Canal-bisected Panama helps franchisors test waters
The Panama Canal’s shortcut, connecting the Atlantic and Pacific ocean, has been a boon to the shipping industry and has helped buoy the Panamanian economy. A second phase of the canal with larger locks has experienced multiple construction delays, and the opening date is now set for the second half of 2016.
Panama is the wealthiest country in Latin America (Mexico, which would have claimed that title, is considered part of North America). While the rest of Latin America suffered economically in 2015, Panama’s economy grew by almost 6 percent, and is expected to repeat that performance this year, according to the World Bank. And yet, there is still a large disparity between the rich and the poor, especially in the rural areas.
But as the participants of a franchise trade mission there in the fall of 2012 saw, Panama City, the capital, has a skyline to rival most U.S. cities.
Business attire was more formal than in other regions, and conversations took a little more time since those who didn’t speak Spanish needed to wait until the interpreter had finished relaying their previous sentence before they could move on.
Although Panama has its own currency, the U.S. dollar is the currency of choice, which makes it both convenient for shopping and paying franchise fees.
Hair Perra, vice president of Wing Zone, has had particularly good luck in Panama. “There’s no violence there,” he said. “It’s the best place to be in Central America.” He had no trouble finding a partner, but struggled a bit to find suitable real estate. “It took six or seven times to find locations,” he said. But it’s been worth it because his franchisee has signed on to also develop Guatemala and Honduras for Wing Zone.
People go to malls as much to escape the heat and humidity as to shop. But dining is plentiful. One major mall has three separate food courts, said Jeff Sinelli, CEO of Which Wich, a sandwich concept preparing to open its second location in Panama.
The service sector accounts for more than 75 percent of the GDP, according to the U.S. Commercial Service’s business brief. Some concerns include higher minimum wage than in other Central American countries and a difficulty finding trained English-speaking employees. But, as with many international endeavors, franchisors find the end result can be worth the time and expense. You just have to put in the effort.