Ace eyes expansion in Mexico
Ace Hardware International Holdings is expanding south of the border with a new franchising model designed to provide robust in-country support and execution to dealers.
The initial focus of the new Mexico initiative targets Mexico City and Monterey.
The international subsidiary of Oak Brook, Ill.-based Ace Hardware enlisted Feher Consulting, headquartered in Mexico City, to serve as the company’s exclusive franchise representative. Ace also teamed with PIMSA Ferreteros as master supply and logistics partner.
PIMSA, headquartered in Monterrey and with over 40 years in business, ranks among the top four largest hardware wholesalers in Mexico, currently serving over 4,000 independent hardware retailers across northern and central Mexico.
PIMSA will provide 60 percent of the product mix for locally owned and operated Ace stores from their current catalog. Additional product assortments will be provided by new vendors identified by Ace International, exclusive Ace private label products and dropship programs which include paint and other product lines.
“The expansion of the franchise model in Mexico gives us a platform to further deliver on Ace Hardware’s legacy of providing local investment and ownership opportunities to entrepreneurs,” said Alejandro Lorenzo, VP of international business development at Ace International. “We want to continue to develop a network of successful, locally owned and operated Ace Hardware stores that focus on serving Mexican families with locally sourced products.”
Ace is offering multi-unit development agreements as well as area development agreements with an initial term of 10 years. Experience with retail or franchising and a minimum liquid investment of USD $2 million is a requirement for interested investors, Ace said.
Macedonio Garza will lead the strategy and direct operational initiatives to expand the Ace franchise system in Mexico and build the local Ace team.
“Macedonio has been a leader in the Mexican retail market for over 25 years with a successful track record for starting new enterprises and scaling retail operations. He has an expansive background in retail operations, merchandising, marketing and distribution,” said Jay Heubner, president of Ace International. “Macedonio’s experience working in the retail industry, his deep knowledge of all facets of business along with his expertise in the market will help us successfully expand our franchise program in Mexico.”
Ace said it anticipates the initiative will generate its first new Ace Hardware store in Mexico in mid 2021.
There are currently 12 existing legacy licensees within the region that have previous agreements prior to the introduction of the new franchise model, Ace said. Existing licensees will have the opportunity to migrate to the new model providing that the new requirements are met.