Note: Editor Trevor Williams is accompanying Mayor Kasim Reed’s trade mission to Brazil, blogging as he goes.
One of Atlanta‘s strengths is its diversifed economy, but new Metro Atlanta Chamber President and CEO Hala Moddelmog hopes to bring one strategic sector more to the forefront.
Traveling in Brazil this week with Mayor Kasim Reed‘s delegation, Ms. Moddelmog had the chance to sing Atlanta’s praises as a franchising hub.
For the former president of Atlanta-based Church’s Chicken and CEO of Arby‘s, it’s not news that the city boasts such a broad array of headquarters for some of the world’s best-known franchises.
But she said it’s an industry that has largely developed organically and hasn’t received enough high-level cheerleading. She hopes to change that, and creating a presentation for the Brazilian Franchising Association (ABF) gave her the impetus for putting together a convincing portrait of that activity.
Walk around São Paulo and Rio de Janeiro, and you’ll see some of the big American brands: Starbucks, McDonald’s, Burger King, Pizza Hut and Outback Steakhouse, intermingled with local brands like Bob’s Burgers and Bibi sucos (fruit juice shakes) shops.
But KFC is far from displaying its seeming ubiquity in other emerging markets like China, suggesting that bringing an outside brand into Brazil is not all that easy.
At the presentation, Ms. Moddelmog heard that getting a business license in Brazil requires significant upfront investment.
Franchisees also have to tie up a lot of cash, starting with something like an 80 percent ownership stake in their branch. Then there are the tax complexities and labor issues that the Atlanta delegation has been hearing about all week.
For Ms. Moddelmog, that was the perfect segue to selling the U.S. to brands that may be looking for global opportunities.
“I just basically pitched how much easier it would be than Brazil and how much we would help them,” she said.
Ms. Moddelmog encouraged the Brazilian brands to think beyond the saturated quick-service restaurant category, which is tough for foreign entrants, and consider ways to ride the growth wave in franchised services.
She pointed to Roark Capital, the Atlanta-based fund that holds 29 franchise brands, including Batteries Plus and Massage Envy. Atlanta’s also home to InterContinental Hotels Group’s North American headquarters.
Brazil could cash in on its cachet in areas like beauty, she said, noting that Atlanta has a big chunk of the African-American hair products market and hosts the biggest annual show in the industry.
Top representatives in the ABF, who attend the International Franchise Association’s meeting each year, said they would bring 40-50 Brazilians to Atlanta next February when they come for the show.
Perhaps they were swayed in part by metro chamber vice president for global commerce, Jorge Fernandez, who preceded Ms. Moddelmog’s presentation with a “Why Atlanta?” speech, conducted all in Portuguese.
The franchise session, along with a few other events, was arranged by the Atlanta-based Brazilian-American Chamber of Commerce Southeast.
See the Metro Atlanta Chamber‘s blog post on the franchising seminar here.