The Five Advantages of Investing in a Technology Franchise

The technology market is booming and continues to grow. To give you an idea, the number of tech company openings in Brazil rose more than 200% from 2011 to 2020, according to data from Datahub.

No wonder Brazilians are looking forward to this chip. A study conducted by the Brazilian Association of Software Companies (ABES), in 2020, showed that Brazil ranks ninth in the global IT rankings, being a leader in Latin America. In total, the state achieved a growth of 22.9%, investing about 200 billion R$.

The consequences of the pandemic have also accelerated digital transformation. Companies that do not yet realize the importance of technology to their business have had to adapt to get back on their feet. Therefore, many of them have started using cloud management software and online sales.

“It is indisputable that the epidemic forced an acceleration of digital transformation. The ABES study clearly demonstrates a significant increase in the use of technological solutions in 2020, which primarily affected the software market, which has grown by more than 29% in this period,” explained Rodolfo Foucher, President ABES.

In the franchise sector, the performance was no different, revenue exceeded R$185 billion in 2021, an increase of 10.7% over the previous year, according to the Brazilian Franchise Association (ABF). The good performance, even in the midst of a pandemic, is mainly due to the ability of franchise chains to undergo adaptation, making their operations more digital.

“There was a time when software was only available for large conglomerates, due to the high cost of the platforms. But with the advancement of technology, solutions become available and now a small family business can have a management tool on hand. Sales for a low monthly fee, which will help you generate reports commissions, accurate inventory checking, recording and control, modules to monitor the financial health of the business, a dashboard that allows you to manage orders, sales, register products and customers, among many other solutions”, explained specialist Ricardo Sanchez, product manager at Lukro, a franchise that develops intelligent software .

For those who want to enter this sector, one of the safest ways to invest is through franchising, since franchise networks already have a market-tested and approved business model.

Among the advantages of this model:

1. Working with a unified brand in the market

One of the main factors that causes the customer to close the purchase is knowing the reputation of the company. If the company has been in the market for years and is a reference in this sector, then the chances of conquering the target audience are much greater than the company that started from scratch and is still under development.

2. Turnkey and Operational Business Model

Another advantage of the entrepreneur is that the franchise has the complete business model ready, from market research, product definition, and marketing methods, among others. This means that the franchisor will not waste time or need to invest in this step, because the entire process has already been done and tested by the franchisor for years, right up to the perfect formula.

In the case of a technology franchise, this step is even more important because it takes months and a lot of investment to develop platforms that can be used without problems by the end customer.

3. Reduced structure and low investment

Many brands offer smaller franchise modalities, which do not require a structural investment or purchase of products, and often allow working from home, using only a laptop and mobile phone. Thus, even people who want to do their business, but have a reduced capital, can start their own network business.

4. Low risk of failure

According to Sebra, the mortality rate for companies up to two years in operation is 23%. While in franchising, the same indicator is 3%. This happens because the franchisor goes through the most difficult part of entrepreneurship, which is the development and consolidation of the business.

Since all operations are already standardized by the time the franchisor becomes a partner, the chances of failure are very low.

5. Training and support

Franchisees undergo training prior to carrying out their business and receive ongoing support throughout their journey within the franchise network. This is an important part for both the chain, who wants to maintain the brand’s position and reputation, and for the franchisor, who feels safe and ready to run their unit.

“By joining the franchise network, the franchisee becomes a representative of the brand. In this way, he has access to all the knowledge and solutions for the business, which often take years to build. Which can make it take off and generate significant income”, concluded Ricardo Sanchez, From Lukro Franchise.


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