The Franchise Law Review – Chapter Brazil

The Brazilian franchising market is growing at a rate of 16.2 per cent annually and currently comprises approximately 2,426 franchise networks, generates around 940,887 direct jobs and annual revenues of US$51.134 billion and has achieved an advanced level of maturity and reliability on a global scale. Brazilian native brands represent around 93 per cent of the networks in operation.

The maturity of franchising in the country, along with the strengthening of Brazil’s social, political and economic environment, has resulted in strong interest from foreign brands in the internal market and also incentivised local brands towards the expansion into international markets.

Currently 168 international franchise networks operate in Brazil. This still represents only 7 per cent of the operating franchises in Brazil, although there is a growing interest in the Brazilian market, bearing a strong domestic demand of more than 190 million people, augmenting the volume of prospecting companies.

Additionally, there are currently 112 Brazilian franchised trademarks operating in 53 foreign countries. This number represents a 140 per cent increase during the last five years. The Brazilian Franchise Association (ABF) estimates that 120 new trademarks will have started their operations abroad by the end of 2013.

A special partnership between ABF and the Export and Investments Promotion Agency (APEX-Brasil), a government agency of the Development Ministry, was established to promote and stimulate the export of Brazilian franchises. Jointly with the initiative of entrepreneurs, cooperation of law firms and other collaborators, this partnership has contributed to the expansion of the Brazilian franchises overseas.

Founded in 1987, ABF is a non-profit entity that has as its objective the contribution to, promotion of and striving for technical and institutional development of the franchise system. With its national headquarters located in São Paulo and with a branch in Rio de Janeiro, ABF has been establishing itself as the most representative entity for the sector at the federal government, other administrative spheres, official national and international entities. It also has more than 1,000 members including franchisers, franchisees, consultants and sector service providers. The entity participates in the Ministry of Development, Industry and Foreign Trade’s (MDIC) Project for the Elaboration of the Economic Development Plan.

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