"The Franchise in Spain 2023" Report Shows Post-Pandemic Resilience
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"The Franchise in Spain 2023" Report Shows Post-Pandemic Resilience

The Statistical Studies Service of the Spanish AEF (Asociación Española de Franquiciadores) has prepared, as it has done since 2002, its annual report, “The Franchise in Spain 2023,” with data closed as of December 31, 2022.

The report’s main conclusion is that the franchise system has coped with the crisis caused by the Covid-19 pandemic. The data shows that the turnover (revenue) figure grew by 2.9%, from €26,154 million at the end of 2019 to €26,929 million at year-end 2022.

The report also showed that franchising continues to be a business model that generates employment. In 2022 franchising in Spain provided jobs for 303,595 people, compared with 294,231 employed in 2019, an increase of 3.18%.

The number of networks that make up the country’s franchise system fell slightly, from 1,381 at the end of 2019 to 1,375 at year-end 2022, a decline of 0.5%. The number of open establishments also fell slightly (0.7%), from 77,819 operational premises at the end of 2019 to 77,426 at the end of 2022.

Number of networks by country

Of Spain’s 1,375 franchise networks, 1,137 (82.6% ) are of national origin. The remaining 238 brands (17.4%) come from a total of 24 countries, especially France (51), the U.S. (46), Italy (43), and the U.K and Portugal (16).

The sector with the largest number of brands is Hotels/Restaurants, with a total of 224 networks integrated into six activity subsectors, followed by Fashion, with 213 chains with eight subsectors, and Beauty/Aesthetics, with 107 networks.

Billing

At the end of 2022, the turnover obtained by the country’s franchise system as a whole was €26,929 million, compared with the €26,154.3 million invoiced in 2019, a growth of 2.9%. Of this global figure, owned establishments billed a total of €10,342.2 million, 104% more than the €9,269.8 million billed in 2019. Franchised premises invoiced €16,586.7 million, down 1.7% from the €16,884.4 million invoiced in 2019.

As usual in recent years—and more so because they did not close their establishments during the pandemic—the sector with the highest turnover was Food, with a total of €8,900.7 million. This was followed by Hospitality/Fast Food, with a turnover of €3,081.4 million, Hospitality/Restaurants/Hotels with €2,380.6 million, and Services/Transport, whose billing was €1,636.4 million in 2022.

Operating establishments

The end of 2022 saw a total of 77,246 stores operating in Spain, 20,999 owned and the remaining 56,247 franchised. In total, 2022 saw 573 fewer establishments than at the end of 2019, when there were 77,819 open points of sale, a decrease of 0.7%.

Once again, the sector with the greatest number of open establishments was Food, with a total of 13,473. This was followed by Hospitality/Fast Food with 4,636 stores, Beauty/Aesthetics with 4,349 points of sale, and Travel Agencies with 4,097 stores.

Employment created

One of the most significant aspects of franchising in Spain is that, despite the difficult situation experienced in the past 3 years, it continues to generate employment. At the end of 2022, this business model provided jobs for 303,595 people, 9,364 more than in 2019 (+3.18%). Of this number, 104,629 worked in their own premises (10,122 more than in 2019), and the remaining 198,966 in franchised establishments (758 fewer than at the end of 2019).

Looking at employment by sector, those that generated the greatest number of jobs were Food (72,912), Hospitality/Fast Food (43,258) Hospitality/Restaurants/Hotels (22,368), Beauty/Aesthetics (13,555), and Services/Transport (13,210).

Autonomous communities

Finally, of the 1,375 networks that currently compose the franchise system in Spain, the autonomous community with the largest number of central franchisors continues to be Madrid with 401 (up 34 from 2019). Next is Catalonia with 318 (down 17 from 2019), Valencia with 176 (down one from 2019); Andalusia with 157 (down 4 from 2019), and Galicia with 48 (down 2 from 2019). These five communities account for 80% of the total number of brands that make up this business model in Spain.

It should be noted that the Community of Madrid is also the one in which the power plants established there bill the most, with a total of €12,802.1 million, with Catalonia next at €6,978.8 million. Likewise, the power stations in the Community of Madrid generate the most jobs (136,582) and stores (29,007). Next was Catalonia, whose power stations employ 80,316 and total 22,480 operating establishments.

When assessing the data in this report, AEF President Luisa Masuet said, “The franchise system has shown great strength to overcome the adverse circumstances we have been experiencing since 2020. Brands have experienced growth of 2.9% in billing, exceeding the figure billed pre-pandemic, while also managing to generate employment. This business model shows once again that it is a mature and dynamic system, capable of facing times of crisis.”

AEF Executive Director Eduardo Abadía noted that, “The data at the end of the 2022 financial year are positive for the franchise system, with separate growth in turnover and job creation and insignificant decreases in the number of networks and establishments. Without a doubt, the franchise has been able to adapt to the new reality of the market, thanks to work, effort, and its capacity for innovation.”

Andrea Lazzari is CEO of the 06 Group. Based in Madrid, he is recognized as an expert in franchising and tourism in Spain. His three decades of knowledge and experience with national and international companies and brands include positions in management, development, expansion, and marketing in several sectors of the economy. To learn more about franchising in Spain, contact him at +34 658771226 or andrea@06group.es.

Published: March 28th, 2023

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