octubre de 1996-latin trade

8/2/2019 Octubre de 1996-Latin Trade

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ntinued from page 38exam ple. w ith 77 stores an d plen ty

o \ li to r s lo ok in g to buyout t hi s p e re n ni alt pro perty. A no ther is Boricar io, II onee I1 ru g ~ (I')fe In C urIU M w rlle n n a~llen to 1 .200 s to re s s ellin g p er so na l.

re p roduc ts in B raz il and beyond , S tilli s L o c al iz a, th e le ad in g car rentalwith 800 agencies , $400 mill ion

y ea rly re ve nu es and a global reach thattaken its franch ises from Chi le (0

uba (and is heading even far ther afield,M exico ). B ut in 1992, th e c ou rts rein -p re ted the B razilian law bo ok. and th ewas lifted fo r fo re ign inv es to rs , w hoy now easily and quickly set up the iron B razilian so il and freely remit

an d r oy altie s. T h ey hav e fo und alc om e env ironm ent. O ddly . perhaps,fnm-hirtn hl'o" 'i ' 'j'nly ., ,1.;" .ho.....the m arket w here they are be st kn ow n:t fo od, However . tw o of ev ery th rees in the rapid ly expanding areas o fh ic s, p ho to gr ap hy , an d to u rism and

a re foreign. T he s he er size o f thistr y, w ith II po puhuion of 160 m illio n,ne a pp ea l."B razil is a country o f continental

and a n atural en viro nm en t fo r'unch is ing sys tem ," says Artstideso n , d ir ec to r of fra nc his in g fo r Local-

c ar re ntal, b ase d in B elo H oriz on te .There is also the en dless B razilianate fo r n ov elties , M any fran ch ises h av e

to u nfu rl th eir awn in gs a nd the cus-r s w ill q ue ue up at th e d o or . B ut per -

s the b igges t boos t c am e from stab levirtually alien to B raz ilian s fo r th o20 years. T hey pav e come courtesy ofReal P lan , Q \p lnn nam ed fo r the

do lla r-ancho red currency in tro -ed by F er na nd o H en riq ue Cardoso , ar fin an ce m in is te r who p arla ye d e co -c s tab ility in to a su cc essfu l c am paignth e pres idency in 1994. T hough busi-se s s till c om plain o f sc orc hin g in teres tan d t he g o v er nmen t's rest r ict ions onu m er c re dit, th e s tro ng currenc y sen t

Oil a buying spree . M any of [heme landed at the franchisers ' do o rs .y 's began franch is ing in B raz il in2. and already n ine o f its 14 sto resm hl ...nlm .flh hnin'i 1li11rf

tu rn ing ov er $1 m illio n o rre per year in sales . L ikew ise, K en-P lie u C hic ) ..~II'~ leading Drlllilialli ""W II~'im,an)' r tnr~ ?f H m;II;~.nB lo ck bu ste r v id eo fir st opened it s

~ I n !lftl} f il u m I n I V ll l J 'C f t,l I nu u l! 'l !U U yl v ideo s to res are trem bling. R enatero brought the D alln , T CX OJ buoed

F1ls tS ign :; s to re to S ilo Pau lo in1992. N ow there are 1 9, lind bythe end of this year there w ill ben o fe we r (h an 2 S . f uc ll f ru ll cl ll !: ~to day sells fo r $130,000, up from$80,000 two years ago . B utB razilians don 't seem daunted bythe price tag. A fter all. in barelyfour te nd er y ea rs , Claro's pioneers to re is I ' IIking in $55,000 a month- a s u re s ign fo r o ther investorslo o kin g f or o p po rtu nity .

So far , the failu re ra te o f fran-chises is also lo w: aro un d 10 per-cen t of t h e f ran ch is e e s go under , arate comparable to the U nitedS ta te s w ith a far l es s t emp e st uo u se conomy . Wh~

uJ)p. ..h~r~hpr~lIr,:,p ~(f ..... .:.:.,...m an y c ris is an d years o f tum ult,B ra zilia ns h av e leamed to s ur viv eand become creativ e w ithou treally becom ingaccommodated,"suggests Marce loCherto , p res iden t o fth e Instituto Fran-chis ing, Q suppo rt and educatio nal groupfor B ra zilia n fra nc hisers , "We havea lw ays liv ed w ith chao s . T ha t's been ourreality fo r th e la st 2 0 y ea rs ."

Someday soon , th e B r az il ia ns mighteven be f ra nc h is in g th at ta le nt. 100.Colombl W hen D unkin ' D onuts se t upth e first fo reign franch ise opera tio n inC olom bia in the ear ly 80's, f ranchisesw ere no th ing new to th e local businesscommunity . M im e's , a Co lombian ice-c ream com pany , used franch ises toexpand the ir o pera tio n as ear ly as 1977 .S ince then . franch ises hav e pro ven suc -cessful for bo th fo re ign and dom esticcompanies . Dunkin ' Donut s is now thebiggest foreign franchise in C olo m biawith 13 5 b ran che s in th e c ou ntry ."Fo r fo reign com panies . franch ises areexcellent because they ru n n o fin nn cia lrisk and can take adv antage o f lo ca l operators' know ledge o f law s and cu ltu re ,"says H ec to r G alindo . c o -au tho r o f a recentb oo k o n fr an ch is es .

T~........ro..l"t A),,,,,\n,\i,..cal"'t"r nf th,:. r~~~l,......,.tis t he : b ig fo re ign nam es. In the pas t th reeyears . fo reign franch ises hav e grow n atappro xim utc ly 120% a y o ur . I nv e ntmen tsr-... IUU"; or" ""p"rtPd tl\ tllp ~'i million.A ll in all, there a re som e 500 franchiseU 1 J e H I l I U I I~ I II C u I U I I J U I . t . h a l f u f WlJi\.ll WI.foreign f i rms.

Lunt y e a r , O ffi~ j J ;:o jp ~$ j r l $ l I r 1 1 ' 1 l ~


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B r a n c h i n g O u tR OD RlGQ V IEGAS W AS PULL INGh is h air out. On a recent day, he wasall sci to open the maiden stare ofFast Frame. an Amer ican based chainthat m akes p ic tu re fram es , and hadprepared a cocktai l fo r th e gra nd o pen -ing. A m odest affa ir, to be sure. bu tsomething e le ga nt to imp re ss h is f r iendsl ind potentia l upscale c lie nte le in J ar dimA rner ica, a smar t boutiq ue-studdedne ighbo rhoo d o f Sao Paulo. H e ha d evenn ego tiate d a b argain price with II locals ign m ilker, w ho prom ised to prepare al lth e stores banners , s ig ns , a nd pla card s at20% below the going rate. B ut w hen thesigns w ere deliv ered, he had a fit.

"They were awful," V ie ga s re ca lls ."T hey were ugly, o f poo r quality , u n u

FRANCH.SING

c omp le te ly u n us ab le ."In IIpan ic he rushed ov er to a com pet-in g sign shop , an d braced fo r the bad

news. No problem . said Renate LapaClam, o f Fas t S igns, ano ther A meric anb as ed f ra nc hi se . "In a few hou rs , th eproblem w as reso lv ed ," says V iegas.S in ce th en . V ie ga s h as called on no onebut Fas t S igns fo r a ll the s to re 's d isplayneeds .

,,\i/8U04d

~L9L

BY MAC MARGOLISRIO DE JANEIRO

hom e gro wn burger jo in t, .w as founded more than 'fo rty years ago , andMcDonald ' s planted iua rc he s in B ra zilia n s oil in1979 . B ut only in t he l as t:decade or so have these .brandnames begun tospread by way o f a franch ising sys tem .

(O nly in 1 984, we ll on its w ay to middleage, d id the venerab le B ob's begin tofarm ou t it s stores.)

W hat b egan as a t r ickle is no w II tor-rent . Twent y y e ar s a go , B r az il's fr an ch is -ers were a handfu l o f shops -, couriers ,p izzerias , perfum eries. and such - ped-dling a fe w lo ne ly brands. Now there are1,100 b r and s b ei ng sold th rough nearly athousand companies op e r at in g f l'a n c h is e sin B ra zil. T hes e shops , clinics, and ser- 'v ice s are expected to r ing up sales o fov er $10 billio n th is year. Though th enumber of chains has steadied , and mayeven shrink in the com ing years (due tomerge rs a nd b uy ou ts ), th e in div id ua lfmnchi~1.: lin'! hnomioB' Ar.r.oming to thp.Franchising Guide , an independent sur-v ev nublished bv E dito ra G1oho . f ran-c his in g h as g ro w n fro m an arc hipe lagoU l O OU LW fO O ( jU }M! j (0 u n emlll~. 1f t J ~ l I ' ,there were 3 .2 36 s to r es o p er ati ng lIS f ra n- .c hi se s. F iv e years la te r, th e n um ber h admultlplled mo re than four fold . 1013,9 9 8 . L as t year the to ta l reached23 ,7 6.5 u nits , a nd th is y ea r is e xp ec te d toswell t o 3 0, 00 0. T hough the v ery con-cep t o f franchising, brings to m indAmerican g ad ge ts a nd goodies, Brazil ianc omp an ie s r ep re se nt a lmos t 90% o f thecountry's total franchising market. Fo r

the lo nges t tim e, foreigninves to rs - except for th ep recoc iou s McDonald ' s ,which was banking on thefutu re - w ere pu t o ff by th eclosed shop policies of

B r az il , w h ic h severely limited remiss iono f ro ya ltie s, a nd c ho ke d n ew b us in es se sunder reels o f red tape and heavy start-upcos t s .The res tric tio ns en de d u p by fortifyinglocal brands, which s tarted sm all andthen grew in th e greenhouse economy .store by s to re by store . BO?'g is the pre-

FromBrazil to Chile, Internationalfranchl.e chains are .. Ing ~pshop - and oonsumer. are liking It.

Like Rodrigo Viegas, a gro wing nurn-ber o f Lat in Americans a re a ba nd on in gold suppliers and sho ps fo r new . shiny,neon-lit ones th at w o rk nimbly a nd e ffi'ciently in a marke t saturated by t he s lu g-gish or th e sloppy.

The f ranchise inva s ion is m o stly fr omth e United States , bu t som e m arke ts areseeing strong growth in locally devel-oped f ra nc his es , T h e f ra nc his e boom ha s

been spurred by n com bine-lion of pent-up demand.i nc r ea se d p u rc h as in g powe r a nd a gg re ssive market ing.8razll boom. Franchises no w operatein 122 d iffe ren t sec to rs o f B raz il's ec on -omy , offering e verythin g fro m b urge rs tobonbons , from sof tware t o s kin c are. N otthat f as l f oo d and chain s to res are new toB ra zi]. B o b's , B ra zil's wildly popular

38 LATINTRAD. O C T O BE R 1 9 9 6T ..u.


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LA"'N TRADEt t : 8 1

'O R INFO RM AT IO N CO NTAC 1lW e nd y's In te rn atlo nlll, In c., A ttn : A I F eria , 91 00 N .w .3 6 S t., S uite : 1 05, M ia mi, F L .33178 or through theInternet < ' I t : WWW'.wendys.com or EI l' l4 I I:Ste ' le)[email protected] l l l .com

98- -8

FRANCHISINGcontinued/rom page 39

B ut there have 1I1~o b een p ro blem s.Bu rge r King w ithd rew after the o wner o ft he f ra nc his e in C olo mbia , the C atho licChurch. so ld the operation s w itho ut con -sult ing th e fa st food company . And PizzaHu t has been c ritic ized fo r la ck o f p r od -uc t un ifo rm ity in its p roduc t ac ro ss itsne tworks of r es ta ur an t o ule ts One: of th ereasons, SQy experts , is tha t the masterf r anch i se w as so ld in B raz il, fro m wherethe th ree regio nal franch ises in C olo mbiaa re r un .Yet industry in siders abo ut optimistic

o n th e m a rk et's p ote ntia l."Colombia h as a d yn am ic fu tu re ," s ay sF r a n s t s c o Javier Patino. cha i rman o f th eCo l omb i an Franchising Assoc i a t i on .Mexico. Fo r th e Mexican co nsum er w howan ts to eat a ham burger , p izza o r a taco .or to buy 11 pair o f jeans o r to change theo il in the fam ily car . it is becom i nginc reas in gly p ro ba ble th at a fra nc hise finnw ill p ro vid e th e s erv ic e o r p roduc t .

O ver the pas t ten years franch ises haveestablished a finn presence in m os t areaso f re ta iling and serv ic es in the m ain u rbanc enters in M ex ic o . T he charac teris ticshop f ron t s of c om pan ies such as M eD on-

.a lds , Blockbuster Video . CopicentroXerox, U SA Jeans Shop, D ryc lean USAhav e becom e commonp lace , and theirem phasis o n qu ick. an ti efficient se rv icew ith p ro duc ts o f a known and cons is tentquality, has enab led them to cap ture anestimated 20 % o f the m ed ium -size reta ilma rke t .Accord ing to th e M ex ican Franch iseA sso cia tion (A MP) d \ere are now approx -lmately 400 franch ise firm s operating inM ex ic o. w ith over 40,000 outlets. T he 180f i rms affiliated to th e AM P em plo y som e135,000 peo ple and hav e a com binedtu rno ver o f $3 billio n per year , o r approx -imately 1% of GNP.

Mo st s ig nific an tly h ow ev er , f ra nc his in gis being seen by a grow ing num ber o fM ex ican firm s and sm all entrep reneu rs asU m l! lU 1 ~ u f s U l" Jlv tn g I M e c ur r( !n ! ee6Mmlerec ess io n. P ro of o f that is the fac t that th erec tor grew by 14% in 1 99 5 w h ile th e r e s tu f th e econom y w as go ing in to a no sed ive .

A cco rd ing to the AM F. [he num ber o fM exic an tra dem arks being so ld underfranch ises inc reased from 28 0 to 39 0 du r-ing 19 95 . and the propo r t i on o f M e xic anfranchising firm s com pared to foreigno n es o pe ra tin g in M e x ic o in cr ea se d f rom4 8% to 57 % o f th e to ta l.

"Franchis ing is being inc reas ingly seen( X:T O BE R 1'1 96
http://www%27.wendys.com/http://www%27.wendys.com/


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means for firms to " expand or to sur-says Jose Luis de P rado . (he AM F'smanager . "AI the S am e tim e. there

ld,.ed, of medium and upper- level..... S. executives who have been laidover the past year , bu t who are usingredundancy p a y to set up franchise

120 franchise outlets dosed1 9 95 . p rim ar il y due to un serv ice-

bank debts, nn additional 1.972 ne wts w ere opened up. And practicallythe new franchises areg opened through

an d no tb an k lo an s.number o f innova-self-help Iinunce

have developedthe sector over the p~stplc of years. some of

h av e become finan-f ranchise operationsns e lve s ," de Pradoalmost feel ashamed

ay it. but we havev e r y well through

recession ." admitsz Feher, th e fran-ct{)r of Steren, aan electronic corn-m an ufac tu rer and

b uto r , The firm has

d th re e fr an ch is es this year. reachingof 1 4 f ra n c hi se s . in addi t ion to its

own stores." We 'round t h u l peopleupprouching us offering to operate

r a franchise. We decided it wus IIr e a n d quick way to expand" .ot all have been doing so well, how-. According to Cesar Cervan\e~. the:rul manager of Taco Inn, a Mexicanfranchising firm, th e growth inlack economy is undenninillg estab-d businesses.or every restaurant ill The country.are now seven street stalls selling

food" he says. The f oo d f ra n ch is e sec-for 33% of the franchising

m ake incomes stretch further, manyopt to have a quick l u n c h in t h e

rather than even a cheap res taurantoffered by the m any franc his e firms,

< I common sight ill Mexico City to seee employees chatting and eat ing

01 sand wic hes s tund ing alo ngs ide

a street stall d ur in g th eir lunch hour, ratherthan sitting in a res tau ran t 01' cafe ."Whenever J go out to eat with some

friends it is to a local taco bar which isowned by a relative," s ay s Irene Hernan-dez, Il 21-year old domestic employee l iv-ing in -Mexico City. "Prices there arcmuch cheaper than they are in the smarterplaces" .

Elsbeth Horbaty, a Sw iss office admin-i st ra to r J iv i ng in Mexico City who usuallyonly gets short lunch breaks. howeve r ,

r cs ta u r ail Is ."They tend to be much cleaner, have

boner service and you ar e less likely 10s uffe r an u tta ck o f Mo cte zu ma 's re ve nge ",In an et'tort to keep lower-income

clients and to support its franchisees,M cDonald's is providing credit 10 ne wfranchisees , which for small and medium-sized busincssc is otherwise practicallyimpnssihle to obtain from the bunks.Franchising has thus becom e u viableoption fo r survival in Mexic o's r ec es sio n.The: result will be that franchised busi-nesses will emerge as < I dominant force inMexico's retail and service sectors as andwhen (h e economy recovers,Chile. Chile may hold the rights IO LatinAmerica's mos t dynamic economy, butwhen it comes t o f ranchi s ing , the royaltieshave ye t to roll in , Despite the tremendouspotential observed by those in the indus-try. the development of brand name chainsis still at a preliminary stage, acco rding toindustry insiders.

., "' ,I' -

I!

! i'I .IIIII! :~I

LATIN TRADE98-S -8

41

. : l ~ ~ \ " : 0 I t\i\:~


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Be the first to got In on: /\ recognized brand name in Inngullg(~S that'sseco nd to no ne A ho t. ground f lo o r oppo rt un it y :\ complete support system A company that's bean In business

1 1 M years a n d i s s t i l i growing t\ proven bunncss nilh 3i!i! company WU ll! l! > wU llt. lw l\! ll:;oUlUl illll!llJ!>llJl!!,tC!tll 01' n IX U U I'I I L :! . J l I ' l lI u ~ l \ l ! m , J . t U}iLI~IIl I \ILtIl I1 loday l o r a,Iuw uuu IJIUI.IIUll~. 1~IIIU uui u u w \lXI~IlIlI~auu l 'UWU l'U ll li t I IW I II II ~ Y l IU l 1o wn B erlltz L anguage C anto r elln bo l(52-5) 2030452 ( 1 -110 0) 6 2 6 -6 41 t}MEXlwr: rrv(52S) 255 -3817'., (1-601 ) 5143046,'4. \~I.\I \"

lnstrucunn'lh.n~lnllll'lI 'u bllshl l lK

~(JfJj'r;/ltJ II!! prtl,';}"'('1U", rill'.'!. m al ( Jo l"w/h'rl' til , ' ( ~ l . r f ' l " nm I I f ' h~J(j{{!lIIt"dt'.l"ii/allm't'fllfifWIII. S:r.l'J,jIlJlJ. S,'jotl.(li/V ut.s.,

C""h III tID th~ Rrowlnllf a~ 1 fQl Id Ind""try 1In1! I1 Il ~n l inIn te mn tlo na t P O PI! Y'' o r TeX&~/(;burch5 Chlck~nI ' I" l I l1chl~e. [lIrn (rom our experlnce:, 44 succe .. ( ul y '1 L I n th e In du .u y 20 ~ ar s Intc rn ~lil> n.l p rv se nc e l>C'VclOt ) ln~" n""untri ~n d I~'rrl(orll:C:s, lit Itl451. hllve stopped short ofwholeheartedly embracing the concept,says G is ela C la pe r, p re sid en t o f th e S an ti-1189 frl'ln~hill' iQll5wltanQY Franehlnlntornl ll i 'i 'IUII ,

'1'1._ t"~:If!lni' finU'n,h. n.....nsombined with a lack of knowledge aboutfranchising ha s led to an in it ial reluctancean d d is trus t o f the industry, s he s ay s.

"T he concept w ax po orly intro duced\~\ i\\ \ \U\) \ \ \ \\ , \ \~ I.'\)i.\\\l\ ') \ \ \ 1 . \ \~'t\\,,'tthey didn't jump on It so quickly," ~Ily~Ciaper. "B ut they arc geulngto know jl ,gnldually, s low ly . C ha ngin g h ab its taketim e, m ore tim e in Chile than else-where."

B ut the difficulties o f th e m a rke t, asevidenced by the failures o f ice c reamc ha in B askin R obb in s a nd fa st food outletArby's, s tand in sharp contrast to theglcuming s igns fo r Blockbuster Videol ind th e troops o f mo to r cy c le s deliveringD om ino 's Pizza. A nd fo r the USA-basedfranchise Au B on Pain , Chile had therisht m ix o f ingredients to turn theupscale fas t food chain's firs t fo rayabroad into II lo ca l s uc ce ss story; eco-nomic stability, p o litic al tr an sp ar en cy a ndII burnling International bUsiness center.Since settin g u p opera t ions in 19 93. th eworld's le ad in g b ak er y c a fe is p la nn in g too pen Its 14th and I!lIh outets i n San ti agoby the end o f the year . with l it tl e co rnpe ti -tio n in sight. Already surpassing its origi-nal business plan go al o f 10 lo ca tio ns inf ou r y ea rs , ABP C hile is getting re ady tomove into Argentina w ith in th e n ex t yellrto tw o years , fol lowed by e xp an sio n s in toUruguay and Po tu . says g en er al manage rMan in F er re cc lo ."It was a complete ly new concept fo r acom pletely new m arket. W e We r e r ea llys urp ris ed w ith h ow fas t sales w ent up andhuw Iast it caught on," says Ferreccic.

" Ru t a ny th in g th at's go o d, lik e IIcroissant.Chil ea ns a re going to adopt." -With additional reporting by Andrea

Cum{Jb~1l in Santiago, Tim Coon inMexico City a nd A da m Thomson in/Jogota


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FECHA: OCTUBER 1996.MEDIO: LATIN TRADE.SECCION: FRANCHISING.PAGINA: 381 391 401 41 Y 42.NOTA: Continua {Art. de 5 Raginas}.

Seguimiento de Prensa

FRANQUICIAS1

FRANCHJSING

B r a n c h i n g O u tR

OD RIGO V IEGAS WAS PULL INGhi. hair out. On a recen t day , he w asal l .cl to o pe n th e maiaen store ofFut Frame. 1 1 1 1 Amer ican based chainth at m ake s p icru re fra me s, a nd h ad

p re pare d a . " O C k 1 l l i 1 fo r th e g ra nd o p en -ing. A m o de st a ffa ir , to be sure , bU Is o m et hi ng e le g an t t o im pr e ss h is f ri .n d sa n d p o te n ti al upsca l e c li en t el e i n JardimAmerica, D. sm~rl boutique . .studdedneighborhood of S30 Paulo. H. hsd evenn eg ot ia te d a b arga in p ric e w ith a lo ca lsign maker , who p r omi se d to p r ep a re a llthe stores banners, signs, arnJ placards at20 % below t he g o in g nue. BU I when th es ig n s we r e d e li v er e d, h e ha d a lit"T he y w ere a wfu l." V ie ga s recall s."T hey w ere u gly , of p oo r q ua lit y. u nll

h om e g ro w n b ur ge r j oi nt .w a. fo un ded m ore thanfo rty years agu, an dM cD o na ld 's p la nte d il!arches InBrazi l ian so il in1 97 9. B ut o n ly i n th e last 'decade o r so h av e th esebrandnames begun tospread by way of a f ranchi, iog sys tem.

(Only in 1 98 4, w e ll o n ils w ay to middloage. di a th e v en er ab le B o b's begin tof ar m ou t its stores.)

Wha t began as a tr ickle is no w a to r-r e nt , TW en ry y e a r s a g o, B r a zi l' s f rl ll 1c h is -.... wen; a handful of shops _. couriers,pizzerias , perfum eries. and such - ped-d lin g a f ew l on ely b ra nd s. N uw th er e Il l 'CI , 100 b r an d s b e in g so ld t hr ou gh n ea rl y at ho us an d c om p an ie s o pe ra ti ng f ra nc his esi n B r a zi l. These s ho p s, c li ni cs , a nd ser-v ices are expec ted to ring up sales o fo ve r $11) b illio n th is y ea r. T ho ugh th en um be r o f chains h a . < s te ad ie d , a nd m a ye ve n s hr in k i n th e c om in g y ea n; ( du e tom er ge rs a nd b uy ou ts ), th e in div id ua lf n t l \ C ' .h i f W " J . : art! hcVlmin8' A.r.r.nniinB to t h l r !F ru n ch is in g G u id e, a n i nd ep en d en t s ur -v ev o ub lish ed b v E dito rs G lo ho . fra n-chis ing ha s g ro w n f ro m a n a rc hip ela goU l I i V l I l l L l f OO N U lN l .' l 1 0 1 11 1ompl~ . tn I ~ O "tbere wen! 3.236.!OreS operating as fran- .o;bise.. Five yean la te r, th e n um be r ha dmultlpllod mo re than four ro tc , 1013,998. Las t year t he t ota l reached23,765 units , a nd ! hi s y e ar is e xp ec te d toswel l to 3 1) ,0 00 . T h ou gh th e v ery c on -cep t o f franchising. brings to m indA me ric an ga dge ts a nd g oo die s, B ra zilia ncompanies re pre se nt a lm ost 9 0% o f th ec ou nt ry 's t ot al f ra nc hi si ng market . Fo r

the longes t time. foreigninvestors ..- except for thep re co cio us M c Do na ld 's ,w hi cb w as b an kin g 00 th efuture - w ere put o ff by th ec lo sed sh op p olicies of

B r a zi l, w h i ch s e ve r el y l im i te d r em is s io nof r oy al ti es , a nd c ho ke d n ew b us in es se sunde r r e e ls of r ed t ap e a nd h ea v y s ta rt -u pcosts.T he restric t ions e nd ed u p b y f or ti fy in glocal brands . w hic h started sm all a ndth en gre w in th e gre en ho use ec on om ystore by store by store. B e ? ' s i s th e p re -

From Brazil to Chile, Internlltlonalfranchlae chain. are .. ttlng upshop - and oonsumer. are liking It.BY MAC MARGOLISRIO DE JANEIRO

L ik e R o dr ig o V ie ga s, a growing num-b er o f L ati n A m er ic an s a re a ba nd on in gol d suppliers and s ho ps f or n ew , shiny,neon-li t o ne s th ~1 w o rk n im bly a nd em - c ie ntl y i n a m ar ke t .. t ur ate d b y t he s lu g-gis h o r t h e s lo p p y.The f ra n ch i se i nv a s io n i s mostly from

. t he U n ite d S ta t.. , b ut s om e m ark et s a res ee in g s tr on g g ro w th In locally devel-o p ed I ru n ch is e. s . Th e f ru n ch ls e boom ha s

b e en s p ur re d by 0 combina-tion o f pent-up demand ,inc reased purchasing powe r KOO aggre s -s ive markel ing ..,ull boom. F r.m ch is e s n ow op e ra tein 1 22 d iffe re nt s ec to rs o f B ra zil'. econ-omy, u f fe r in g e v e ry t hi n g f rom bu rg e rs t obonbons , f rom software 1 0 sk in c ar e. N o tthat f 8 5 1 food and chain stores a re n ew toBru~. Bob' s , Brazil'. w i ld ly p o pu la r

complete ly unusable."In a p anic h e rushed over to c om pe l-

in s sig n sh op , an d braced fo r th e badn ew s. N o pro blem . said R enate L ap aC la ro , o f F aA t S ig n a no th er Amer icanbased franchise. "In a few hours, theproblem w as resolved," s ay s V ie ga s,Since then, V i eg aa h aa cal led on no onebu t fast Signs fo r a U the "ore's displayneeds.

30 LAD


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FECHA: OCTUBER 1996.MEDIO: LATIN TRADE.SECCION: FRANCHISING.PAGINA: 381 391 401 41 Y 42.NOTA: Continua {Art. de 5 Raginas }.

Seguimiento de Prensa(

FRANQUICIAS2

FRANCHI SINOcon ti nue d f rom pag e 38m ier exam ple . w ith 77 s to res and plen tyo f s vu o rs I O< .l k! n~t o b u y n u t t hi .~ p e r en n ia lhot property. Another i s Bot icuno. II oneIII\\~ MU~ stere In CuriUM wnlen na~swollen to 1.200 s to re s s ei lin g p er so na l.care products in Brazil and beyond. Stilla no th er is Localua . t he l ea d in g ca r rentalc om pa ny . w ith 800 agencies , $400 mill ionin y ear ly rev enues and a g loba l reacn th athas taken irs franch ises from ChI le toA rub a lund is he ading ev en fa rthe r afield,to M exico ) B ut in 1992 , t he c o ur ts re in -terprc ted the B razilian la w bo ok. and thelid was lifted fo r fo re ign investo rs . w hom ay now easily and quickly set up theirs to res o n Bruzihun so il a nd freely rem itpro fits and ro ya lties . T hey h av e found aw elc om e e nv iro nm en t. O ddly. perhap s.f'i'nisn fnw'i'hiuTi h~"'i' 7"'1) Q r].,;... ~hQ"'"of th e m arket w here th ey arc b est kno wn :fast food. However, two of every threefirm s in rh e rapidly ex pand in g areas ofgraph ic s . pho to graphy . and to urism andleisure ure foreign The sheer size of thiscountry. wi th u POPUIH l jOr l or 10 0 million,IS o n e a p pe a l

"B razil is a country of conrinen taldim ensio ns , and a natural en viro nm en t fo rIi f'runc his ing system ." says Ar l s ude sN ew to n. d ir ec to r o f fr an ch is in g fo r L oc al-iz a c ar r en ta l. b as ed in B clo H or iz on te ,

T here i, also the endless b razilianp ala te fo r n ov el tie s, M a ny fr an ch is es h av eo nly to un fu rl their aw nings and the cus -to mers w ill qu eue u p at the do or. B u t p er -hap. the biggest boost cam e from stableprices, vi rtuall y 01ien to Brazil ians for thelas t 20 years . T hey pav e com e courtesy o fthe R eal P lan, a Ip lnn nam ed fo r th estrong, dollar-anchored currency intro-cuced by Fernando Henrique Cardoso, aF on ne r f in an ce m in is te r w ho p ar la ye d e co -n om ic s ta bility in to a s uc ce ss fu l c am pa ignfo r the pres id enc y .n 1994. T ho ug h b us i-n es se s s till c om p la in o f s co rc hin g in te re stra te s a nd [h e go ve rn me nt' s re str ic tio ns o nconsumer credit th e stro ng c ur re nc y se ntpeo ple o n a buying s pr ee . M an y of themhav e landed at the franch ise rs ' do o rs .Arbys began franchis ing In B razil in1992 . a nd a lr ea dy rune o f its 14 s toreshi)', mi., .h. nmlH. lifif'll i h l' li n ', r l it r rfbes r se lle rs . tu rn in g o v er $1 m ill io n o rmore pel' yea r in sa les . L ikew ise, K en-l l P " : k Y f'lil:u Cl l i \ , . . " - e l l ! > l ea d in g O r ll li ii cnnlUrv 1I~11 i II ' i imFli l iny r'i''1'ut1 'i'f f r . .. ..11;....."' year. B lockbuster video first opened itsMW In ~!I.II'~UIlJ In MllrCn, "Ill! UIJ\!auylo cal v id eo sto re s are trem bling. R enateCiero broughr the D alla), T CX QJ buo co

FustS ign, s to re to Sao Pau lo int 992 . N ow there nrc 19 . and bythe end o f this year th ere w ill benu fewer than 2S. l':ucll fratlchlseto da y se U s fo r $ I 30 ,000 , u p fr omS B O , O O O tw o years ago . B utBrazilians don' t seem dau nted bythe price tag. A fter aU , in barelyf ou r te nd er y ea rs , C la ro 's p io ne ers t o re i , r ; ; r ak iu g in $ 55 ,0 00 a m u nth- a sure s ign fo r o the r i nv es to r sl oo ki ng f or o p po r tu n it y.

So far , the failure rate o f fran-chises is a ls o lo w: a ro un d tu per-ce n t o f th e fr an ch is ee s go u nd er, Qrate compa rable to the UnitedStates with a fo . r less tempestuouse co no my . W hY i" O , . , . h " r o ; : h, .r~ ue _' 1I(' .. r .p m .n l,r vl J < :~ Io m LATIN TRADI! 38CiOBER \991'1


8/10

FECHA: OCTUBER 1996.MEDIO: LATIN TRADE.SECCION: FRANCHISING.PAGINA: 381 391 401 41 Y 42.NOTA: Continua {Art. de 51!aginas }.


FRANQUICIAS3

FRAPfCHlfJlNQcont inu ed f rom page 39

B UI there have also been problemsBurger King withdrew after the owner oft h e f ra n ch i se in C olo mbia, the C atho licChurch, sold the operations without con-sul ti ng the fast food company. And PiallHut has been criticized for lack of prod-uc t unifo rm ity in irs p roduc t ac ro ss itsnetworks of restaurant Quiets One of thereasons, say experts, is that the muste rfranchise was so ld in B razil, fro m whereth e three reg io na l fr an ch is es in C o lu mb iaa r e r u n

Y et in du str y in sid er s a bo ut o ptim is tico n t he m ar ke t's p ote nt ia l,

"Colombia has 8 dynamic f uture," saysFrunsi sco Javi er Panno. charrman of theColombian Franchising Assoc ia tionMexico. Fur the M e xic an c on su me r whowant s to e at a h am bu rg er, p iz za o r 0 ((I .CO,or IU bu y II pair o f jeans O r to change theoil in the family car, II is becomingin cr ea sin gl y p ro ba ble th at


9/10


FRANQUICIASFECHA: OCTUBER 1996.MEDIO: LATIN TRADE.SECCION: FRANCHISING.PAGINA: 38, 39, 40, 41 Y 42.NOTA: Continua (Art. de 5 Qaginas}.

4

~ .t means for rums [0 expand or 10 sur-rv e . " _ " ; ; 1 . Y ' J o-e L uix d e P ra do . (h e .W F'sc nc r a l m an ag er 'AI th e sum e tim e, the rere uunured- (J)" medium and upper-levell i~ l: l. : ~: ; eX, - ,_ "J {j \C, . .. .. . hu have been la idrl O Ver lhr pas t ycnr . but w ho are usm g'ic.r r cd cn c a nc y PflY II) s et u p f ra nc his eutlets ..e, I th ou gh 12 0 f ran ch is e c ur lers c -lose d

vnng 1995, p ri rn ar il v d ue to un s ervi ce -blc b ank d eb ts. In addu.ona l ! .972 new.l the new trnn ch.ses are: > ; ) 1 g _ op c n r d th rough:::If,fln:'lnclng ,lnd not.itb bunk loans."A number of iWlOVU-

v c . . ; . . : I I - i l e l p Iin a n c e,~;::[lt.:~ ]1.:\,( developed"I: lr_c ..ector :)\'cr th e past,JL.;r.k dt' y e n : v . SOllie ofhi;,:-h h av e bec om e finan -

: < . 1 1 fr a nc hiv e op er m io ns' u-m sclv e . .. de Pn.u10

; , ;,! n'n q r ee l a sh ur nc d: : .\> 1[. b u r Wf: h a ver c v c r',' \ ~ c l l thr ough

1:: r e c e s s io n." a dr nir sc rc nz Feher. the iran-msc director of Steren, aI ex rc o n .. le ct ro ni c COT-on e: .s man ulacturer a nd.ctributc: Th e firm has

\01.11of 14 fl':lnchi~~:-. In addilion to I\.~lUI owu s{nl '" .. W~ '( lond [hi li peopt c";l'.eJ dpprUdL.lll11g U~ 11llr.!ring to opcnucndc r J fr a uch rse . W e riec id cd il WHS II. cure anu "-J~II~'k wJ.y to e xp . .md"/ \ot ,11 hove been d oing s o w ell, how-

' cr . According (0 CesJ.I Cervarue-. the~'l)l'rcdJI1.ln.lf'u of T". .o Inn. .1 Mexican

firm . th e gro wth inu ud e r m. ni ug e stn b-

'For ever y revt au ra nt in the co un try.icre are nnw seven street stalls sellingL.. toed" h e s ;_ t ys . T h e food fr an ch is e s ec -'I clU;I_lllTll,(,t( 339 ' ( of t he f ra n ch i: ;i ng

To make I1H..I.il)Ci s tr et ch lu -th er . m an ycoplc Opt ttl hJ\'e 0. q uick lun ch in (her ecr 1'~1lhC'! .han ev en a cheap restaurant

1::


10/10

FECHA: OCTUBER 1996.MEDia: LATIN TRADE.SECCION: FRANCHISING.PAGINA: 38, 39, 40, 41 Y 42.NOTA: Continua {Art. de 5 ~aginas).


FRANQUICIAS6

Be the nNI to rot In on: A rec ogn lzed brand nam e In Inngun~"" th"t'~seco nd to nunn A hot . I Ir ou nd n o or o p po rt un it y . . , ,, ,m p l " , " ,uppol1 sj'stem A company that 's b e A n In bu.in"""Ill! year . lin d 15 stili growing A pruvon bU3Inc, ,"~"ith n~ompan] WUWI~ WU I hJwlulI: ; O U I I l J i" l l t tu~UJl!r! ( ~ tl l u r n tX IJurll l : l . I' r lllll!I\ lli1illll.Oi'I)(J~"I"'11 luday lo r a, ll l' .1 1 U I I~ L J t u uu n e . I'JIIU U Ut H Uw 1'.tWIII~ a l lu i 'UWUi 'Ull l ll I IWl l ll l l! you I'own lle rl ltz Langu4io Cenlo~ ( ' lUI bol(52-5) 2030452 (IgOO) 626-641'1~~:Mm f:ITY r. t. 11o\:1.\

FRANCHI.INac on ti nu ed /r om p ag e 4 1Boutini jus t 56. Inosily foreign fran

ch i ses, the industry g en er at es a pp ro xi.mately $120-$150 mi l li on anoua ll y , repre-""Dling Je3$ !h ;u l I% of th e country 's relllilsale s . . .

S inc e Piua Hut an d Kentucky FriedChicken f i rs t opened up th e markel in th eearly 1990 th e f ra nc hi se i nd u sl ry inChi le ha l g r own by 30% . T hat num be rcould be a 10 1 h ig he r. b ut p ote ntia l fra n-" h i. > e: c: s , J e ur , hQV " s ro pped shan ot'wholehear tedly embrac i ng tbe concept,s aY i Giseld Claper, p re si de nt o f t he S a nt i-Ag9 f ra n. hi ~on6wl lan iY Fr onDh iul n to rnMi~n"1 ."n.. . ,. .. .,atnn.' , .nu,..nih-. n.. .. .. .. om

bined with a lack of knowledge aboutfl1iJ1Chisinll as l ed t o a n I ni ti al reluctancean d dis t rus t of th e in du su y, s he " " Y ""The concept Wall p o or ly l nr ro d uc ed' \ 1 , , 111 ' \ \ ) \ \ \ 1 \ 1 \h e \ \ 1 1 . 1 1 \ \ \ ) ~ I - . I \~'t\\1(tthey didn't Jump on il so q U i c kl y ," , ay ,Claper . "Bu t t he y a rc g et ti ng to k n o w i t .BT l id u ai ly . s low l y. C h a ng in g h a b it s talc.t ime, more tim e in C hile th an e ls e-where."But t h e d i ff i cu l ti e , o f th e market, as

ev i denced by th e fa ilu res o f i ce c re amc iW n B asm R obbins and fM t f o o d o u tl etArby" , stand in sharp co ntru t to th e 'c um in g sign s fo r Bloc:kbu&ler Videoan d th e t r oop s o f m o t o rc y cl es d e li v er in gD om in o 's P iz za . An d f or t he U SA .b as edfr anchise Au Bon Pain. Chi le h ad theright m ilt o f ingredients 10 turn th eupscale fast fo od chain 's firs t fo rayab ro ad In to . local s u cce s s s to ry ; e co -n om ic m b i li ty , po l it iCAl t r an spa r ency an da b U ld in i I nl ll m .t io na l b U ll n .. . conlor .S in ce s et ti ng u p o p er at io n s iD 1 99 3, th ewor ld ' , J o a d i n & bakery c ll fe i s planning 10open l IS 1 41 11 an d "! h oulel$ in Santiagoby the en d o f l be y ea r. w i th l it tl e c cm p et i-l ion in s ig h t. A l re a dy s u rp a ss in g its origina l b u s h > e & s p la n g o al o f 1 0 locat ions infour years , A S P C hi le I s g e ttin g r ea dy tomove i nt o A r g en t in a within the D."t y . . . .toIw o yun, fol lowed by e x pa n si o ns i n toUruguay an d P ow , s ay s g en er al m a n& i erMlI1in Pemccl o ."I I W8I a complete ly ne w concep t (or.c om ple te ly n ew m ark et. W e w ere real lys ur pr is ed w it h h o w f l l S t s ale s w en t u p a ndhu w f""l it c ilugh l on ," s ay. Ferreccio," R i l l any thi ng th Il t 's good , U i c c a cro is san~Ch il ea n s a re goinl l lO ado pt." -With adLiiliolllllIporting II y Andrea

Cumpbel! in Suntl ag, Tim Cuun inMexico City and Adam Thomson in/Jogolo

O CT OB I! R 1 99 11

( 52-5 ) 255-3817 (1-609 ) 5143046

III U.TIN TRADE

1 I, I pi l l, ' h. W o r ld 1 :" '0 0, ," .1 0- "0 ! .~., .b09)514-%75Instrl.h:Ullll' T h ' A n J j l n \ ! u l lPubl lsh!OI(

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Clllllh I. IN I tM . rowlnM r ue r oa d 11W t. .. .1r)' .nd u pt on a nl nl tmaUon.1 Po~)'" , o r T txAI ICku rcb t Cbk~l'n"IRdliH, [ ..... (nHIl our nprnitnU: . . .. I lU .:LUIl II IW r .. " InrM Indl.l ty l O)'HH Inl('~ r""Knc( OcVdopUl" itll~ '-"UWlttluand tt'rtkorl(j . .l a nd ., (;hicK" br.N1. in l h e' w o rW VYff ;J,ilO n."l;al,lr."h wuridwi.,lo, "ICl ''''ll1llMQ), " 'WI"-" \ I W o r ld ~uattc."h I" A Jyn llt " '" ' T Inlcnuulonali)'IoI.'lIltdfU(\pon u r n " , . . : .I n I ~ we a \l "1 ': I" ," ,1UI"I J\:....~ u r ' l I ' "4Ip"nln~( \' er r IWu a ll '" ;Ib . , . . UM m. , u n r . , . , tm WI wlll lJu iI) 11J 'Jn .~.-~--~

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octubre de 1996-latin trade

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