Franchises grew by 8.8% in the first quarter of the year, says association

A survey carried out by the Brazilian Franchising Association (ABF) reveals that the franchise sector grew by 8.8% in the first quarter of 2022 compared to the same period last year.

The billing, which was previously R$ 39.881 billion, went to BRL 43.380 billion during this time, according to the survey. The rise takes the sector to the same level as in the pre-pandemic period.

According to the president of ABF, André Friedheim, the increase in the market was driven by two factors: the ease of obtaining products through digital platforms and the repressed demand from consumers. He emphasizes that the business environment is increasingly hybrid and this can open new avenues for franchise chains.

“During the pandemic, the retailer began to realize that he didn’t just depend on the physical point to make a sale. The store itself brings another experience and is important, but consumer access through other channels that were developed in the midst of social isolation supported retail. It will only make this new sales format grow,” he noted.

Founded in November 2018, Royal Face, a network of aesthetic clinics and a company associated with ABF, noticed this increase. CEO Rodrigo Borelli reveals that the company’s first quarter 2022 growth grew 35% in revenue compared to the same period in 2021.

Borelli informs that the business arose for an audience that would like to carry out the procedures, but did not have access. So, with a more popular approach, the CEO says that the niche in the aesthetics segment was born.

“Even with the pandemic, the adversities and problems it has brought to the economy, we are breaking records. Only this month of May, we will break the record of the billing network”, she said.

“We are experiencing a significant increase as it is a heated segment. Along these lines, our idea was to democratize social aesthetics. So we thought about reaching an audience that doesn’t have much access to this universe. We came from a sector that is not a fashion sector, it is a trend sector. Only 6% of this market is exploited, and that is very little. So we see that there is a blue ocean yet to be put to the test.”

growing sectors

The survey indicates that, in the first three months of this year, revenue increased in all the segments listed by the entity, but the ones that registered the best performance in this period were Fashion (13.5%), Health, Beauty and Wellness (13 .4%), Home and Construction (9.3%), Foodservice (9.1%) and Food — Commerce and Distribution (7%).

The reasons for the increase in the fashion sector, according to the study, were caused by the resumption of work, face-to-face events and other places of large circulation of people, such as shopping malls. The others mentioned maintained their good performance and benefited from the easing of social distancing measures and the digitalization of business.

Friedheim says that the growth presented is positive for the market and also for the economy. According to him, the ABF intends to increase the number of jobs generated in the sector by 5%, which corresponds to an average of 80 thousand positions.

“We have a good outlook for this year. We think the total growth for 2022 will reach 9%. We will be breaking the R$ 200 billion mark, which is very significant, as we represent 2.7% of the Brazilian GDP. In addition, we intend to grow 7% in the number of franchised units, that is, 170 thousand stores next year and another 9 thousand new franchises this year alone”, he said.

The segments that stood out the most in the accumulated period of 12 months were Hospitality and Tourism, in first place, with 51.5% higher revenue; Entertainment and Leisure, in second, with 31.0%, Fashion, in third, with 21.0%; Food – Commerce and Distribution comes next, with 14.5% growth; Home and Construction, with 13.9% and Foodservice, with 12.8%, complete the list.

The president of the association points out that a repressed demand from the market was already expected, as the desire for consumption was evident, which was not possible because of the pandemic and with the shaken economic scenario.

However, after the relaxation of the restrictive measures imposed by Covid-19, Friedheim says that the current moment is opportune for those who want to take advantage of these segments.

“Tourism was lost a lot at the beginning of the pandemic. So this growth is based on that wait. Before, no one traveled because they couldn’t, but now, even with high prices, the public is doing it. The entertainment and leisure and hotel and tourism sectors showed a strong recovery after the reopening of commerce due to the repressed demand of the people”, he pointed out.