U.S. Franchising Blooms in Bogota
Bogota, the stylish capital of this stunning Latin American country, is perched 8,000 feet above sea level, at a much greater elevation than mile-high Denver or the highest peak in Africa, Mt. Kilimanjaro. According to reports from the U.S. Franchise Trade Mission to Latin America, Bogota’s altitude may hint at the heights U.S. franchising can reach in this booming country of more than 46 million.
RadioShack made national news during the trade mission co-hosted by the International Franchise Association, the U.S. Commercial Service, and Franchise Times in late August with a ribbon-cutting at its first store in Colombia. It didn’t hurt that the Deputy Chief of Mission at the U.S. Embassy here, Perry Holloway, wore the RadioShack uniform as a store employee early in his career and continues to be a fan. “Can we look around the store?” he asked, waving off reporters and other officials during the visit as his eyes crawled over walls of gadgets and electronic gear.
RadioShack, now operating in 31 countries with development underway in a total of 40, has ambitious plans, including being the world’s number-one battery retailer.
“Wherever a battery is sold, we’d like it to be a RadioShack battery,” said Marty Amschler, Vice President of Global Franchise for the company. “Batteries are universal, like many of our products,” Amschler adds. He and his partner Benjamin Simon, Senior Director of International Development, have spearheaded global development for the electronics powerhouse, establishing a significant footprint and revenue streams at a feverish pace. But, please, don’t call either one an Energizer bunny.
The trade mission got an extra charge from Nicole DeSilvis, Commercial Attaché at the U.S. Embassy in Bogota, whose thousand-watt smile led the 25 brands, all IFA members, into the tony El Nogal Country Club – 12 stories of luxurious meeting rooms, restaurants, an Olympic-size indoor swimming pool, world-class fitness facilities and an art gallery.
Ambassador Michael McKinley, juggling calls from his cel phone as reports of renewed peace talks with the rebel group FARC presented a possible breakthrough on a long-running challenge in the country, pivoted from the political to endorse the franchise trade mission. “There is a revolution in retail in Colombia,” he said. “You will find business partners who are willing and able, and you will continue to have our full support.”
Despite challenges like security and lingering poverty, Colombia is the fourth-largest oil producer and the number-one coffee producer in Latin America, with an economy that expanded by 7.7 percent in the third quarter of 2011, projecting growth of nearly six percent this year.
In the El Nogal Club, the fruits of the expanding economy could be seen, with Hermès ties almost standard and a suit-and-tie-only dress code reflecting Colombia’s formal business culture.
Bogota was a big hit for FOCUS Brands, whose Latin America development will now be spearheaded by Keith Carleton, Director of International Business Development. Scott Chorna continues in a similar role focused on Asia, the Middle East and Africa. “We’ve been pleasantly surprised not only by the number of appointments but the quality of the prospects,” Carleton said.
Cinnabon and Auntie Anne’s are already established on the continent, as they are around the world. The pretzel “is a blank canvas,” Carleton says, “so regionally, you can adapt it with sugar, “dulce de leche,” (caramel in Spanish) and other local flavors. In Asia, he says, a dried seaweed topping is sometimes used in place of salt.
“We need to protect the heritage and consistency of the brand, but we recognize that customers may prefer other flavors and other sizes, and we encourage that,” Carleton said.
Whereas Moe’s Southwest Grill is a more complicated concept with larger start-up costs, Carleton points out a similar Latin American concept call Tommy Beans that is fairly well established. The competition doesn’t worry him. “We can point out that our quality and our brand representation are superior,” he said.
Popeyes Louisiana Kitchen’s Tim Waddell feels similarly about a local brand offering fried chicken in Colombia. “We think Frisby really needs some competition,” Waddell said, referring to a chain with 100 restaurants in 24 Colombian cities.
The Commercial Attaché agreed. “No question about it,” said DeSilvis, a cheerleader for U.S. franchising in Colombia, who just extended her tour of duty in the country.
The hunger for U.S. food brands is so strong that Hair Parra of WingZone signed a master franchise agreement for the country before the trade mission ever touched down in Bogota. Investors contacted Parra, an owner of the company, after reading about the trade mission and calling U.S. Embassy officials.
“The groups we’ve seen have been very good,” Parra said. He estimated that 90 percent of the candidates interviewed in Colombia were qualified.
“We are so pleased with the overall resounding success of the franchise trade mission as the key objectives were met,” said DeSilvis. “The excitement in U.S. franchising that this mission has stirred has been exceptional and we look forward to riding this wave as far as it will take us. Franchising is on the tip of everyone’s tongues right now and the U.S. Commercial Service, IFA and Franchise Times are proud to have spurred this flurry of interest in the South American market.”