It may not be a franchising juggernaut, but Honduras still possesses the appeal of an up-and-coming global market.
Words by Kieran McLoone, deputy editor for Global Franchise
HONDURAS IN NUMBERS
• Population: 9.9 million
• Capital city: Tegucigalpa
• GDP: $24bn
• Language: Spanish
• Area: 112,492 square kilometers
• Currency: Lempira (HNL)
Honduras may not have an official franchise association just yet, but that hasn’t stopped the country from gaining the attention of many international brands looking to penetrate an emerging market.
In fact, over 70 foreign brands currently operate in the country through numerous franchise agreements, with many focused on Honduras’ primary cities of Tegucigalpa and San Pedro Sula.
Part of this attraction comes as a result of Honduras’ high rates of education. The country has the highest Spanish-English bilingual population out of all of Central America, and the literacy rate in Honduras sits at around 88.5 per cent.
“The country has the highest Spanish-English bilingual population out of all of Central America”
Another domestic appeal is Honduras’ position in CAFTA, which is a regional trade agreement between the U.S., Guatemala, El Salvador, Nicaragua, Costa Rica, and the Dominican Republic. Agreements like CAFTA ensure that the Central American market is kept open for foreign investment, and will often mean that franchisors will target several markets within this region as part of a singular franchise agreement.
Earlier this year, this cross- border convenience led to the signing of a multi-country development agreement between U.S. fitness franchise Workout Anytime, and Honduras-based organization Lady Lee Corporation. This agreement will see Workout Anytime expand throughout Central America and the Dominican Republic, and is evidence of the franchising know-how on offer within Honduras; Lady Lee Corporation was also responsible for working with Wendy’s to bring its restaurant brand to the country in 1991.
There are a handful of factors that mean Honduras is often targeted as part of a wider franchising net, rather than solely focused on by large international brands. As well as having one of the highest rates of violence in the world, and a relatively low position on the World Bank Group’s Corruption Perception Index, Honduras is also comparatively poorer than surrounding Central American countries.
Its total GDP sits at around $23.97bn, and the country is considered a low/middle-income region with a GDP per capita of $2,080, and around 60 per cent of its population living in poverty.
Rather than completely dissuade franchisors, however, these figures should showcase the room for potential that Honduras presents. It may not be a global frontrunner in the franchising sphere, but the country has still seen many international brands find success and could act as a great springboard for further Central American development.
