Metro franchise reaches Ecuador

Swedish-based Metro International, the international newspaper group which publishes the vastly successful range of Metro free newspapers, has announced that it had entered into a joint venture and franchise agreement in Ecuador with local media group Grupo Hoy. Grupo Hoy already publishes the existing free newspapers Metro Hoy in Quito and Metro Quil in Guayaquil (together "Metro Ecuador").

Metro Ecuador was re-launched under Metro International's global newspaper format a week ago today under the banner of a new Joint Venture Company -- Diarios Unidos Del Ecuador S.A ("DIUNESA"), which now owns 100% of Metro Ecuador. Metro International will initially retail a 15% equity interest in DIUNESA, with an option to increase this shareholding in the future. Apart from a share of the equity, Metro International will receive franchise fees reflecting its operational support of the joint venture.

Following the launch of its two editions in Ecuador, Metro has become the largest newspaper in Latin America. It distributes over 500,000 daily copies in six major cities in four countries: Mexico City, Monterrey, Sao Paulo, Santiago de Chile, Quito and Guayaquil.

The technique of franchising is highly developed in the retail, hotel and fast food sectors, but is far less often seen in publishing. The market power and brand recognition enjoyed by Metro provide an ideal means of scooping advertising income in markets which have yet to yield to the charms of internet ads.