The franchising of goods and services, as a business pursuit transplanted into Mexico, constitutes a shining example of the country’s new economic development. This article focuses on the current status of the industry, and explores the legal and regulatory foundation of same, as of Mexico’s adopting of national policies associated with world-wide trade (beginning with membership in GATT).

After a brief review of the history behind the origins of the franchising agreement per se, and its subsequent implementation and growth within the Mexican business community at large, an analysis of applicable legislation follows. Special consideration is also given to the types of permissible franchise arrangements and their contractual classification and characteristics, under the Mexican legal system for purposes of providing the reader with a bird's eye view of how the same would be interpreted from a domestic legal point of view. Moreover, specific formality issues are addressed as are the standard covenants included within the scope of such agreements as intended to bind franchisors and franchisees, respectively. Lastly, a brief discussion regarding the industry’s evolution is included, along with an overview of certain statistics of interest, followed by a brief summary and conclusions.

Through the 1980's and 1990's the franchising industry has had few setbacks: the sheer size of the Mexican domestic market has ensured some measure of growth. Mexican consumer patterns are awakening from decades of cultural and economic protectionism, that is to say, more in line with worldwide demands for both quality, competitiveness and reliability. The franchising industry then, holds a special and very visible place in Mexico’s current development efforts, affecting both investors and consumers in a novel way.