Franchising in Spain

Q&A with Eduardo Abadía, GM of the Spanish Franchise Association

The key to successful franchising in Spain is to "localize the product to the taste of the Spaniards," says Eduardo Abadía, general manager of the Spanish Franchise Association.

Abadía says the Spanish franchising marketplace today is characterized as a mature market that is very receptive to new concepts from abroad, especially brands from the USA. However, he advises, when a well-established franchise brand comes to Spain there are some guidelines he recommends they follow. Learn more in the following Q&A.

What is the current state of franchising in Spain?
Franchising in our country is experiencing one of its best times, as shown by the fact that it is growing for the 4th consecutive year in all the variables analyzed: sectors, number of stores, turnover, and employment. Today we have a more mature system, better prepared and more involved in issues like social media and globalization. Also, we presented a pioneering report last year that shows franchising is a business system with a very low litigation rate of only 0.08% between 2014 and 2016. This reinforces the confidence and security for both franchisors and franchisees.

Is this a good time for brands from abroad to open in Spain?
As our report "Franchise in Spain 2018" shows, there are 232 foreign brands working in our country in various sectors, including hospitality/restaurants, car services, gyms, and real estate agencies. In recent years we have observed a greater number of brands from foreign markets because they are now aware that Spain is a mature market for franchising, and because is also the entrance door to the rest of Europe.

What is the best expansion strategy for US brands to begin franchising in Spain?
Without a doubt, the best formula is the master franchise. Find a local partner in Spain who has the resources to expand the brand throughout the country. The distance from the USA also makes it advisable to use a master franchise approach, always with the support of the main franchisor, to guarantee success.

What advice would you give to US brands planning to open in Spain?
The most important point is to localize products and services and adapt to Spanish culture and tastes. Not everything that works in the USA will necessarily work in Spain in the same way. You may need to make adjustments or vary the offer to find success and be accepted in the Spanish market. This is why it helps to have a local partner who knows and understands the Spanish market, and who guides the brand in the adaptations it must make to prevent mistakes.

Finally, do you think brands coming to Spain from the USA and Spanish brands going to the USA will maintain the growth trend?
In the coming years, the trend of US brands coming to Spain will be higher, as demonstrated by the increase of US franchisors coming to Spanish franchising events looking for master franchisees. This interest shows that our market is mature and open to franchises from other countries. As for Spanish brands going to the USA, our "Spanish Franchise in the World 2018" report determined that there already are 40 Spanish brands in the US market, with 641 establishments. That makes the USA the 10th-largest market for Spanish franchise brands, and shows the maturity and preparation of Spanish brands to compete in the world's number-one franchising country.