Published in Comercio y Justicia , 13 - July , 2023 Overview franchises

The franchise system in Argentina is already fully professionalized and is one of the most convenient and safe systems, either to expand a business concept or to access your own business with a conservative investment.

In our country, the vast majority of franchises is purely Argentine. Of that amount, 42% is monopolized by the Gastronomy category. But the second and third places on the podium are occupied by Specialized Businesses and Services.

The growth of franchises in a context of crisis seems like a contradiction. But the lack of investment options is a stimulus for franchising. Now, what is this modality about?

The franchise is a type of contract in which a company, the franchisor, assigns to another, the so-called franchisee, the right to market certain products or services within a specific geographical area and under certain conditions. This, in exchange for financial compensation.

The truth is that an inherent benefit of this type of business is undoubtedly brand recognition, since the client is already used to the services or products of the same in other establishments. This generates that the businessman in a certain way can save an important part of the investment of time and money in advertising, marketing and without a doubt in positioning.

Franchising is postulated as a refuge for small or medium investors, as an alternative for "self-employment" or even as a complement to already established businesses. Projecting in this 2023, the creation of some 19,200 new direct jobs is considered, which allows us to estimate that the system has some 232,800 people employed. Franchises do not guarantee success, but they do reduce investment risk. Undertaking hand in hand with an already developed and successful brand is a very valuable contribution of the franchise system.

The value of the brand is reflected in the performance of the franchisee and generates the value expected by the franchisor. Coincident opinions of experts and researchers affirm that franchising is the best guarantee of business success in uncertain contexts, since it facilitates growth and reduces costs, without diminishing the quality and control of the product or service. In the universe of franchises there are two brands that stand out for their exponential growth. One is Rapipago, whose format (bill collection and services, above all) allows it to be coupled with other businesses already installed, such as kiosks, lottery houses and drugstores. The other is Grido, the Cordoba low-cost ice cream chain, which has almost 2,000 points of sale in the country and abroad. The fast food sector is also in convulsion. The leading chain, McDonald's, currently has 222 stores in the country, including its own and franchisees.

Focusing specifically on the importance of the brand in franchises, we highlight that if the strength of a brand is highly estimated by the level of positioning achieved by its management, this influences the decision process of investors, who are involved in the marketing of it.

Aspects such as the trajectory of the brand, the availability of clear and precise information, the possibility of conversing with other franchisees to learn about their experiences and the support provided by the franchisor to transfer their operational know-how in the form of initial and permanent training become important. . The brands, provide, in conclusion, with a good profitability and a quick recovery of the capital; opening the doors to investors and entrepreneurs for mutual development.

A strong brand facilitates recognition and reputation in marketing in national and international markets.