to the Costa Rican economy is evident in terms of the employment opportunities it has generated and the investment it has made over the years, which amounts to more than $ 250 million, excluding the hotel sector.
In 2011, franchise sales represented 1.6% of Costa Rica’s GDP. International franchises generated about $ 570 million in sales, and national franchises over $ 85 million, according to data provided by the Costa Rican Chamber of Commerce.
Invest on a franchise at Expo Franquicia 2012
People interested in buying a franchise or start one on their own, will have the chance to do so at Expo Franquicia 2012, which will be held at Hotel Ramada Plaza Herradura from August 30th – 31st.
Organized by the Costa Rican Chamber of Commerce, the event will gather several national and international brands.
In addition, several financial institutions will be sharing their financing plans for this type of businesses and the Chamber will provide lectures for attendees to learn more about this type of business model.
The event is a great opportunity for those who wish to start their own businesses as well as those who are interested in selling their brand.
The Costa Rica News
San Jose Costa Rica