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Going for Gold in Brazil

Brazil is now the center of the sportingworld as Rio de Janeiro is hosting the XXXI Olympic Games and, as it is usuallythe case, the host country gains notoriety far beyond the matches, the meets orthe games themselves. In Brazil’s case, it is hard not to marvel at thebeautiful beaches, the incredible street art and the warm and welcoming people;however, another aspect of Brazil which is certainly worth exploring, is thematurity, sophistication and strength of the country’s Franchise industry

According to the Brazilian FranchiseAssociation the economic output of theFranchise sector in the country was $128B Reales ($49B US), with 3,073franchised concepts and almost 140,000 business units.  At an international level, Brazil has exported134 brands into 60 different countries all around the world. 

However, as international athletes arrivinginto Brazil had to be cautious and prepared to encounter adverse conditionssuch as rivals in the field of play, court or pool, the threat of the Sika virusand polluted waterways, so does the international Franchise looking to expandinto Brazil. The government is going through a period of instability with the lastpresident having been impeached, a high rate of inflation (9.01% in 2015) and adecreasing GDP.

Furthermore, at a glance, looking at the top10 franchise concepts in Brazil, one would think that there is quite a bit ofparity between domestic and international brands (4 out of the top 10 are international);however, when taking a closer look at the rest of the Franchise industry, about96% of the brand are domestic (International Trade Administration). Out of allthe international concepts in the country 40% are US-based. 

Given the right opportunity, one must not shyaway from Brazil, but again, as athletes prepare and train to be able toparticipate and excel in the Olympic Games, expanding into Brazil requires ofgreat insights and a deep understanding of the capabilities of the system and benefitand challenges of the market. 

Finally, having a great coach that has playedthe game, knows the proper techniques and can prepare and encourage you throughthe process is fundamental in having a good performance, the same can be saidabout Consultants and Advisors that are intricately familiar with the market,competitive and regulatory environments, and can assist with a sound strategyto achieve growth and stability. 

So when thinking about Brazil as aninternational expansion market, go for the gold!

 

Roberto Litwak COO, Feher & Feher
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