Por Yeimi Torres
Jorge Valencia, or El Zar de las Franquicias (the Franchise Tsar), as he is known internationally, was born in Cholula, Mexico. A seasoned businessman, he has over 30 years of experience in the franchise industry, but is also a man with many layers. He identifies as a mama’s boy, a fan of his dog Logan, happily married to Angelica for 10 years, a cinephile, music lover, Beatles fan, and a Dallas Cowboys fanatic. He is an industrial engineer by profession, holds masters’ degrees in business administration and finance, and has several diplomas in marketing, family businesses, among other roles.
Having been a franchisor and franchisee, certified as a Certified Franchise Executive (CFE), and having extensive experience in franchises, Valencia decided to become a franchise consultant for those who wanted to invest in a franchise. In that role, he met the Franchise King and realized that his services were similar to the ones he was offering. That’s when he decided to become more than just a king and emerged as the ‘Franchise Tsar’. “My purpose was not to show off with the title of ‘Tsar’, but rather to attract and protect franchisees from bad franchises owners,” he explained.
FM: What are some common challenges that Latino franchisees face and how can they be addressed?
JV: There are different barriers, but among them, paperwork stands out. Contracts made by Americans are often highly structured, with multiple rules, complex manuals, and processes. Latinos are not used to following strict rules or reading manuals, so there is a significant opportunity to adapt and succeed by providing support and guidance.
Another limitation is that “Americans prefer doing business with other Americans,” which is why there are currently few Latinos in large chains. This can be addressed effectively through organizations like the Latino Franchise Association (LFA), which not only provides education but also supports and develops more Latino franchises and franchisors, creating a cycle of growth within the Latino community.
FM: Can you provide an overview of the Latin American franchise industry and its current trends?
JV: After participating in research studies on franchises in Latin America, we discovered interesting data about the current market situation. Only 4% to 6% of franchises survive for 10 years or more and/or have more than 100 units. The majority (75%) of franchises are young, with less than 5 years in the market and fewer than 10 units, but with a high mortality rate mainly due to a lack of preparation. There are also mature national franchises with 20-60 units that are in the process of institutionalization, and finally, there are Pro franchises that handle successful international brands such as Segway, McDonald’s, etc. As for trends, there are over 200 franchise categories, and the restaurant sector, which used to dominate the industry, has been partially displaced. Now there is a positive shift towards health, children, and education-related franchises.
FM: How do marketing and advertising strategies differ when targeting potential Latino franchisees?
JV: When selling franchises to Latinos, the approach needs to be different compared to Americans who prefer numerical data and performance metrics. With Latinos, the focus should be on connecting emotionally and appealing to their passions. “Find people who want to tattoo the brand, who feel comfortable with the business concept. Sometimes people make purchases out of passion, not just numbers, they don’t even see the contract, but if they like the colors and the message is right, they connect with it.”
FM: How can Latin franchise companies contribute to economic growth and the development of Latino communities?
JV: The franchise model has been an incredible business accelerator in the last five decades, allowing for rapid expansion of units and creating jobs with social security, training, and opportunities for new franchisees. This model also contributes to economic development, tax revenue, and growth for suppliers linked to the brand.
The concept of “social franchising” has been implemented in some countries like Mexico, where particular groups such as coffee farmers, dairy farmers, and seamstresses are involved.
FM: What do you think about the launch of the Latino Franchise Association in the US, and what are your expectations as a speaker in it?
JV: I am thrilled to participate in the Franchise Expo events! My expectation is that the Latin American brands I represent and myself can network effectively and leave a positive impact for their future growth. I want to introduce the brands from El Instituto Latino Americano de La Franquicias and support the development of the Latino Franchise Association, so that the Latino community sees me as a gateway to get closer to the association and promote it worldwide. As a speaker, I am excited to speak about franchises in Latin America. I will emphasize the importance of investing in the US and our region. Latin America is a huge market that is often overlooked!
