Expert gives tips for people wanting to invest in franchises
Fairs are an opportunity to learn about the sector, but be wary of last minute offers and impulse decisions
The franchise sector has grown for the fifth consecutive quarter and has already returned to pre-pandemic levels in Brazil. According to the Brazilian Franchising Association (ABF), the increase in the first quarter of this year is of 17.2%, compared to the same period in 2022. There is no shortage of options for those who want to have their own business, and initial investment amounts vary a lot. With an eye on this contingent of interested parties, associations hold fairs that showcase more than 400 franchise options. Ideal event for closing deals, right?
A lawyer specializing in Franchising, Leandro Bonvechio, of BMF Advogados law firm, explains that these events are really important, but highlights that they serve to get to know franchise models up close and reinforces that decision-making must be done very calmly and involves several steps. “Do your research and get to know your competition. Fairs are an opportunity to meet competitors. This will allow you to compare different franchises,” he says.
Conscious decision
Bonvechio warns against decisions driven by impulse. “Don’t be fooled by special offers and other discounts offered during the fair: carefully analyze all financial and legal aspects. There is a period of 10 days between receiving the Franchise Offer Circular (COF) and signing the contract or paying any amount. Analyze everything calmly; obey the deadline”, he says.
Before closing a deal, do an in-depth analysis of the sector in which you intend to invest. “Analyze the data of the market in which the franchise operates. Consider demand, competition, industry trends and business viability in your region. Also research the brand, checking the support offered, fees and royalties and contractual obligations”, he comments.
Long-term commitment
Before closing a deal, seek guidance from experts, such as financial advisors and specialized lawyers. “They can help you understand the legal and financial aspects involved, ensuring you make a safer decision. This helps you to be sure that the chosen franchise is in line with your expectations”, he says.
The most important thing, says Bonvechio, is to be prepared for the commitment. “Being a franchisee requires dedication, hard work and long-term commitment. You need to be willing and able to take on the challenges and responsibilities that come with franchising, so no decision should be made in haste. For most people, this is the investment of years of savings. Hasty decisions can ruin everything”, he adds.