In Paraguay the using of franchising agreements is growing. Why is this happening?

Although in Paraguay this business model is still in development, there was a strong advance in the last three years, especially from paraguayan companies multiplying their brands using their benefits, both locally and abroad.

Successfully paraguayan companies across national frontiers in textile, food, online payment services, spas and body treatments testify that national companies are skilled ambassadors of the remarkable economic situation the country is going through.

From S&N consulting, they claim that in Paraguay, one of the fears held by entrepreneurs regarding franchising, is to see their brands going down in their competitiveness in the hands of other people.

They also argue that there are between 40 and 50 paraguayan brands and franchises that operate in and out of the country and about 130 to 150 foreign brands that sold their franchises in Paraguay.

Some suggested basic rules to keep in mind are, first, a company to be franchised market research to be a franchise, the franchise differentiate distribution contract perfectly, because confusion usually arise in this regard, then proceed to the commercialization of the franchise with a franchiser able to develop the business in a totally secure manner and eventually manage the franchise network.

In Paraguay, the franchise agreement is an atypical and nominated contract, signed by both parties, the franchisor and the franchisee, whereby the franchisor grants the franchisee the right to operate a market system of certain products and/or services, all in return for a payment.

The essential content of the contract is determined by three elements that characterize the franchise and serve to differentiate it from other similar institutions: a) BRAND: The use of a common name or shop sign and a uniform presentation of the premises and / or means of transport object the contract. b) KNOW-HOW. transmission to the franchisee of know-how (or set of knowledge or practical processes verified by the franchisor and the result of their experience c) CONTINUED SUPPORT: The continuing provision by the franchisor of commercial and technical assistance during the term of the franchise agreement.

Meanwhile, Distribution, Agency and Representation contracts are regulated by Law 194/1993, and these agreements are limited to the promotion, sale or disposal of certain products to manufacturers or foreign firms relative to natural or legal persons domiciled at home.