Spain: Franchise 'low cost'

The economic crisis is changing the business model of franchising, which has also pointed to the low cost. Difficulties in accessing finance from banks have reduced investments in opening of this activity, which has led to the emergence of new models of affordable franchisee. Thus, according mundoFranquicia Consulting, begin to proliferate the 'corners', 'shelves' or sharing of facilities, with dwindling investments.

You can talk about franchises 'low cost', in need of franchising power to cut costs and offer affordable products to stakeholders, recognizing the general director of the consultancy, Mariano Alonso.
"Many flags are optimizing their resources and significantly reducing or even eliminating their rights of entry to encourage new entrants and boost its expansion," said Alonso in the report 'The franchise in figures 2009'.

Alonso stressed that even some plants start to franchise-owned stores as a way of disinvestment, while others choose to outsource services to save costs.

Another phenomenon detected because of the crisis is the growing interest of the unemployed population by this type of business, a trend that began to worsen from the second quarter last year. "Even some people unemployment concentrated in one payment to deal with an initial investment," Alonso stressed.
Industry figures

Franchising in Spain, composed of 823 banners, reached a turnover of 19.635 million euros in 2009 and employed 22,660 people last year, according to the report mundoFranquicia Consulting.

These figures account for 9% of national retail turnover and 12% of recruitment of retailers, while the total investment stood at 4696.2 million, with an average investment of 76,112 euros per opening.

"There are no comparable data in the previous year, but the turnover has been maintained or have suffered a slight decrease in relation to the environment, while the number of channels grew by 2.4% and stabilized the opening of new establishments (+1 , 2%) ", has detailed Alonso, who in 2010 forecast to increase turnover, employment and the number of openings this form of business collaboration.
Specifically, the sector of hotel and restaurant turnover was more than in 2009, 6246.7 million, followed by food (20 channels), with sales in excess of 2,170 million euros, and travel agencies (31 banners) with a turnover of 1,356 million euros.

The hotel and restaurant also stands as the sector that generated more jobs, with an occupancy of 69,533 people, followed by travel agents (17,239 employees), food (13,172) and clothing and fashion (12,133).

Regarding the structure of supply, there are around 62,000 business units in the Spanish market, of which 82%, about 50,500, corresponding to duty-free farms and over 11,000 units of its own. Of the total, over 56% of business units belonging to the service sector.

In addition, over 84% are national brands, while foreign supply operating in Spain, 69% are European education and 21% American.
Regarding the external balance, they find mundoFranquicia managers maintained the entry of Spanish firms in foreign markets, primarily Latin America and Eastern Europe because of its higher growth potential than the domestic market, while the other side of the currency has stopped the entry of European channels in Spain by the difficulty of access to finance, but remains the initiative of South America, using the Spanish market as a gateway to European markets.