Updated on 02/15/2024
A. Macro-economic data
- General data[1]
2022 population: 45,892,285[2]
Area: 2,780,400 km2
Density: 16.51 inhabitants/km2[3]
GDP (nominal) 2022: $631 bn[4]
GDP/capita 2022: $13,650.6[5]
GDP (PPP) 2022: $1.226 bn[6]
GDP (PPP)/capita 2022: $26,530.3[7]
2021 growth rate: 10.4%
GNI/capita (PPP) 2021: $23,170
HDI 2021: 0.842
Literacy rate: 98%
Life expectancy 2022: 75.5 years
Foreign investment
Economic development
A member of the G20 and Mercosur (the economic alliance between Brazil, Argentina, Paraguay and Uruguay), Argentina is Latin America's 3rd largest economy, behind Brazil and Mexico.
Argentina has undergone several crises, after experiencing strong growth in the first decade of the 21st century. First of all, the political crisis in Venezuela caused strong migration to Argentina. Falling commodity prices caused two recessions in Argentina, in 2014 (growth down 2.5%) and 2016 (growth down 2.3%).[12]
The inflation rate has exacerbated the country's economic crisis. As early as 2014, the inflation rate was 29.3%.[13] Since 2018, Argentina's currency has been falling in value. At the time, the former government had asked the IMF for an aid program. The IMF granted $56.3 billion in aid over three years.[14]
However, inflation continued to rise, reaching 94.8% in 2022.[15] GDP growth was still strong in 2021 (+10.4%), whereas the Covid 19 health crisis had caused the economy to shrink by -9.9% .[16]
The unemployment rate for 2022 was 7%. Argentina's public debt amounted to 154.5% of GDP in 2023.[17]
Population
Argentina is the 8th largest country in the world in terms of surface area.[20] Argentina has the 4th largest population in Latin America.[21]
92% of Argentina's population is urban.[22]
Argentina's ten most populous cities are Buenos Aires (15,172,700 inhabitants), Cordoba (1,612,100 inhabitants), Rosario (1,339,500 inhabitants), Mendoza (1,053,500 inhabitants), San Miguel de Tucuman (902,200 inhabitants), La Plata (852,800 inhabitants), Salta (644,000 inhabitants), Mar del Plata (626,300 inhabitants), Santa Fe (540,200 inhabitants) and San Juan (512,000 inhabitants)[23] .
Policy [4]
Argentina is a semi-presidential republic. At the time of writing, Javier Milei, of the far-right party, has been the President of the Republic since his inauguration on December 10, 2023.[8]
Javier Milei's proposals include the "dollarization" of the Argentine economy, replacing the Argentine currency with the dollar, and the closure of the central bank.[9]
Since the election of Javier Milei, there have been political disagreements between the government and the governors of Argentina's provinces, not least due to the fact that certain federal funds for the provinces have been suspended, arbitrarily according to the provincial governors. Tensions are currently at their highest between Ignacio Torres, Governor of Chubut province, and the national government. Indeed, after the national government suspended the payment of $15.7 million to the province of Chubut, Ignacio Torres threatened to stop the shipment of hydrocarbons (oil and gas) across the country, even though the province of Chubut is Argentina's second-largest oil producer and third-largest gas producer.[10]
Before Javier Milei came to power, Argentina wanted to make its mark on the international stage. To this end, Argentina hosted the WTO ministerial meeting in 2017, the Youth Olympic Games in 2018 and presided over the G20 in 2018.[11]
Resources
Argentina's main resources are mining (copper, zinc, iron, gold, silver), hydrocarbons (oil and shale gas), agriculture (wheat, flax, corn, cattle, sugarcane, cotton, tobacco, wine) and manufacturing industry (automobiles, household appliances)[18].
Tourism in Argentina generated $1.7 billion in 2020.[19]
[1] Unless otherwise stated, the data below is sourced from l’Atlas socio-économique, Larousse, édition 2024
[2] Source : indec
[3] Source : CITY POPULATION
[4] Source : Groupe de La Banque Mondiale
[5] Source : Groupe de La Banque Mondiale
[6] Source : Groupe de La Banque Mondiale
[7] Source : Groupe de La Banque Mondiale
[8] Source : Ministère de L'Economie, Des Finances et de L'Industrie
[9] Source : Challenges
[10] Source : France 24
[11] Source : Ministère de L'Europe et des Affaires Etrangères
[12] Source : Ministère de L'Europe et des Affaires Etrangères
[13] Atlas socio-économique des pays du monde, Larousse, édition 2024
[14] Source : Ministère de L'Europe et des Affaires Etrangères
[15] Source : Ministère de L'Economie, Des Finances et De L'Industrie
[16] Same
[17] Ibid
[18] Source : Larousse
[19] Atlas socio-économique des pays du monde, Larousse, édition 2024
[20] Source : Ministère de L'Economie, Des Finances et de L'Industrie
[21] Same
[22] Atlas socio-économique des pays du monde, Larousse, édition 2024
[23] Source : CITY POPULATION
[24] Source : B'TRADE
[25] Same
I. Economic data
B. Economic data specific to franchising
Historical background
Franchising was launched in Argentina in 2003, and has since enjoyed strong growth of 70%, not least because Argentines were withdrawing their savings from banks due to the country's unstable economic situation, and investing their money in their own businesses.
Institution
Argentina created the Argentine Association of Brands and Franchises (AABF) in 2009, following the merger of the Argentine Franchise Association and the Chamber of Major Brands. The aim of this merger was to standardize the business and promote the strengthening and professionalization of the franchising system.[26]
The AABF has drawn up its own code of ethics, binding on its members.[27]
Contract content
The average investment to set up a franchise in Argentina is $50,000. Franchise fees are around $30,000.[31]
In principle, a franchise agreement cannot be shorter than four years, as explained below.
Trade shows
For the 29th consecutive year, the AABF is organizing the Argentine Franchise Fair, from May 30 to 31, 2024, in Buenos Aires. The show usually welcomes over 200 national and international franchise brands, and more than 2,700 visitors.[28]
Statistics
South Africa has around 800 franchise systems, spanning 14 sectors [23]. In 2018, there were 45,011 outlets in South Africa. 84% of franchisees rate their relationship with the franchisor as very good or good [24].
South Africa is now home to 68,000 franchisees [25]. 40% of them are based in the Gauteng province [26].
The biggest sector in the franchise business is fast food. South Africa has around 85,000 restaurants and over 850 franchises. The international food market is estimated to be worth $4.9 billion by 2026 [27].
In 2022, South Africa had 1,907 businesses and companies in a state of bankruptcy [28].
Statistics
Argentina boasts over 1,628 franchised brands and some 46,000 sales outlets.[30]
Some 163 new brands took up the commercial franchise format in 2022.
By 2022, 41% of franchise networks were operating in the food sector, 23% in specialized retailing, 10% in clothing and fashion, 7% in beauty and health, and 6% in training.
93% of franchised brands grew their networks in 2022. In Argentina, for example, some 5,400 sales outlets were created in 2022.
The average number of employees per outlet has gradually fallen, from an average of 6.4 in 2016 to 5.1 in 2022.
68% of franchised brands surveyed by the AABF said their business levels had outpaced pre-pandemic levels.
Economic impact
The franchising sector accounts for 2% of Argentina's GDP and directly employs over 232,800 people.[32] Between 2021 and 2022, the number of jobs created by franchising increased by 9%.
International
Over 70% of franchises are national businesses.[33]
[26] Source : AAMF
[27] Source : AAMF
[28] Source : Expo Franquicias
[29] Sauf indication contraire, les informations ci-dessous proviennent de AAMF
[30] Source : AAMF
Applicable legislation
Argentina has no specific franchise legislation. The Argentine Civil and Commercial Code applies to the franchise sector. In 2015, franchise-specific provisions were incorporated into Title IV, Book III of the Argentine Civil and Commercial Code.
Franchising is now defined by Section 1512 of the Argentine Civil and Commercial Code, which states that a commercial franchise exists when one party, called the franchisor, grants another party, called the franchisee, the right to use a proven system designed to market certain goods or services under the franchisor's trade name, emblem or trademark, which provides a body of know-how and ongoing technical or commercial assistance, in return for direct or indirect performance on the part of the franchisee.
The same section states that the franchisor must be the sole owner of all intellectual property rights.
Section 1520 of the Argentine Civil and Commercial Code specifies that the parties to a franchise contract are independent of each other. The franchisee must therefore clearly state their independent status on invoices, contracts and all other commercial documents.
Jurisdiction and applicable law
Argentina has ratified the 1958 New York Convention[34] facilitating the recognition and enforcement of foreign arbitral awards.
Pre-contractual information
Section 1514 of the Argentine Civil and Commercial Code requires franchisors to provide pre-contractual information to prospective franchisees.
Thus, before entering into a contract, the franchisor must provide the franchisee with economic and financial information on the development over two years of units similar to the one offered under the franchise and which have been operating for a sufficient period in Argentina or abroad.
Trademarks
Trademark law is governed by the Trademarks and Designations Act[35] ("Ley de Marcas y Designaciones").
Ownership of a trademark is obtained by registering it with Argentina's National Institute of Industrial Property[36].
Once registered, the trademark is protected for ten years. Trademark registration is renewable indefinitely (Section 5 of the Trademark and Designation Act).
Argentina is a party to the Paris Convention for the Protection of Industrial Property, under which each contracting State grants the same protection to nationals of other contracting States as it does to its own nationals.
To go further
In Argentina, trademark applications are managed nationally. The examination process includes both formal (correct scope, etc.) and substantive (previous third-party trademarks/rights, oppositions) evaluations. Only mono-class registrations are allowed. Usage is required five years after the registration date. To develop a franchise in this country, it is advisable to cover "Business assistance relating to franchising" and "retail services" which are both accepted under class 35 by the trademark office. Regarding the franchising agreement's recordal, it is not compulsory though advisable for legal advantages.
Contract perfomance
The obligations of franchisors and franchisees are also set out in the Argentine Civil and Commercial Code.
The franchisor's obligations are set out in Section 1514 of the Argentine Civil and Commercial Code.
The franchisor must provide the franchisee with all the technical knowledge, whether or not patented, derived from the franchisor's experience and verified by the franchisor as being suitable for operating the franchised system.
Furthermore, the franchisor must provide the franchisee with an operating manual containing all the specifications needed to carry out the business provided for in the contract; provide technical assistance to ensure the best possible operation of the franchise during the life of the contract; ensure the supply of goods or services, where applicable, of good quality and at reasonable prices, in accordance with local or international trade practices and customs.
The franchisee's minimum obligations are set out in Section1515 of the Argentine Civil and Commercial Code. The franchisee must develop the business included in the franchise effectively, comply with the specifications of the operating manual and those provided by the franchisor as part of its duty of technical assistance; provide the information that the franchisor reasonably needs to understand how the business is developing and allow such inspections as agreed or appropriate for the franchise’s aims and purposes; refrain from doing anything likely to jeopardize the profile or prestige of the franchise system or intellectual property rights, and cooperate in the protection of these rights; comply with any commitment to contribute, which may include contributions to developing the market or techniques related to the franchise; keep the reserved information that makes up the body of technical knowledge transmitted confidential, and ensure confidentiality with regard to persons, whether dependent or not, to whom such information must be disclosed for the development of the business. The latter duty also applies once the contract has expired.
In principle, the term of a franchise agreement may not be less than four years, in accordance with Sections 1506 and 1516 of the Argentine Civil and Commercial Code. However, Section 1516 specifies that a shorter period may be contractually agreed, if the period relates to special situations such as trade fairs or conferences, or activities carried out within properties or companies.
In principle, a franchise agreement is impliedly renewed for one year at the end of the term, unless expressly terminated by one of the parties at least thirty days before the expiry date.
From the second renewal onwards, the franchise contract becomes an open-ended contract.
Under Section 1517 of the Argentine Civil and Commercial Code, franchises are exclusive for both
parties. Consequently, the franchisor cannot authorize another franchise unit in the same territory without the franchisee's agreement. The franchisee, for their part, must operate only within the licensed territory. The parties may contractually exclude rights of exclusivity.
II. Legal information
A. Legal information directly related to the franchising
[34] New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958
[35] Law n°22.362
[36] Av. Paseo Colón 717, Ciudad Autónoma de Buenos Aires, adresse e-mail : infoinpi@inpi.gob.ar
Competition law
Franchise agreements must comply with Argentine competition law, which is governed by the Defense of Competition Act[37] ("Ley de Defensa de la Competencia").
Section 1 of the Defense of Competition Act prohibits agreements between competitors, acts or any other behavior, related to the production of a good or service, which have the purpose or effect of limiting, restricting or distorting competition, in such a way that could result in harm to the general economic interest.
More specifically, according to Section 2 of the Defense of Competition Act, agreements between two or more competitors, taking the form of a contract or arrangement, the aim or effect of which consists of:
- agreeing directly or indirectly on the sale or purchase price of goods or services at which they are supplied or demanded in the market;
- establishing obligations to produce, process, distribute, purchase or market only a restricted or limited quantity of goods, and/or to provide a restricted or limited number, volume or frequency of services;
- allocating, dividing, assigning or imposing horizontal areas, portions or segments of markets, customers or sources of supply;
- establishing, organizing or coordinating positions or abstentions in invitations to tender, competitions or auctions.
The national authority responsible for ensuring compliance with competition law is the National Directorate of Anti-competitive Practices (NDAP). This authority can receive complaints, undertake investigations on its own initiative, order the cessation of practices and impose sanctions where appropriate.[38]
Special provisions for foreign investments
The Foreign Investment Act[41] ("Ley de inversiones extranjeras") governs foreign investments.
Under Section 1 of the Foreign Investment Act, foreign investors will be treated in the same way as domestic investors, if they invest in one of the forms set out in Section 3 of the said Act either for promoting economic activities, or expanding or improving existing economic activities.
Section 3 specifies that foreign investments may be made in freely convertible foreign currencies; in capital goods, spare parts and accessories; in profits or capital contributions in domestic currency, provided they can be legally transferred abroad; in capitalization of external credits in freely convertible foreign currency; in intangible assets, in accordance with specific legislation.
Applicable legislation
-
Argentine Franchise Association: http://www.aamf.com.ar;
-
National Institute of Statistics and Censuses : INDEC: Instituto Nacional de Estadística y Censos de la República Argentina;
-
Intellectual property: https://www.argentina.gob.ar/inpi;
-
Personal data: https://www.argentina.gob.ar/aaip;
-
Competition: https://www.argentina.gob.ar/defensadelacompetencia;
-
Legislation: http://www.infoleg.gob.ar/;
-
World Bank: https://donnees.banquemondiale.org/.
Personal data
In 2000, Argentina adopted the Personal Data Protection Act[39] ("Ley de proteccion de los datos personales").
Section 2 of the Personal Data Protection Act defines personal data as information of any kind referring to specific or determinable natural persons.
Section 4 of the Personal Data Protection Act specifies that personal data collected for processing must be relevant and not excessive in relation to the purpose for which it is collected. In addition, personal data must be accurate and updated where necessary.
The data subject has a right of access to their personal data held by the data controller.
To be lawful, the processing of personal data must be carried out after obtaining the written consent of the data subject (or by some other means that can show free and informed consent). However, paragraph 2 of Section 5 specifies that consent is not required when:
- data is obtained from unlimited public access;
- data are collected for the performance of functions inherent to the powers of the State or by virtue of a legal obligation;
- processing is a list whose data is limited to name, national identity card, tax or social security identification, profession, date of birth and address;
- the data processing arises from a contractual, scientific or professional relationship with the owner of the data and is necessary for development or fulfillment thereof;
- processing is an operation carried out by financial entities and the information they receive from their customers.
The competent authority for data protection in Argentina is the Agency for Access to Public Information (AAPI).[40]
B. Peripheral legal data
[37] Law n°27.442
[38] Source : Argentine.gob.ar
[39] Law n°25.326
[40] Av. Pte. Gral. Julio A. Roca 710, piso 2 - Ciudad Autónoma de Buenos Aires, adresse e-mail : info@aaip.gob.ar
[41] Law n°21.382
I. Economic data
A. Macro-economic data
- General data[1]
-
2022 population: 45,892,285[2]
-
Area: 2,780,400 km2
-
Density: 16.51 inhabitants/km2[3]
-
GDP (nominal) 2022: $631 bn[4]
-
GDP/capita 2022: $13,650.6[5]
-
GDP (PPP) 2022: $1.226 bn[6]
-
GDP (PPP)/capita 2022: $26,530.3[7]
-
2021 growth rate: 10.4%
-
GNI/capita (PPP) 2021: $23,170
-
HDI 2021: 0.842
-
Literacy rate: 98%
-
Life expectancy 2022: 75.5 years