Honduras
Franchising

Discusses opportunities for U.S. franchisers and legal requirements in the market.

Last published date: 2019-10-13

Franchising continues to be an attractive business concept in the Honduras market, with over 80 foreign firms operating under franchising agreements. The majority are in the fast-food and casual dining sectors, with leading brands such as Denny’s, Chili’s, T.G.I. Friday's, Johnny Rockets, Carl’s Jr., Pizza Hut, Burger King, McDonald's, Wendy's, Subway, Church's Chicken, UNO Chicago Grill, Cinnabon, Auntie Anne’s Pretzels, Popeye's, Domino's Pizza, Quiznos, Dunkin Donuts/Baskin-Robbins, Little Caesar's and Kentucky Fried Chicken (KFC) serving local consumers. Other industries operating franchise systems in Honduras include automotive aftermarket services, retail, clothing, movies and entertainment, children’s services, cleaning and pest control, health and fitness, electronics, cosmetics and toiletries, business services, convenience stores, dry-cleaning, specialized tutoring, car rental, hotels/motels and hospitality. Demand in this sector has generally been spurred by local need for fast service, convenient hours and locations, changing consumer preferences, quality products, and most importantly, good customer service.

Franchising in Honduras presents opportunities for growth and expansion of U.S. business. Regional stability and increased investor confidence have contributed directly to the broad availability of U.S. franchises in various economic areas. For franchisers in Honduras, positive market entry factors include availability of suppliers and personnel, absence of trade barriers, and high receptivity to U.S. goods and services (especially if no equivalent local product or service exists). In addition, the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) and the Honduran Investment Protection and Promotion Law of 2011 provide for national treatment for most foreign direct investment, guaranteeing foreigners the right to freely establish, acquire, and dispose of interests in business enterprises within constitutional bounds.

Finding the right partner will determine the ultimate success or failure of a franchise venture in Honduras, so potential franchisees must be carefully selected. The most promising candidates are those with proven financial resources who have already established a successful business in the country.