Franchise market overcomes 2020 losses and grows 10.7% in 2021, says association

Franchise revenues in Brazil went from R$167.187 billion in 2020 to R$185.068 billion in 2021, a nominal growth of 10.7%. The data were released this Wednesday (16) by the Brazilian Franchising Association (ABF).

The annual balance sheet shows that 2021 revenue came close to the level recorded in 2019, pre-pandemic period, which was R$ 186.755 billion.

In the fourth quarter of 2021, which has already been compared with a period less impacted by the pandemic, growth was 5%, reaching R$ 56.663 billion, 3.1% above the same period in 2019.

For the association, the easing of restrictive measures, the good performance of some sectors benefiting from the greater permanence of families at home and the efficiency gains of franchise chains, which have invested more in the digitalization of their operations and in new business models are factors that contributed to this good performance.

According to the study, all 11 segments listed by ABF showed growth in 2021 compared to the previous year. For the second consecutive year, the main highlights were Home and Construction, up 19.3%, and Health, Beauty and Wellness, up 10.5%, with results obtained on a non-depreciated basis.

For André Friedheim, president of ABF, the data show that the sector is reacting after the impacts of the pandemic. “The data shows that the franchise market recorded a more homogeneous recovery in 2021 compared to 2020.”

The study also points out that more companies have adopted the franchising system in the last year, as well as a greater dissemination of models such as ‘home based’ and digital franchises.

The survey also reveals the improvement in job creation. In relation to 2020, the number of direct workers in the sector increased by 12.1%, from 1,258,884 to 1,411,319 last year, and 3.9% more than in 2019.

Networks and units grow

In 2021, the association identified a growth of 9.1% in the total number of franchise units compared to 2020, and of 6.2% compared to 2019, totaling 170,999 operations. Mortality was 5.5%, returning to levels close to the pre-pandemic period.

Regarding the number of networks, the balance for 2021 indicates that there was an increase of 8.0% compared to 2020. With this, Brazil totaled 2,882 brands last year compared to 2,668 in 2020.

impact of inflation

Regarding the impact of inflation in the sector, the association identified that 67% of brands claim to have passed on the impact through price adjustments, but on average only 30% of the total impact received. In addition, the readjustment of operations, carried out by 58%, and the change of suppliers, carried out by 44%, were other measures taken to manage the effects of inflation.

projections

For this year, the association projects a growth of 9% in revenues, 2% in networks, 5% in units and also 5% in the number of direct jobs generated by the sector.