6 concrete trends for the franchise market in 2023

In the face of a new government and economic instability, will the demand for entrepreneurship grow?

Brazilians have already been through price freezes, money confiscated in the 1990s, currency exchanges and, as they have a memory of the dark times of the economy, with every change of government there is much speculation and uncertainty in the country.

And entrepreneurs, who bet on their business as a means of livelihood and professional fulfilment, don’t stop investing, but they do so with some caution.

“If we look at moments of political and economic instability, we see that those looking for a franchise as an investment – ​​and not as a main source of income – usually wait a few more months to invest, waiting for the changes that will take place. Those who have lost their jobs and see franchising as an opportunity to start over can opt for low-cost activities, leaving the money saved for the emergency”, underlines Melitha Novoa Prado, a lawyer specializing in franchising, who has been accompanying the franchise chains for years in its management and expansion.

According to her, 2023 may indicate some trends that have not appeared as strongly during the pandemic, and others may become stronger.

“We have had major changes in the labor market and this has been reflected in retail. The increase in home working and its evolution towards the hybrid system has given rise to different needs and habits in the Brazilian population. This also gave rise to business opportunities which have now established themselves on the market”, suggests the specialist.

Investors are worried about the new government

Melitha’s partner, Thaís Kurita, who is also a franchise lawyer, notes that it’s not just investors who want to become franchisees who are worried about the government change.

“Franchisors have made expansion plans, but many of them are waiting for the first months and the definition of the economic policy that will be adopted to act – and many are also thinking of adopting international expansion as an alternative to the Brazilian market,” he reflects.

Melitha Novoa Prado and Thaís Kurita highlighted six trends for the franchise market in 2023:

• • New business formats

Franchisors know that investors are looking for companies with lower investments. Hence, many are creating different formats from their traditional operations to serve those looking to replace lost business with a franchise and those who have medium amounts to invest but want to start with smaller businesses. Kiosks, mini stores, store in store, shared spaces and other alternatives are on the rise.

• • Residential services

Brazilians have gotten used to staying at home more and, therefore, have started to value their home. Residential services, therefore, constitute a segment that tends to grow – from furniture to specialist cleaning, via home cooks and home health services.

• • Franchise from home

Brazilians also got used to working from home and, later, in a hybrid system (partly at home, partly in the company). Many people have liked this option and are looking for franchises that are formatted for working from home.

• • Delivery of everything

Still as a legacy of the pandemic times, franchises operating via delivery are still on the rise. And it is not only in the Food sector that they appear: the convenience of receiving products at home reaches all areas and, with it, the opportunities in logistics, dark kitchens and dark stores are also growing, all closely related businesses.

• • Internationalization

Little explored in the pandemic (for obvious reasons), the international expansion of Brazilian brands has been restudied by many brands. With vaccines available practically worldwide, Brazilian chains see an attractive possibility of marketing abroad, especially as they do not feel secure with the Brazilian economy.

• • Diversity and inclusion

Franchisors can become, if they act in a strategic and organized way, disseminators of awareness and implementation of diversity and inclusion actions. Franchising has the ability to rapidly multiply concepts and can create competitive advantages from innovative solutions to increase human capital, both from the point of view of the correct treatment of its employees and its customers. This trend will be strongest in 2023 and will continue for years to come.

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Camila

Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.