Total of franchise networks falls 6% in 2017 and opening of shops slows down

Although close with revenue growth 2017, the franchise industry has not gone unscathed from the crisis. Total operating for franchising networks 6% retracted 2800 brands, and the opening of new stores has slowed, with a high of 2%.
The result, released yesterday by the Brazilian Franchising Association (ABF), was below the expectations of the entity. In number of units, the forecast early last year was an increase of 4% to 5%, and a total stability of networks. "The franchise is not a bubble from the rest of the market, and really had an impact of the crisis," said the President of the Association, Altino Cristofoletti Jr., speaking to journalists.
The frustration in the forecast of 2017, store openings, occurred by a lack of confidence of entrepreneurs to invest in franchises. The still unstable political and economic environments explain the lack of courage of the investor, says the Manager. According to him, most of the openings last year came through franchisees who already operate on the network.
"The growth of 2% was the result of the belief of the franchisee in the business, which saw a growth opportunity. The nets did not have the projected expansion, but had an advance safer, given by entrepreneurs who were already working in the business, "he says.
The reduction in the number of networks, which went from 3030, in 2016, to 2800 by late last year, Cristofoletti explains that most of the brands that have stopped acting by the system or closed their doors were smaller networks, up to ten units , and which were not yet fully structured. The Executive claims that the movement is in the process of maturation of the industry, but admits that the impact was significant for the franchise.
The reduction in the number of networks has not occurred only last year and now comes from 2016. At the time there was no retraction of 1.1%, in total, from networking to 3.07 3.03 (see the chart). In the two years of retreat, 273 marks broke or ceased to operate by the franchise system. For 2018, the forecast of the ABF is the movement to reduce and stabilize networks that franchises grow 3%. If the prediction, the value would still be lower than the recorded before the recession. In 2014, the total number of shops increased 9.6% and 9.4% in 2013.
Billing
In relation to the billing, the expansion in nominal terms was 8% in 2017, keeping the pace seen in the prior year (8.3%). In real terms, however, the gain was greater, since inflation closed at a level much lower than last year – 2.95% 6.29% front in 2016.
In addition to the improvement in economic indicators, mainly the fall in interest rates and inflation, Cristofoletti highlights four points of the own sector contributed significantly to the performance of 2017, "the diversification of channels and formats; the expansion to alternate points, such as hospitals and universities; the internalization of the relief and greater structuring of own franchisee, with the growth of so-called multifranqueados ", explains the Executive.
With advancement, the franchise reached revenues of R $163 billion last year, a gross revenue of $151.2 billion recorded in 2016 R. For this year, the projection is that billing entity moving between 9% to 10%. For the entity, 2018 should be turning a year, despite the uncertainty and risk that general elections still bring to the business environment. "Brazil is complicated and there is always the risk of news that impact the business environment. But in the beginning of 2018 we get a larger entrepreneurial confidence to return to investing, "he says.
Largest in the sector
On occasion, the entity also released a ranking of the 50 largest in the industry in number of units. This year's Edition, the Apothecary remained in first place, with 3,762 stores. The network, however, presented a relatively low surplus in relation to 2016, with an increase of only 32 operations.
In second place was the AM PM, that in 2016 had figured in the fourth. The convenience store chain of Ipiranga stations opened 375 units, from 2,039 points at the end of 2016 to 2,414 at the end of last year. According to market intelligence Manager of ABF, Vanessa Bretas, localized networks in gas stations or related to automotive services segment had featured in the ranking of 2017.
APR Mania, convenience store of BR, and Jet Oil, are other examples. The first was in eighth place, with 1,311 units, and the second on the fifth place of the ranking, with 1,735 operations.