Dominican Republic - FranchisingD.R. - Franchising
Franchising is a familiar and highly successful concept in the Dominican Republic and enjoys a long history. However, early ventures into the DR market in the 1970s by Kentucky Fried Chicken and Howard Johnson’s Ice Cream were initially unsuccessful, and the concept took several years to gain traction. By the late 1980s, the franchise phenomenon was flourishing, although confined principally to the fast food sector.
From 1995 until recently more franchises have been established in a wide variety of industry sectors. As the DR economy began to rebound from a period of crisis in 2003-2004, investors perceived the possibility of an increase in demand and started to explore new business opportunities. Franchising was viewed as a quick and simple way to develop these opportunities.
The implementation of CAFTA-DR in 2007 presented new prospects for franchising in the DR, as it allowed franchisors to avoid the application of Dominican Law 173 on the Protection of Agents and Distributors.
Overview:
The franchising sector has matured and consolidated in the past several years, constituting a thriving sector in the Dominican economy. Large Dominican business groups are key players in the franchising industry and the profile of the business has improved and has more credibility.
Franchises have increased their presence throughout the nation. Though the bulk are in the Santo Domingo area (44%), they also have a noteworthy presence in other areas of the country, including: Santiago and the North (21%); the South (16%); and the East (19%). Franchises have a considerable impact on the economy, with over 8,0o0 points of sales and over 76,000 jobs created.
U.S. franchises have a dominant position accounting for 45 percent in the Dominican market. Local, Dominican franchises account for another 40 percent of the market, and the remaining 15 percent is comprised somewhat evenly among the following three groups: Spain & Europe, Venezuela & South America, and Canada & others.
As a mature market, a variety of franchises are already present in the Dominican market from the following industry sectors: restaurants (35%); retail sales (25%); services (20%); education (7%); personal care (5%); entertainment (3%); and others (5%). A marked slowdown in the introduction of new food franchise concepts indicates the maturation and potential slowdown in this particular segment of the franchise market. The consumables used by the franchises are 60 percent locally sourced and 40 percent imported.
Dominicans feel more comfortable doing business with a franchisor today than years ago. The success stories of reputable franchise companies already in operation add to the confidence of entrepreneurs.
Some of the many franchise concepts present in the market include:
Food: KFC, Taco Bell, Burger King, McDonald’s, Domino’s Pizza, TGI Friday’s, Pizza Hut, Tony Roma’s, Baskin Robbins, Quizno’s, Krispy Kreme, Hooters, Papa John’s, Little Caesar’s, Sweet Frog, Chili’s, Wendy’s, P.F. Chang’s and Applebee’s.
Furniture: Baker, Ethan Allen, Sealy Mattress, Serta, Simmons, Thomasville, and Ashley Furniture.
Physical Fitness: Gold’s Gym and Planet Fitness.
Real Estate: Century 21, Coldwell Banker, Re/Max.
Apparel: Forever 21, Nautica, Tommy Hilfiger, Guess, Polo Ralph Lauren, VS, Perry Ellis, Nike, among others.
Other Services: Dry Clean USA and Heel Quick.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
From 1995 until recently more franchises have been established in a wide variety of industry sectors. As the DR economy began to rebound from a period of crisis in 2003-2004, investors perceived the possibility of an increase in demand and started to explore new business opportunities. Franchising was viewed as a quick and simple way to develop these opportunities.
The implementation of CAFTA-DR in 2007 presented new prospects for franchising in the DR, as it allowed franchisors to avoid the application of Dominican Law 173 on the Protection of Agents and Distributors.
Overview:
The franchising sector has matured and consolidated in the past several years, constituting a thriving sector in the Dominican economy. Large Dominican business groups are key players in the franchising industry and the profile of the business has improved and has more credibility.
Franchises have increased their presence throughout the nation. Though the bulk are in the Santo Domingo area (44%), they also have a noteworthy presence in other areas of the country, including: Santiago and the North (21%); the South (16%); and the East (19%). Franchises have a considerable impact on the economy, with over 8,0o0 points of sales and over 76,000 jobs created.
U.S. franchises have a dominant position accounting for 45 percent in the Dominican market. Local, Dominican franchises account for another 40 percent of the market, and the remaining 15 percent is comprised somewhat evenly among the following three groups: Spain & Europe, Venezuela & South America, and Canada & others.
As a mature market, a variety of franchises are already present in the Dominican market from the following industry sectors: restaurants (35%); retail sales (25%); services (20%); education (7%); personal care (5%); entertainment (3%); and others (5%). A marked slowdown in the introduction of new food franchise concepts indicates the maturation and potential slowdown in this particular segment of the franchise market. The consumables used by the franchises are 60 percent locally sourced and 40 percent imported.
Dominicans feel more comfortable doing business with a franchisor today than years ago. The success stories of reputable franchise companies already in operation add to the confidence of entrepreneurs.
Some of the many franchise concepts present in the market include:
Food: KFC, Taco Bell, Burger King, McDonald’s, Domino’s Pizza, TGI Friday’s, Pizza Hut, Tony Roma’s, Baskin Robbins, Quizno’s, Krispy Kreme, Hooters, Papa John’s, Little Caesar’s, Sweet Frog, Chili’s, Wendy’s, P.F. Chang’s and Applebee’s.
Furniture: Baker, Ethan Allen, Sealy Mattress, Serta, Simmons, Thomasville, and Ashley Furniture.
Physical Fitness: Gold’s Gym and Planet Fitness.
Real Estate: Century 21, Coldwell Banker, Re/Max.
Apparel: Forever 21, Nautica, Tommy Hilfiger, Guess, Polo Ralph Lauren, VS, Perry Ellis, Nike, among others.
Other Services: Dry Clean USA and Heel Quick.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.