Can or should franchisors expand in Cuba with the reboot of the Obama administration?
With all this talk about better relations with Cuba, the Obama Administration has some corporate leaders licking its ribs with possible future opportunities, but before you start salivating, let’s talk reality. The reason I’m saying this is because I was listening to some attorneys in the franchise industry discussing this recently.
In fact, some franchise lawyers are embarrassed at the idea of their clients going to Cuba to expand their business models, and I usually agree, but why not? Other nations are also corrupt, it is a fact of doing international business; So what should a franchisor do? Still, before we answer that, let’s consider a few issues before us.
Strafor Geo Political News notes in an article on December 17, 2014 titled; “The United States and Cuba are beginning to reestablish relations,” explains some of what is behind all this and why it could be a short play, with some positive long-term implications.
On December 19, 2014, the New York Times published an article titled; Julie Creswell’s “Exploration Opportunities for US Companies in Cuba”, who stated; “American companies were quick to put plans in place to bring products and services to a market they hadn’t been in for most of 50 years, if ever,” but is this really accurate?
Some of the big media bombings were exaggerated and too many politicians intervened, remember that this was more or less an exchange to free an American being helped by the Cuban government and it was a gesture and an exchange for someone in prison here who they wanted. back, so there is that aspect.
A franchise attorney stated, “How are future US franchisors going to deal with having their future franchisee partly owned by the government, allowing their workers to earn just $ 20 a month from now on? rising prices and rising wages?
In fact, a question, I would also like you to answer me, that is, where is the opportunity considering that reality? In addition, it was pointed out that the Cuban government pays people in their currency; Pesos – and for an amount of approximately $ 1.00 per day in our currency. Do you still think that you want to settle in a nation with an economy like that? Plus, corruption and theft are the norm, so why would a decent American company want to get involved? The right to brag. Sorry, that just doesn’t work for me.
Finally, our change from harsh economic sanctions in Cuba will not extend to all sectors, and certainly not to franchises, especially not in a fast time table, maybe in 10 years “YES” everything is fine, but does not contain the breathing. . Right now, Cuba is still listed as a “state sponsor of terrorism” by the US, so think about it, this is a country run by a corrupt government, a police state, and it makes a profit, if you want it, it’s a communist. country and they disapprove of that, unless it’s the government itself. Consider all of this and think back to 2015.