It is expected that there will be positive development this year, and the industry association hopes that this event can contribute to the economy by accounting for 7% of GDP
Despite the pandemic, there is no shortage of people who continue to invest and open stores in Portugal. In the field of franchising alone, 159 new stores were registered in 2020. This number is even lower than the number of 273 new stores in the market segment in the previous year, but on the positive side, it is still surprising. “We have been waiting for the background of the recession. After all, the industry not only has not stagnated, but is also continuing to grow,” said the CEO of the Portuguese Franchise Association (APF). Cristina Matos’s goal is for franchising to account for 7% of GDP by the end of 2021.
According to 2019 data, franchising represents 30,000 companies, provides employment opportunities for nearly 200,000 workers, and covers 557 different brands. They then generated a turnover of 11 billion euros, an increase of 3 billion euros from 2018. They accounted for 2.3% of the business structure and 5.8% of GDP. Data for 2020 is not yet available, but Cristina Matos believes that based on a survey of employees, franchising “continues to claim that it is the best way to operate, even in times of crisis”.
This is not to say that no one is closing the door. The number of new positions exceeds the number. Survey data showed that 51 units were closed, but Cristina Matos assured that most of them were already “very weak” companies, and the pandemic was about to end. Interestingly, most of the closures occurred in the engineering/construction sector, accounting for 24% of the new openings in 2020.
Real estate continues to lead growth, with 29% of new stores opening in 2020. The vending machine department (machines used to sell a variety of products, from food and beverages to masks and alcohol gels) also has a place. 20% opening.
It is also interesting that 14 of the 159 franchise brands created in 2020 are Portuguese brands that have opened stores overseas.
“Of course, we are not immune to the pandemic, but the numbers show us the incredible resilience of the industry. This proves what we already know from previous situations, franchising is a safe bet, and in crisis The period will expand,” Christina said. Matos explained that this type of business is an alternative to unemployment or loss of income, while allowing entrepreneurs to enter the business world with a lower risk.
“Brands can only become franchise networks after their business models have been properly tested. It has a history where an economic curve indicates that the company is profitable. But that’s not all. For franchisees themselves, it is easier to face a crisis. Because he is not alone, he is part of a network where everyone shares their gains and losses, so everyone works together to find the best solution. Their franchisees are partners, and the need for success belongs to everyone,” he emphasized.
Regarding 2021, the person in charge admitted that there are still many unknowns that need to be dealt with, that is, the evolution of the pandemic itself and the impact of the suspension on the business structure, but believes that the industry will “significantly strengthen” its brand to “maintain expansion plans”, and Because there are “many new brands” who want to enter the country, that is, from Brazil, they occupy an important position in the GDP. “Five years ago this was unthinkable. Brazil is a very introverted market, but today we are seeing unprecedented interest from Brazilian entrepreneurs in Portugal. Many people want to move to Portugal and bring their business, others bring The CEO of the international brand APF emphasized that they have successfully tested them in the Brazilian market and believes that bringing them to Portugal is an asset, even as an entry point into the European market.