Portugal enjoys a boom in franchising

In 2022 Portugal’s franchising sector represented 7.23% of Portugal’s GDP – a considerable increase on the pre-pandemic year of 2019, revealing its growing importance for the Portuguese economy and proof of its vital role in creating wealth for the country.

In fact, the latest figures from the Portuguese Franchising Association (APF – Associação Portuguesa de Franchising) reveal a remarkable growth in 2022 for the sector in Portugal in comparison to 2019, marking a bounce-back after the period of uncertainty during the pandemic.

Cristina Matos, Managing Director of the APF says that the figures show positive growth results for a sector that has proved to be resilient and expanding, making a significant contribution towards the Portuguese economy.

When we interviewed Cristina Matos she and her team were making the final arrangements for Norte Franchising 2023 – the largest event for the franchising sector in Portugal that was taking place at the Port of Leixões near Porto on September 28 after a two year hiatus because of the Covid-19 pandemic.

“We realised that we needed to make some adaptions to the fair’s programme because of the latest trends in the sector in order to communicate to the franchisors but also the franchisees, and those interested in exploring franchising opportunities in the sector”, explains Cristina Matos.

Cristina points out that Norte Franchising is not a trade fair like the one they annually hold in Lisbon, but rather a mixture between a conference and event, which provides networking opportunities, provides training sessions about the franchising business, make allows potential and current franchisees to connect with the brands, and helps delegates and visitors to understand the national market.

Later in the autumn, usually in November the APF will hold the 29th edition of the CEO Franchising Conference in Lisbon – a symposium whose goal is to bring franchisors, franchise masters and franchise CEOs and directors together under one roof to learn and discuss the latest trends in the market, share experiences, and foster networking opportunities between delegates.

“We invite both national and international speakers to share their experiences of franchising, and debate the themes that influence the sector at a national and international level. In recent years we’ve had the opportunity to organise the event in partnership with the Brazilian Franchise Association (ABF – Associação Brasileira de Franchising) which has really enriched our knowledge sharing and networking activities”, explains Cristina.

Then in April/May each year the APF organises Expofranchise which last year saw its 26th edition in May with almost 50 brands present.

The aim of this fair is to bring together various brands and sector investors together so that entrepreneurs who are interested in investing in the sector in Portugal can evaluate the potential of each brand, test the temperature of the conditions of the market and, of course, keep up with the latest sector trends.

Last year saw a number of new brands at the event — around 12 – that joined big brand names such as The Coffee, Dr. Finanças, SchoolOfRock, Fireaway Pizza, Vangor, Onodera, Kiabi, and Metalpro.

A growing sector

Certainly the sector has grown considerably in Portugal in recent years. “In 2019 the volume of business in the sector saw a turnover of over €12,000 million, but in 2022 this figure jumped by a remarkable 39.7% on 2019 to €17,000 million showing a robust recovery and sustained growth for the franchising sector,” says Cristina Matos.

The franchising sector also has an important role in job creation in Portugal. In 2022 it created 176,954 jobs, an increase on 2019 from 3.34% to 3.60% of all employment.

“This increase, despite the challenges of finding manpower (Portugal has a relatively low unemployment rate of just over 6%), reflects the sector’s continuous commitment to generate jobs and boost the economy”, says Cristina.

However, despite human resources issues, Cristina Matos says that the introduction of new technologies and methods of efficient working have played a crucial role in mitigating the lack of manpower, making the sector even more adaptable and resilient.

“Today there are more ways that people who might be interested in franchising can seek out the brands. Internet is growing considerably in this respect and a lot of people who could not physically be at our events can network with the brands online”, says the APF, MD.

Cristina admits that there is still room to grow in terms of events attendance and the APF has not yet achieved the kind of numbers it had before the pandemic, but there has been growth from last year to this in terms of delegates and attendees.

“The personal contact is sill very important. Potential franchisees are investing in something that is quite expensive, after all they are buying a business; it’s a life changing, long-term commitment that has to align with the franchisees’s life,” she points out, and adds: This is not something you go into because it is fashionable; you do this to add value for you, your family, and for your own business, as well as the brand”.

“Franchising in Portugal continues to grow and evolve, providing significant opportunities for entrepreneurs and investors. With a stable economy, government support and greater diversification of sectors, franchising is a solid and promising choice for those who seek to start their own businesses in Portugal”, concludes the Managing Director of the APF, Cristina Matos.