The Brazilian franchise sector is among the world’s largest and sophisticated in its business practices and growth. The sector has consistently grown faster than the overall Brazilian economy and has become one of the main growth areas, used as an expansion strategy, even by the more traditional retail companies.
Franchises are particularly welcome in the Brazilian economy because of the proven business model that considerably reduces the risks of a new company going out of business within the first three years of operation. In conjunction with the improvement of the Brazil’s socioeconomic situation during the past few decades, the market saw a constant growth even during economic crises and showed growth rates above the Brazilian GDP.
The growth rate is astounding. Brazil’s franchising sector has tripled in revenue over the past decade as the middle class blossomed. Franchises brought in 75 bi-llion reais (about $43 billion) in 2010, according to the Brazilian Franchising Association, which tracks domestic and international brands alike. The group estimates Brazilian franchising growth at 15 percent last year and forecasts 15 percent more in 2012.
Brazil now has more than 1,800 franchise brands, at more than 90,000 outlets.
The ranking of the top ten franchise chains in Brazil, both by revenue and number of units show the dominance of local brands over foreign ones. Only two out of the top ten performing franchise brands taking revenue and number of units as reference are foreign.
Ranking by Revenue | Ranking by Number of Units | |||||
Brand | Segment | Brand | Segment | # Units | ||
1 | O Boticário | Cosmetics | 1 | O Boticário | Cosmetics | 2,834 |
2 | McDonald's | Fast Food | 2 | Kumon | Education | 1,599 |
3 | Habib's | Fast Food | 3 | Colchões Ortobom | Matress/Furniture | 1,387 |
4 | Shell | Gas Station | 4 | McDonald's | Fast Food | 1,291 |
5 | Colchões Ortobom | Matress/Furniture | 5 | Wizard Idiomas | Language School | 1,246 |
6 | Bob's | Fast Food | 6 | L'acua di Fiori | Cosmetics | 1,166 |
7 | Localiza Rent a Car | Car Rental | 7 | Fisk | Language School | 1,001 |
8 | AM PM Mini Market | Convenience Store | 8 | AM PM Mini Market | Convenience Store | 963 |
9 | L'aqua di Fiori | Cosmetics | 9 | Hoken | Water Filtration | 898 |
10 | Drogarias Farmais | Drugstore | 10 | CCAA | Language School | 808 |
