Agência Brasil*
Brasília – With annual revenues of US$ 13.7 billion, the franchise system currently represents 1.7% of total Brazilian riches, the so-called Gross Domestic Product (GDP). And the sector is still growing: it had expansion of 9% last year and, for this year, a growth of 10% is forecasted. The figures are by the Brazilian Franchising Association (ABF).
In the definition of the New Dictionary of Economics, by Paulo Sandroni, the franchise system refers to the trade of products and services using a brand and operating within a quality standard. In exchange, the franchisee pays the franchiser a fee for use of the brand.
Different to what it may be believed, 90% of the franchises existing in Brazil are national. They generate approximately 30,000 direct jobs a year and there are around 804 chains operating in the country, with 59,000 points of sale or service.
Worldwide, Brazil is in the sixth position in this market. Ahead of the country are the United States, Japan, China, the Philippines and Canada. To Ricardo Toledo de Camargo, the executive director of the ABF, this is an advantageous market and is safer than working on an individual enterprise. He explains that, while a conventional company has a success rate of 45%, the closing rate of franchises is just 2.5% a year.
"It is natural for investment in a franchise to be much safer due to the structure that the company must have, and to all the consultancy supplied to the franchisee," he said. The average return of investment is two or three years.
*Translated by Mark Ament
