The impact of COVID-19 on franchising in emerging markets: An example from Brazil

Abstract

The outbreak of COVID-19, the disease caused by the SARS-CoV-2 virus, has had significant economic, political, and social consequences worldwide. The franchising sector, consisting mostly of retail and service businesses, is an example of an industry that has been deeply affected. The experiences of franchising stakeholders in Brazil highlight the strengths of the franchising model in such situations. This investigation, based on primary data from webinars with food service, education, retail, and business-to-business service companies in Brazil, coupled with reports from commercial and franchising entities, reveals how the COVID-19 outbreak has affected the franchising sector. It illustrates the measures that were taken, the negotiations that take place between suppliers and landlords, the adaptation of business models, the effects on franchisor-franchisee relationships, and the impact the pandemic has had on relationships with customers. The strategies adopted by Brazilian franchisors and franchisees suggest lessons for other franchising companies in similar situations, such as those in developing and emerging economies.