These three franchises triumphed despite the COVID-19 pandemic

During 2020, it is estimated that about 5 percent of the branches linked to a franchise closed their doors due to the pandemic, despite the fact that no brand disappeared as there were some businesses that managed to successfully resist the effects of the health emergency.

“We have a closing rate of 5 percent (of branches), and we can understand it by the structure that allowed cost control, relationship with suppliers and agreements,” said Enrique Alcázar, vice president of Franchises of the Confederation of National Chambers of Commerce, Services and Tourism (Concanaco-Servytur).

He added that, despite the economic environment, 2021 could be good for the franchise sector, because in 2020 people have received money associated with inheritances, insurance or compensation for deaths or dismissals, capital that they could invest in this type of business .

According to the Mexican Association of Insurance Institutions (AMIS), more than 5 thousand 673 million pesos have been awarded in compensation to relatives of the deceased by COVID-19.

The franchise sector grew 4 percent annually in units, despite the drop in consumption due to COVID.

“We were planning to grow 8 to 9 percent and we stayed at half. This year, more than profits, we are satisfied that there are no losses, “said Julio Beleki, president of the Mexican Franchise Association (AMF).

In 2020, the AMF obtained a loan program with HSBC, to support the growth of this type of business, in addition to entering into agreements between franchisors and franchisees, extensions or eliminations in the payment of initial fees and discounts in the collection of royalties.

“There are more than 97 twists and turns and the reality during the pandemic has been different for each one, in general, it would increase the return on investment by 6 months,” said Ferenz Feher, CEO of the consulting firm Feher Consulting.

Although the return to school will still be virtual in 2021, the Canadian-based Maple Bear franchise plans to add four new branches in Puebla, Hermosillo, Querétaro and Metepec, which will be added to Lomas Verdes and Chihuahua.

“We accelerated the launch of our digital learning community, which allowed us to achieve this expansion, we know that education is a segment that has traditionally been very stable and that there is great interest in the middle class to give their children a level education. international ”, said Mateo Cuadras, director of Expansion for Latin America of the Canadian company.

The investment is around 200 thousand dollars, about 4 million pesos, the return on investment is maintained in 36 months.

With a franchise model that lies in the sale of uniforms for the health, tourism and gastronomy sectors among others, with the health emergency, Gallantdale focused its batteries on the production of coveralls for hospital workers, after obtaining the sanitary registration to commercialize its antichlorite and antibacterial fabric.

Its plants produced 500 thousand garments annually, with the pandemic its production rose 70 percent to 850 thousand units, which meant a 20 percent increase in its workforce.

Last year they reached 30 branches, of which 10 opened in the middle of the pandemic, their sales increased by up to 40 percent and e-commerce went from representing 3 of their sales to 13 percent.

The investment amount per branch is 1.7 million pesos, plus 100 thousand pesos that are recommended to have to start up and the investment return period was reduced from 18 to 12 months.

The Master Franchise that has seven food brands: Churrería Porfirio, Bubble Waffle, Frozen Donunts Flavocup, Sky Rocket Pizza, Hot Run and Splash Fun, reached extension agreements with shopping centers, although it had to close 3 percent of its units, because with Walmart there was no support. Despite this, it fought 2020 with 153 branches.

“The stores that we have at Walmart zero support, so it was really outstanding to cross 2020 and we survived, we had a 3 percent closure due to no lease agreements,” said José Luis Uberetagoyena, co-director of Franquicia Master.

He explained that of the 153 branches it has, 22 percent still do not return to operations, because they are kiosks or because their location does not have a platform service such as Rappi, Didi Food or Uber Etas, a channel that already represents 70 percent. of the incomes.

“Their returns go up to 24 months, and the 30 that were opened since June the return will be achieved in 18 months, supported by the social media strategy,” said Vladimir Ramírez, co-founder of the firm.

Depending on the brand, the franchises cost from 350 to 600 thousand pesos. By 2021 they estimate to open 15 branches in the food and beverage sector and two Splash Fun.

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