Equipment for a Franchise in Mexico: Buying or Leasing

A machine featured in the sales presentation will not necessarily belong to you when you open. It may be sold separately, provided on loan or subject to a lease with another company. When entering the Mexican franchise market, understanding these options helps you calculate the true investment required and avoid relying on essential equipment under terms you have never reviewed.

1. Establish what you will receive and on what terms

Ask for a detailed inventory of the equipment needed to operate: machinery, refrigerators, specialist furniture, payment terminals and technology devices. For each item, request the make, model, capacity, condition and the arrangement under which it will be supplied. A line item labelled ‘complete equipment package’ is not enough.

Distinguish between four arrangements:

• Purchase: you pay to acquire the equipment. Confirm who is selling it, how the transaction is documented and when ownership transfers; the seller may retain title until the price is paid in full.
• Lease: you pay to use someone else’s asset for a set period. Do not assume it will belong to you at the end.
• Finance lease: this may offer options at the end of the term, subject to specific requirements and payments. Its structure needs to be reviewed with legal and accounting advice.
• Loan for use (comodato): you are allowed to use the equipment free of charge, with obligations to look after it and return it. This may be linked to a supply arrangement that you should examine separately.

Also identify the other party to each agreement. The franchisor, supplier and leasing company may be separate businesses. A promise from the franchise salesperson is no substitute for commitments from the equipment owner.

2. Compare the full cost, not just the monthly payment

Buying may require more cash upfront; leasing may reduce that initial outlay but adds regular payments and return conditions. Neither arrangement is inherently better.

Request quotations for equipment with equivalent capacity and functionality. Compare them over the same operating period and include:

• Purchase price or lease payments, upfront payment, deposit and final payments.
• Applicable taxes, transport, installation and commissioning.
• Any necessary electrical, plumbing or ventilation modifications.
• Mandatory maintenance, spare parts, consumables and insurance.
• Essential software licences, subscriptions and updates.
• Dismantling, transport and return costs, where applicable.

Separate non-refundable expenditure from potentially refundable deposits, remembering that both require cash. If there is an option to purchase, include its price: do not treat it as a free transfer of ownership.

Ask your accountant to review the tax treatment of each alternative. Do not accept a claimed tax advantage as sufficient reason to sign an agreement; its effect depends on the transaction and your tax position.

Finally, be cautious when estimating resale value. Highly customised equipment may be difficult to sell outside the brand’s network.

3. Secure maintenance and business continuity

The crucial question is not just how much a machine costs, but what happens when it stops working. Before committing, ask for the warranty and service agreement, not just a sales brochure.

Clarify who handles fault reports, what service coverage is available in your city and how travel, diagnostics and repairs are charged. Distinguish between response time and resolution time: receiving a phone call is not the same as getting your business running again.

It is advisable to agree the following in writing:

• Who pays for each type of maintenance and how often it is carried out.
• Which faults are excluded from the warranty.
• Whether replacement equipment will be provided and on what terms.
• Whether lease payments continue during a breakdown and whether any adjustment has been agreed.
• Which technicians may work on the equipment without affecting warranties or compliance with the brand’s standards.

Also check digital dependencies. A terminal may be physically functional but unusable without a licence or an account managed by a third party. Establish who contracts for that service and what happens if it is suspended.

4. Align the equipment documents with the franchise agreement

In Mexico, franchises are specifically regulated by the Federal Law on the Protection of Industrial Property (Ley Federal de Protección a la Propiedad Industrial). Article 246 requires a written agreement and specifies minimum content, including details of investment in the premises’ infrastructure and the policies, procedures and time limits relating to financing and other payments.

This does not mean that the law automatically makes the franchisee the owner of the equipment. Ownership, use and payments must be verified in the relevant documents, which are also subject to applicable commercial and civil law provisions.

Ask for the franchise agreement and its schedules to be consistent with the purchase agreement, lease or loan-for-use agreement. Pay particular attention to their terms and duration: an obligation to make lease payments could continue even after the franchise ends. Nor should you assume that you can return the equipment early at no cost.

Practical conclusion: before signing, prepare a fact sheet for each item of equipment recording its owner, the contractual arrangement, total cost, maintenance responsibilities and what happens to it at the end of the agreement. If any of these points remains undocumented, you do not yet have a complete picture of the investment.