Editor’s note: This article was first published in January 2011, as a snapshot of the Spanish franchise market. The brands named, their growth, Sin Dietas’ goal of 100 centres in 2011 and Agratel’s offer may no longer exist or apply.
Franchising keeps growing at a good pace despite the crisis. The franchise system is probably the best way for a company to expand if it wants a presence in other provinces of the country. And for the franchisee, as we’ve said several times before, it’s a great opportunity to get into a business with proven profitability.
The franchises attracting the most interest from entrepreneurs, given current market demand, are probably those in beauty, fashion and related areas.
Women want to look good even in a recession, and on top of that, in this crisis, for the first time in Spain, in most households it’s the woman who has kept her job.
Not to mention that men are increasingly leaning towards “metrosexuality”, which is why franchises like Bye Bye Pelos and Lipocero remain among the most profitable franchises, with a fast payback on the capital invested.
Meanwhile, children’s and teen fashion franchises keep expanding, driven by the need to keep up with fashion and the good prices a franchise system can get by buying wholesale for the whole network.
There are also franchises selling more upmarket accessories, which would work in certain city-centre locations, since demand from more affluent customers hasn’t gone away. These franchises obviously require a bigger investment, although some of them promise a quick payback, as is the case with the Goldenpoint franchise, which sells clothing and accessories.
A few years ago we were talking about the growth of renewable energy franchises; today we can talk about how they’ve stalled, since it isn’t clear exactly who will capitalise on this kind of business. For now we can’t describe these franchises as profitable, among other reasons because people still aren’t aware of the need for alternative energy, unlike in the United States, where these franchises are already a byword for success.
Two other franchises are emerging. One is Agratel, a telecoms franchise that doesn’t require business premises. Its selling point is a guaranteed monthly income of €1,200 for the first six months. While it’s true that this franchise has grown in number of franchisees, I haven’t yet been able to verify its profitability, since I don’t know any Agratel franchisees. So we’ll leave that question open for later.
The other, a new body-care franchise, is Sin Dietas, focused on body aesthetics and facial treatments. It aims to reach 100 centres in 2011. Sin Dietas also offers franchisees plenty of advertising and customers excellent deals, so it’s starting to catch on in a big way.
Finally, and much to our regret, we have to single out the popular Carte d’Or franchise as one whose demand has fallen. Ice cream has a double problem: for some people it has become a luxury in times of crisis, and when winter comes, demand for this franchise drops.
So, to sum up, the franchises that are working right now because they’re in emerging markets are those in beauty, body care and fashion, which require a reasonable investment and usually offer a quick payback.
Further reading
- Advantages and disadvantages of a franchise
- Franchises dodged the crisis in 2010
- Profitable low-investment franchises
Featured image: Pan Pacific, CC BY 2.0, via Flickr.
