Isaura Daniel
São Paulo – Brazilian franchises will get federal government support to expand to international markets. A group of 13 franchises will get US$ 652,200 to participate in world trade shows in the sector and to advertise outside the country during the next two years. The agreement which makes the investment formal was signed Friday (18) between the Brazilian Export Promotion Agency (Apex) and the Brazilian Franchising Association (ABF). Half of the money will come from Apex, 30% from the companies themselves and 20% from ABF.
The companies which are part of the group are the food chains China in Box, Spoleto, Mini Kalzone, Vivenda do Camarão and Bon Grillê; the languages school, Wizard; the computing school, BIT Company; the security services company, Golden Services; the bookshop Nobel; Movimento, a clothes stores chain; Carmen Steffens of shoes, as well as Oceanic, of cosmetics and Mundo Verde, of natural products.
These companies will participate in eight franchising trade shows in Mexico, United States, Portugal and Spain, in 2005 and 2006. According to the executive director at ABF, Ricardo Camargo, however, the aim is not to take the chains only to the countries where there are trade shows, but also to reach other important nations.
The fair in the United States, for example, is normally visited by many Asian countries. "The fair may be an entry port to Asia," says Camargo. According to the ABF director, the North American trade show, which takes place in April and is called the International Franchise Expo, normally receives entrepreneurs from Arab countries, especially from Saudi Arabia and the United Arab Emirates.
At the Mexican fair, the Franchise Trade Show of Mexico, which will take place in March, the aim is to reach the other countries in North America and surrounding regions. Participation in Expo Franchise, in Portugal in May, and the Franchise Fair, in Spain in October, aims at introducing the Brazilian brands to the whole of Europe, including to the new members of the European Union (EU).
As well as participation in trade shows, the funds are to be directed to advertising the selected chains beforehand, in websites and newspapers, in the countries where the fairs will take place. The objective is that in two years these 13 franchises have exported US$ 5.3 million in products and services. "The partnership with ABF will attract the attention of international investors to the Brazilian brands. We need to promote our capability on the external market, showing we have creativity, quality and competitive prices," says Juan Quirós, president at Apex.
Ricardo Camargo states that this is simply a pilot project and that, after two years, the programme may be expanded to other countries and Brazilian companies. He states that ABF is interested in doing the same kind of promotion work in the Arab countries. The continuity of the project, however, has not yet been defined.
One more step
The measure, however, is not the first step Brazilian franchise companies take in the direction of the international market. Many of them are already established in other countries, chiefly in Japan, Mexico, Portugal, Argentina and Spain.
Dzarm, a teenager clothes brand belonging to Hering, for example, has stores abroad, including some in Arab countries: in the United Arab Emirates, Bahrain and Qatar.
One of the companies in the group participating in the Apex programme will start opening stores in Saudi Arabia next year. Shoe factory and retailer Carmen Steffens will inaugurate three franchises in the Middle Eastern country up until the end of the first half. The company also plans to open units in Kuwait and Bahrain further down the road.
Franchises in Brazil
Brazil is amongst the 5 countries with the greatest number of franchises. The country that tops the list today is the United States. There are 678 franchise chains in Brazil with approximately 56,000 units. About 90% of the franchises in Brazil were set with national capital.
Last year the sector grew 3.7% and had revenues of US$ 10.5 billion. Amongst the sectors which most worked with the franchising system are sports, entertainment, health and beauty, training and services, food and education.
