When Mexican-owned KidZania was looking to site the first U.S. franchise for its upscale children’s entertainment center, North Texas was an easy winner.
“It has great economic development and the demographic that we need — families with children who are interested in their education and good socioeconomic standing to pay for tickets,” said Enrique Mena, chief of staff and business liaison officer at KidZania USA.
The initial location, Frisco’s Stonebriar Centre, is in one of the region’s busiest shopping centers, surrounded by acres of other retail stores, large employers and affluent suburban neighborhoods — exactly the customer base and foot traffic needed to support an 80,000-square-foot entertainment complex.
Desirable demographics aren’t the only reason 35% of all Mexican corporations in the U.S. are headquartered in the Dallas area, according to statistics from the consulate general of Mexico in Dallas.
Mexican companies also find Dallas-Fort Worth attractive because it’s a major air travel hub. In July, seven airlines flew a combined 61 flights a day on average to 24 destinations in Mexico from DFW International Airport, according to flight schedule company Diio by Cirium.
With a population of about 7.7 million, D-FW is the fourth largest metropolitan market in the country, with a growing and vibrant labor pool supporting nearly two dozen Fortune 500 companies, plus a thriving fine arts scene and professional sports franchises where the crown jewel is the NFL’s Dallas Cowboys, a recognized brand worldwide.
All these factors serve as magnets for companies — both in and outside of the U.S. — looking for healthy local economies, high-skilled workers, tax breaks and quality of life for their employees.
KidZania USA,an elaborate children’s-size town where role-playing teaches them about various professions, includes stores, a bank, a TV station, an aviation academy, restaurants, an optometrist, a hospital, a university, a theater and a fire station.
When the Mexican-owned company ventured into the international market in 2006, it was already successful in Mexico City. Mena, who has been working with KidZania since 2005, was part of a team that traveled to Japan to open the first international center. It now has 27 locations globally that draw 9 million visitors annually. The company generates around $15 million in yearly revenue in the U.S., according to Mena.
KidZania isn’t alone in recognizing D-FW as a land of opportunity to grow a business in the U.S.
Luisa del Rosal, executive director of Southern Methodist University’s Mission Foods Texas-Mexico Center and Tower Center, said businesses from Mexico see the North Texas business environment as one that lets them maximize earnings.
“There’s a very important business, employment migration dynamic that happens in Texas and in the D-FW region, because of the good business environment, because of the family affiliations that they find,” del Rosal said. “And it just leads to more growth and stickiness of Texas.”
Mena was part of many international expansions, including openings in Dubai and Indonesia. But for Mena, the goal of getting the company to the United States was a dream and challenge for 14 years.
“Opening in the United States was very difficult,” Mena said, as the firm searched for the right business partner, Luxembourg-based company Innova Partners, to execute its strategy.
But Frisco made it easier by offering the company up to $1 million in incentives over five years if it met investment and job creation goals. KidZania USA has already gotten payments totaling $560,000. Leigh Lyons, Frisco Economic Development Corp.’s marketing and communications director, said the company “exceeded the key performance criteria.”
Frisco, as the company’s first U.S. location, is helping the company “identify areas of opportunity,” Mena said. “Whatever we learn here, we will avoid or improve in the next cities that we go to in the U.S.”
Mexico is Texas’ largest trading partner, followed by Canada, with both accounting for nearly 42% of Texas’ exports in 2019. Texas also is a major recipient of Mexican business investment.
In previous decades, Gruma Corp., (the largest tortilla maker in the world), Cinépolis USA, Interceramic, Lala US, and Bimbo Bakeries USA successfully established operations in the Dallas region.
“It’s really astonishing, just because there’s such a low business failure rate,” del Rosal said.
Softek, a software and IT services company founded in 1982 in Monterrey, Mexico, took advantage of the business-friendly climate in North Texas and moved its U.S. headquarters to Addison in 2017 from Atlanta.
Of the 15,000 people it employs worldwide, 99 are in the Dallas area. The company provides IT application, infrastructure, cybersecurity and software for major employers such as Dallas-based Southwest Airlines. The company generates under $1 billion annually. “I think [the North Texas area] it’s an amazing market in terms of how many more companies are moving headquarters here,” said Beni López, CEO of the U.S. operations. “So we’re really looking forward to expanding our client base in Texas. There’s good talent in IT.”
Having a successful business in Mexico does not guarantee success in D-FW, said Alicia Molina, president and CEO of RegiaTax, a tax and accounting advisory firm in Carrollton. Her business helps companies get the necessary documentation and permits to set up shop in the U.S.
The majority of businesses that seek her firm’s help are from Mexico, but North Texas also is a popular choice for companies from Chile, Venezuela, El Salvador and Spain. Just in the first six months of this year, 15 foreign companies have already begun the process of migrating to the U.S. through RegiaTax.
Paperwork is one of the barriers business owners must overcome when making a move to the U.S.
“[Mexican companies] like that I can speak Spanish,” Molina said. “We have bilingual personnel and try to serve the Latin community so that barrier is not a problem for them.”
Sometimes, to adapt to a sudden change in clientele demographics, the business must change as well.
“Even if they are coming from Mexico and they want to target the Mexican or Latin market in Dallas, they are going to have to change their strategies, especially their marketing, because it’s not the same audience,” Molina said.
Most of the businesses Molina advises have successfully navigated those changes. To date, her company has helped more than 100 businesses establish themselves in Dallas.
Among barriers that Mexican entrepreneurs face, the Texas-Mexico Center found that migration policies, certification processes, and social and institutional discrimination top the list.
Jennifer Apperti, manager of the SMU Texas-Mexico Center, said she’s also seeing changes in Mexico-to-Dallas business trends. “Two key findings were that [Mexican entrepreneurs] are underemployed at times because of language and lack of social networks,” Apperti said. “We’re [now] seeing a different, more highly educated migrant coming from Mexico.”
Mena said KidZania hopes to add up to 18 more cities in the U.S., including Chicago and New York in 2022. The U.S. is the most important country it can do business in, he said.
“We had to close for about four months last year,” Mena said. “But this summer, we’re very happy because even though we are not receiving the same number of people, people are spending more.”