The Argentine franchise market will seek this year to consolidate the growth registered in 2022 and expand its presence abroad, both in the opening of new stores and in the number of franchisors.
With more than 1,500 companies, in the sector consider that a level of maturation and consolidation has already been reached, after the vertiginous growth between 1990 and 2015, and they estimate that this year they will close with 43,842 POS (Points of Sale) and 219,546 jobs, with increases compared to pre-pandemic levels of 13.9% and 0.85%, respectively.
“In terms of number of franchisors, we are the third country in Latin America after Brazil and Mexico, but in exporting franchises we are the first, as result of three factors: creativity, design and innovation“, highlighted Carlos Canudas Rivell, director of the Argentine Association of Brands and Franchises (AAMF), in statements to Télam.
“In terms of number of franchisors, we are the third country in Latin America after Brazil and Mexico, but in franchise exports we are the first”Carlos Canudas Rivell
The entity is in full preparation for the realization of the twenty-seventh international exhibition, next May 26 and 27 in La Rural, occasion in which for the first time it will be the scene of a world franchising meeting.
“The exhibition is going very well, it is already completely sold out, the flow of past years was between 6,000 and 9,000 people and we expect an influx of at least 7,000 visitors”, confided the executive director of the Association, Ezequiel Devoto.
This first post-pandemic global meeting represented a challenge for the organizers since “the decision was made in October of last year and we did not know what was going to happen in May” in the face of the resurgence of Covid-19 in December and January, Devoto acknowledged to Télam.
Business rounds and meetings of the World Franchise Council (WFC) and the Ibero-American Federation of Franchises (FIAF) will also be held at the exhibition, in which delegations from 18 countries will participate.
Devoto pointed out that the rise of franchises in recent decades in the country is based on having “stronger support” from commercial management regarding an individual business, in aspects such as payment to suppliers, rental contracts and other facets.
At the exhibition in La Rural, business rounds and meetings of the World Franchise Council and the Ibero-American Federation of Franchises will be held, in which delegations from 18 countries will participate.
“The main argument is the brand and the security of a proven business,” he said, underlining a central concept for the sector and that has been part of the new Civil and Commercial Code since 2015.
At the request of Osvaldo Marzorati, lawyer and honorary president of the AAMF, article 1512 specifies that “there is a commercial franchise when one party, called the franchisor, grants another, called the franchisee, the right to use a proven system, intended to market certain goods or services under the commercial name, emblem or brand of the franchisor, who provides a set of technical knowledge and the continuous provision of technical or commercial assistance, against a direct or indirect provision of the franchisee”.
In that way, To the identity with the brand, an essential factor is added in these times, such as training.both franchisees and employees.
For this reason, he explained, “the pandemic was less harsh for franchisees, due to the advantages of being part of a network. Many who had to ‘ask for the towel’ -he added- managed to get someone to buy their business; they are sales of opportunity, but since they are recognized brands, there are always interested parties”.
To express it in numbers, Devoto pointed out that at the worst moment of the pandemic “we revealed the closure of 6,000 POS, but 3,000 opened with different formats.”
AAMF statistics indicate that from the 38,487 POS in 2019 it fell to 35,831 the following year, the first in more than a decade with an annual decrease, but With the relaxation of restrictions in 2021, the premises rose to 40,633 and 43,842 are projected for 2022.
However, the evolution in the number of POS and jobs is not the same: since 2016, the former will grow by 37.49%, while jobs will increase five times less, by 7.88%.
Devoto explains these two different speeds in that, in the first place, “there is a historical downward trend in jobs”, but also, “the new formats require fewer employees”, especially after the adoption of the modalities virtual ones that emerged in the pandemic.
In this sense, called dark stores or dark stores, in which the sale is 100% virtual, requires fewer tables and, therefore, less staff dedicated to attending the public in person, situations that have also been occurring with the rise of delivery and two concepts that the pandemic has made commonplace: take away (buying a product at a store to consume it outside) and pick up store (the withdrawal in the physical store of the purchase made through an online platform).
Another way out of the need caused by the pandemic, which due to its good results is here to stay, is that of businesses with small aggregates, an option for which the links of the franchises represent an important facilitation.
“For example, setting up an ice cream sector in a pizzeria,” commented Devoto, who highlighted the beneficial outcome for both parties, because “it helps pizzerias to have something else to offer and many well-known ice cream parlors managed with this model not to fall so much into its volume”.
