Doing Business in Colombia …
The franchises or foreign brands that want to land in Colombia through a key ally such as a Master Franchisee, a multi-Franchisee or a Franchisee in Colombia, must take into consideration the Latin American culture and specifically the Colombian one. To be successful, they will need to try to identify and select the candidate they are looking for, with the right experience and capabilities, and therefore the sustainability of their franchise or license network in Colombia.
Below: the PROS (what to do) for licensors to do business in Colombia applying best practices:
1º. Provide the franchisee/ licensee with all the commercial, financial and business information so that they can analyze it and have a comprehensive knowledge of the operation, the operation of the business and the possible financial results before acquiring the franchise or license, and also during the operation of the same. It is important they have enough elements when selecting and buying the franchise to use the trademark to create it in Colombia.
2º. The foreign licensor/franchisor must analyze the Latin American market, and especially the Colombian market, in order to customize and adapt its products or services to the needs of the market, considering the characteristics of the Colombian population and its idiosyncrasies.
3º. In Colombia, trust is very important, so a good practice is to dialogue with potential franchisees/licensees about the franchise/license in a close and trusting way, generating a deeper personal relationship.
4º. Gifts are well received by Colombians; no matter the value of these, Colombians take into consideration a gift for the detail involved in buying it and giving it to them. It looks good to bring a gift to each of the licensees/franchisees with whom you are going to negotiate the franchise/license.
5º. A good practice to close negotiations is to always keep in mind that for Colombians the agreement depends on the personal relationship, a trusted bond that has been built between both parties. Colombia is a culture familiar with uncertainty, so the agreement between the parties is considered a personal commitment.
6º It is important to consider that haggling is common when doing business in Colombia and that an eventual and lasting profit will always be on the minds of Colombians when they are closing any negotiation.
Below, the CONS (what not to do) in best business practice in Colombia:
1º Being arrogant. Colombians value the knowledge of those who come from foreign markets, but they also want to feel equal. It is important to keep in mind that you must be as helpful, friendly and open as Colombians are.
2º It is advisable not to ‘despair’ if the Colombians are not precise in solving each of the points of the negotiation. This is a process that can take a long time to resolve, but it will continue during the negotiation.
In Colombian culture, not every aspect is usually specified, it is more of a global negotiation to start with.