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The franchise makes money by growing its units, it will have the immediate interest of opening the maximum number of units, but it must also have the interest of not sacrificing existing units for the benefit of new ones.
That is the ideal spatial balance or sustainable growth.
Key factors
- Franchisee profile
- Region profile
- Logistic queue or operational coverage
Everyday life is not as beautiful as the prospects and there can be fluctuations of all kinds.
Transfer, reposition, and closure
The franchisee had the profile, but for other reasons he decapitalized and was no longer able to maintain the unit, he decided to move to another city or another reason.
The region is undergoing changes, the opening of a mall in another center is displacing importance there or something like that.
The network moved to a new distribution center and now other cities are in its operational coverage area.
All of this can lead to issues of transferring units to other franchisees, repositioning the network, or even closing units.
At the end of the day, stores in low-potential regions must be closed, and franchisees that don't fit the chain's standard will have to leave so that the chain can maintain its focus on growth.
The ABF Expo
The annual franchise market meeting.
You must be getting ready to learn about the news in the segment at one of the largest fairs in the world.
There are more than 400 exhibiting companies (Mapfry will be there), but that's just the tip of the iceberg.
Last year, 3,077 companies were registered as franchises in Brazil.
Some franchises will not be exhibiting because they have already reached their market limit.
Others will not exhibit because they are not even associated with ABF.
And some are not yet expanding at a rate that justifies the high investments related to participation, such as hiring the space, setting up a stand, a team of promoters and promotional materials.
The fair is a great time to learn about the market and increase your comparative base of options.
Who is who
New brand
Franchises with less than 5 years and up to 60 units.
Advantages
- Is it still available in large markets
- Updated business model
- Facilitated deployment cost
Disadvantages
- Poorly validated model subject to competition
- Poorly structured network for franchisee support and development
Established brand
Franchises between 5-10 years with +100 units
Advantages
- Network support, which must already have the ABF seal of excellence
- Is there still room in good markets
Disadvantages
- The cost of deployment starts to rise
Traditional brand
Franchises with +10 years and +250 units
Advantages
- Strong track record of results
- Good relationship with franchisees
- Possibility to transfer good points
Disadvantages
- Higher deployment cost
Franchise groups
Franchise developers
- They share group resources and launch brands more easily
- The strong point is the combination of factors between new and established franchises
Accelerators
Sales effort for network growth
- They dedicate a lot of energy to expanding the network quickly in search of an optimal level
- Reaching this level may allow the network to structure itself
- While the high speed of expansion may neglect franchisee support
References
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Other chapters:
- Presentation
- From entrepreneur to entrepreneur
- Reason for being of franchises
- Law and Order
- Where to start and how far you can go
- Territories in franchises
- Benefits of Geomarketing in the design of territories
- Critical Analysis of Expanding a Network
- Each one in its own square
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