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Franchising
A Top U.S. Export Prospect for Panama

May 2013

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Market Estimates

(in US$ millions)

2011

2012

2012est

2013est

Total Market Size

$99

105

115

134

Total Local Production

11

12

14

18

Total Exports

0

0

0

0

Total Imports

88

93

101

116

Imports from the U.S.

80

85

92

105

The above statistics are unofficial estimates.

Overview

The Franchising sector in Panama offers excellent opportunities for U.S. companies. Panama is highly receptive to U.S. franchise concepts and the economy is showing excellent and consistent growth.

Foreign franchises comprise 95 percent of the total number of franchises in the country. The U.S. is the market leader but competition is increasing from other countries such as Colombia, Guatemala, El Salvador, Mexico, and some European countries. Competitive prices, product quality, and strong promotion are the main factors determining successful market penetration. There are no major restrictions for franchise operations in Panama. Because the U.S. Dollar is legal tender in Panama and there are well-developed banking systems, business transactions are substantially easier than in other countries. Most banks are familiar with the franchise business.

Sub-Sector Best Prospects

The market is continuing a diversification trend with new franchises entering the market in different sectors such as house cleaning, security services, beauty services, flower arrangements, mail, and packaging services.

Opportunities

For historical reasons, Panamanians are receptive to U.S. culture and American business. U.S. franchises are well regarded and accepted in Panama. Many Panamanian have traveled to the U.S. and are familiar with U.S. franchise concepts. In addition, Panama has become a regional shopping destination for many Latin Americans, with a steady stream of foreign visitors in Panama’s growing malls. As a result, there is significantly greater purchasing power in the franchise space, particularly in restaurants, than Panama’s own income distribution and small population would at first indicate.

Web Resources

For More Information

The U.S. Commercial Service in Panama can be contacted via e-mail at: Enrique.Tellez@trade.gov;

Phone: 011-507-317-5080; or visit our website: http://www.export.gov/panama.