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Brazil is now the center of the sporting world as Rio de Janeiro is hosting the XXXI Olympic Games and, as it is usually the case, the host country gains notoriety far beyond the matches, the meets or the games themselves. In Brazil’s case, it is hard not to marvel at the beautiful beaches, the incredible street art and the warm and welcoming people; however, another aspect of Brazil which is certainly worth exploring, is the maturity, sophistication and strength of the country’s Franchise industry.
According to the Brazilian Franchise Association the economic output of the Franchise sector in the country was $128B Reales ($49B US), with 3,073 franchised concepts and almost 140,000 business units. At an international level, Brazil has exported 134 brands into 60 different countries all around the world.
However, as international athletes arriving into Brazil had to be cautious and prepared to encounter adverse conditions such as rivals in the field of play, court or pool, the threat of the Sika virus and polluted waterways, so does the international Franchise looking to expand into Brazil. The government is going through a period of instability with the last president having been impeached, a high rate of inflation (9.01% in 2015) and a decreasing GDP.
Furthermore, at a glance, looking at the top 10 franchise concepts in Brazil, one would think that there is quite a bit of parity 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, about 96% of the brand are domestic (International Trade Administration). Out of all the international concepts in the country 40% are US-based.
Given the right opportunity, one must not shy away from Brazil, but again, as athletes prepare and train to be able to participate and excel in the Olympic Games, expanding into Brazil requires of great insights and a deep understanding of the capabilities of the system and benefit and challenges of the market.
Finally, having a great coach that has played the game, knows the proper techniques and can prepare and encourage you through the process is fundamental in having a good performance, the same can be said about Consultants and Advisors that are intricately familiar with the market, competitive and regulatory environments, and can assist with a sound strategy to achieve growth and stability.
So when thinking about Brazil as an international expansion market, go for the gold!