By Chris Graeme
Posted 21 Outubro, 2024
In Companies, Events, Franchising, News
Franchising continues to grow in Portugal and consolidate its position as one of the essential drivers of the national economy. Essential Business went along to Expofranchise to discover more about this dynamic sector in Portugal.
Text and Photos: Chris Graeme
In 2023, Portugal’s burgeoning franchising sector accounted for 8.3% of Portugal’s Gross Domestic Product (GDP), a number significantly above the previous year when it was 7.23%.
Sectors such as services and retail stood out as crucial to increasing that increase. On October 18 and 19, some of the main companies in the sector gathered at the Pátio da Galé exhibition and events venue in Lisbon for the 27th edition of Expofranchise, the largest fair of its kind on the Iberian Peninsula.
“We’ve grown from 7.23% of GDP in Portugal in franchising to 8.3% so it is quite amazing how the business has grown in just 1 year,” says Cristina Matos, the President of the Portuguese Franchising Association. (APF – Associação Portuguesa de Franchising)
“We have a lot of new brands, and after the pedantic period in which the franchise business, like most others, really struggled, we’ve scaled up with a lot of people wanting to invest in the sector and it has really grown,” Cristina explains.
Cristina says that franchising is “taking off in Portugal” because the country’s economy is growing, particularly services in tourism.
“If the economy is growing then we grow too,” she says, adding that immigration too has boosted offers, as well as the number of entrepreneurs trying to buy new brands overseas and bring them to Portugal.
“We’ve also got examples of brands that were developed in Portugal that then decided to opt for a franchising model. We had a lot of Brazilian entrepreneurs that came here just before the pandemic, start up their own businesses, and decided to grow them through franchising,” Cristina explains.
A growth in financial services
One of the areas of franchising that has grown in recent years is financial services brokerage, with one company standing out in particular for having an unmistakable and rather novel look. The Doutor Finanças team were immediately recognisable for their white coats that initially give the impression of a private healthcare services company.
However, it’s not, and the only remedies they’ll be dishing out are the result of another quite different diagnosis – financial consulting, with a particular emphasis on mortgage and insurance brokerage, and supporting micro and small companies to improve their business models.
Francisco Tavares, Director of the Doutor Finanças network explains: “We’re healing a problem. You go to the doctor with an ailment, and you place your trust in the man in the white coat. Here we’re the doctors for financial matters that can help diagnose and find remedies for a broad range of issues,” he told Essential Business at Expofranchise.
Although the company can help in a wide range of areas such as getting the best mortgage deal, loan consolidation, finding the right insurance cover and finding the best interest rates on personal loans, he explains that the mortgage aspect of the company’s services is the strongest.
“Most people when they seek a mortgage, go to their bank and talk to someone there. But you don’t know if your bank is giving you the best deal in the market”, he says.
“So we are mortgage brokers, we talk with all the banks and we find the best deal to suit our client and deal with the whole process from start to finish, including all the paperwork, and get them the best insurance deal on the loan in the market,” he continues.
“It’s a win-win situation” he stresses, using the Portuguese phrase ‘negócio Chinês (A Chinese deal).
Now in its 10th year, the totally Portuguese company also offers a ‘financial literacy’ service.
“We saw there was a gap in digital financial literacy in Portugal – which is well known – as there were no blogs or websites giving advice.
“We set up a Doutor Finances YouTube channel and we also contribute to a TV programme called Contas Poupança (Savings Accounts) on SIC TV. We went from 1,000 leads per month to an astounding 15,000 leads,” Francisco continues. Now the Doutor Finanças website currently has 2 million visitors per month.
The company currently employs 2,015 directly and another 250 working within the franchise network, and has an ambition to open a physical store in every town in Portugal.
“Now we have 32 stores up and down the country, particularly in the north of Portugal, including stores in the Azores. Our goal is to have 1,050 stores by the end of next year,” he explains.
So how does one go about being a franchisee for Doutor Finanças? Francisco Tavares explains: “We have several models and are distinguished by the amount of credit that the franchisee is permitted negotiate with clients.”
In the basic model, the franchisee pays a €1,500 fee and 30% of royalties per year. In another the franchisee pays 20% royalties and a €7,500 fee every five years. With the third model, the franchisee pays 8% royalties and €12,500 in fees. “People make a good living out of this because they receive 1.5% on all the loans achieved”, concludes Francisco Tavares.
To read the full article go to: https://www.essential-business.pt/2024/10/21/why-franchising-is-growing-in-portugal/