At Marketcraft, we've built our path by working directly with the expansion of brands and retail businesses. Recently, we attended the ABF Franchising Expo — one of Brazil’s main franchising showcases — and came back with important reflections on the current direction of the market.
The event featured a wide variety of brands and solutions, with a spotlight on innovations in automation, self-service, and payment systems. However, when we took a closer look at the apparel and footwear sector, especially in terms of franchise viability, we found a highly standardized scenario:
- Average monthly revenue: R$150,000 to R$200,000
- Initial investment: around R$400,000
- Store size: 40 to 50 sqm
- Estimated net margin: 10% to 12%
- Payback period: 24 months
These figures raise a key question: is it worth the investment?
With Brazil's base interest rate (Selic) nearing 15%, it’s natural for more conservative investors to question the attractiveness of business models that demand capital, energy, infrastructure, and high execution capacity — only to deliver narrow margins.
➡️ For newcomers, the risk may not justify the return.
➡️ For experienced operators with mature processes, shared infrastructure, and scale to dilute fixed costs, the model can be promising. A 12% margin can grow into something much more profitable.
From the brand's perspective, franchise expansion offers undeniable advantages:
- Accelerated growth with lower direct capital investment
- Strategic and standardized distribution
- Curated assortments with better margins and average prices
- Greater market reach and proximity to the end consumer
- Stronger brand presence in key markets, reinforcing brand equity
Still, if the model is so advantageous for brands, why are many potential operators hesitant?
It may be that one essential element is missing: a truly win-win model. Perhaps it’s time to rethink how brands can offer early-stage support — particularly during the most challenging initial years of operation. Well-structured support can shorten the ramp-up curve and accelerate results, bringing mutual returns in the medium term.
Moreover, expansion should never be planned in isolation by channel. It must be integrated with market capacity studies and the brand’s full distribution ecosystem. The consumer is the same — what changes is how they engage with each channel.
That’s why it’s essential that all channels work together in a well-aligned omnichannel strategy:
Digital • Multibrand Retail • Flagship Stores • Franchises • Outlets
Each channel plays a strategic role. Together, they form a solid, scalable, and sustainable brand architecture.
If your brand is evaluating its next growth steps — or if you want to build a replicable and profitable business model — let’s talk.
At Marketcraft, we specialize in connecting strategy, operations, and execution with a growth mindset.
Let’s build the next chapter of your brand — together.
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