Chat about franchising

‍

On March 25, 2023, João Caetano, founder of Mapfry and responsible for operations, participated in a live with franchise expert Diego Morais.

‍

‍

‍

Here are some topics that have been covered

‍

How did you get started in Geomarketing?

‍

I started in 2007 when I was still at Brmalls, now Allos, during the boom in the shopping mall sector, when hundreds of projects were under study.

‍

It was an excellent opportunity to realize the value of Geomarketing, so I decided that this could be a career path and migrated to the other side of the table.

‍

At that time, my greatest desire was to act as a consultant, but I ended up starting with the commercial area, which gave me a very clear view of the pain, of the real reasons that lead to a study.

‍

And what are those reasons?

‍

In general, they involve entering a new, lesser-known market, where decision makers want to have more context.

‍

There are also external motivations, such as investors or shares in the stock market, which demand logic for investments in new stores.

‍

Another reason is to understand the factors that lead to good performance.

‍

It happens a lot because networks only look inward at service and product indicators.

‍

When a store's performance is surprising, down or up, questions arise that we can answer.

‍

If the chain has other stores very close by, it will be suspicious of the overlap in the same area of influence, an effect also called cannibalization.

‍

But it's not always a problem to have one store close to the other, just as the competitor doesn't have to be seen as something negative either.

‍

In the United States, this market reading is called co-tenancy, who are its neighbors.

‍

Here in Brazil I have seen the term “synergistic operations” being used to describe the set of competitors or not that complement your offer and contribute to good performance.

‍

As the franchise market is very granular in Brazil, with an almost 1:1 ratio of stores per franchisee, it was agreed that there should be a safe distance between stores to avoid overlapping areas of influence.

‍

This was a way to minimize conflicts within the network, but another consequence of this is that the networks expand leaving market voids.

‍

This is not the case with own networks, which can analyze the performance of costs and sales over a region with several overlapping areas of influence.

‍

For those who want to start now or review the current process, I recommend starting with the following question:

‍

How much do you know about the impact of your operation on a region?

‍

Something like, when are you able to bill or profit according to the volume and profile of residents in a place?

‍

Some measure the units sold, others the shopping basket, the average ticket, but few enter the vision of market share, that is, what is the capture of the available market.

‍

What does a brand need to start doing analyses of this type?

‍

Having well-organized internal information adds to the power of analysis, but it's possible to start small.

‍

New networks, some still without a single store, at that concept stage, can carry out benchmarking studies in known successful operations, where we will reverse engineer the success factors.

‍

We are seeing a new wave of networks gaining strength, these leaders of the future were able to conceptualize a winning offer without previous information bases, because they were able to read the demand.

‍

Another thing that is far from the most common analyses is the relationship between expansion and operation, in the jargon of the CAPEX and OPEX sectors.

‍

Sometimes it looks like that scene from the movie Elite Troop where the cops transfer occurrences to another battalion's area.

‍

However, the company always pays the bill when expansion doesn't consider the operating cost of its choices.

‍

Logic and logistics must go together.

‍

And how much does it cost, is Geomarketing becoming more accessible and democratic?

‍

Regarding the cost of these studies, they can start with a few thousand reais and reach hundreds of thousands.

‍

The fastest and cheapest part is the one carried out in software such as the Mapfry platform, but systems alone cannot replace the eyes of those who are in the field.

‍

So the total bill is higher than just a subscription to a system.

‍

In any cost scenario, the investment is worth a lot, because a poorly performing store sucks resources from 4 to 5 good stores.

‍

If it is the only store owned by a franchisee, a crisis situation is created in the network.

‍

I leave the question, how many% of the investment that will be made when opening a new store could be invested in previous studies?

‍

Those who thought of something between 1 and 5% are already very well off, but it's not uncommon for large networks to invest even larger proportions.

‍

The big change is that more accessible consulting formats and platforms are emerging, allowing entrepreneurs of all sizes to discover the value of these analyses.

‍

‍