In Paraguay the business model of Franchise agreements are taken an empowering stand with great receptivity by the entrepeneurs.
This business model for Paraguay has had an immense receptivity of national entrepreneurs for their low costs and the use of third-party capital , enabling the parent company grow and achieve greater recognition , with less effort.
We're talking about a relatively new model ; twelve years ago it was not typical to contract in this manner. There were previous approaches , but they were practically brand contractual loans and not a franchise agreement with everything that implies.
The national franchisor has noticed that with this format the reputation of its brand, distribution network and the demand for their products can paste a very large jump in the local market , without discarding international with moderate effort .
The bargaining model helps the franchisor to raise capital for the company, establishing a canon at the beginning of the contractual relationship with the franchisee , periodic royalties may also be established ( by type of business), or the provision of certain inputs or outputs necessary for the development of the franchised business. Another point which is not less important is that the franchisor does not lose control of the activity of the franchised business, the controls for brand, product or service will not be reduced and it has to meet the standards established by the franchisor.
Given the model, franchise agreements are being adopted increasingly by domestic entrepreneurs, today some 35 companies have opted to enter into a franchise agreements in Paraguayan territory with almost 550 establishments. Some Paraguayan companies have already taken the next step and exported, through franchise agreements, their products and/or services to Latin American countries.
It can be considered without much margin of err that several Paraguayan companies will mimic this growth model and will not be surprising that soon will be expanding to neighboring markets .