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BUSINESS

Buying a franchise in Spain: the cheapest and best businesses to set up

Investing in an already recognised brand can be a good way for foreigners to guarantee a good living in Spain or get a business visa approved. Here are several Spanish franchises you can buy for under €20,000 and the trends you need to be aware of.

Dia supermarkets in Spain
Dia supermarket is one of the best franchises to invest in, in Spain. Photo: Marina Zárate GR / WikiCommons

Have you ever thought of buying and running a franchise in Spain? Of course, when setting up a business there are always risks involved, but setting up a recognised brand could be a good way to make money in Spain. 

How to choose the right franchise?

There are currently more than 1,300 franchises in Spain, which makes choosing the right one and mammoth task.

Picking the right franchise for you and for the current situation can be tricky. You can’t only look at price and rental costs, but you also have to look at the profitability, the economic climate and what is happening in the country.

According to the business and political website Moncloa, you must also try to do as much research as possible and find out everything you can about the company. Know how much money you are going to spend and work out what the return that the business will provide you during the first few years.

READ ALSO: Why you’ll soon be able to set up a company in Spain with just €1 rather than €3,000

Moncloa suggests that the hospitality and fitness sectors are safe bets at the moment. After almost two years of not being able to do everything they want, people want to have fun and take care of themselves. The site also says that you should choose those franchises that are committed to innovation and technology and an experience that is different from its rivals. 

This means choosing franchises that offer the latest in technology, customisation and those that use extra innovative things such as apps.

According to the Spanish Association of Franchises (AEF), franchises in the sectors of supermarkets, restaurants and fast food, hotels and transport services made the most money in Spain in 2020.

InfoFranchises.com, a Spanish website all about setting up a franchise in Spain says the top most profitable franchises in Spain in 2022 will be:

  1. Eroski – with a profitability of 5 percent
  2. General Óptica – which could earn you €150.000 next year.
  3. Caprabo – With a profitability of 5 percent.
  4. Tous –  Between 5 and 10 percent
  5. Cepsa – Between 5 and 10 percent.
  6. Pans&Co – Between 15 and 20 percent.
  7. Sol Meliá – Between 15 and 20 percent.
  8. Movistar – 10 percent 
  9. Vodafone – 10 percent
  10. Orange  – 10 percent
  11. The Good Burger – Between 10 and 20 percent
  12. 100 Montaditos – Between 10 and 20 percent
  13. Real Madrid Store – Between 5 and 10 percent
  14. Futbol Club Barcelona Store – Between 5 and 10 percent

While these are the most profitable, they are not necessarily the cheapest franchises to set up and some of them could cost you back hundreds of thousands of Euros. 

According to reports from the AEF, TopFranchises.es and InfoFranchises.com the following franchises are not only profitable but are also some of the cheapest franchises to invest in, setting you back between €10,000 and €20,000. 

READ ALSO: Spain to give €3 billion in digital bonuses to one million SMEs and self-employed

Día

According to AEF, Dia supermarkets are the biggest growing franchise in Spain and the company plans to open 400 new franchises before 2023.

In order to set up a Dia supermarket, you will need an entry fee of €300, a guarantee of €12,000 and 50 percent of the value of the initial stock. In addition, you must contribute royalties of two percent on sales and expenses of three percent on sales.  

La Botica de los Perfumes

One of the leading companies in Spain selling bulk perfumes, it offers high quality and competitive prices. It is another of the cheapest franchises to set up in Spain, since you can open a store with an initial investment of €14,900. 

General Óptica

Setting up a General Óptica franchise is a great option for those who already have a business similar to an optician as you can easily convert it and pay just €12,000. However, if you don’t, setting up a new franchise will set you back €110,000. The company offers a marketing plan that ensures the profitability of the franchise and it is also a well-trusted brand. 

La Ventana Natural

A natural food and cosmetic store, La Ventana Natural started its franchise business in 2002 and now there are 160 franchises across the country. In order to start a business, you need at least 45m2 of space, an entry fee of €4,000 and an investment of €16,000, bringing your total to a round €20,000. It could be a good way to get your foot in the door of the health sector. 

B the Travel Brand 

While setting up a travel franchise, may not seem like such a good idea in the current climate, hotels and hospitality were some of the most profitable businesses in 2020, so it shows that people were still travelling. B the travel Brand is a travel agency owned by the Barceló Group and is a leader in the tourism sector, with more than 80 years of experience. It is a cheap franchise, starting at just €9,000 for investment. However, you also need to pay a €6,000 entry fee. Royalties are between 1.5 and two percent of the sale. In order to set one up, you must have experience in the travel sector.

Hola Mobi

While the most profitable telecommunications companies such as Orange, Vodafone and Movistar, may be out of your budget, Hola Mobi may not be. In terms of multi-operator and multi-service store model, is one of the best in which to invest due to the great demand. If you are passionate about technology and know what’s what, then according to Spanish franchise website TopFranchises, you could invest in Hola Mobi for 18,495. 

La Croquetería Gourmet
This foodie franchise offers great potential for entrepreneurs interested in the fast food business. The business aims to become the leading national brand of specialised in the sale of quality croquettes. According to Top Franchises, it is an inexpensive franchise and you don’t have to pay any royalties. The initial investment costs €20,000. 

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MONEY

Rising inflation in Spain: Six cost-cutting ways to fight it

With everything from food to electricity becoming more expensive, people in Spain will spend on average €1,100 more on daily costs in 2022 than the previous year. Here are some top tips for tightening your belt as inflation bites.

Rising inflation in Spain: Six cost-cutting ways to fight it

Rising inflation is a problem affecting economies the world over. Economists and politicians are proposing ways to slow inflation, to cut taxes, and to soften the impact on consumers.

In Spain, things are no different.

In late July, Spain’s National Statistics Institute (INE) reported that the Consumer Price Index (CPI) – the index used to measure inflation – rose by 10.8 percent in July, up from 10.2 percent in June and the fastest rate since September 1984, a 38 year high.

READ ALSO: Spain’s July inflation rate reaches new 38-year high

The prices of anything and everything from fruit and eggs to olive oil and petrol have jumped up, and the increases have been particularly pronounced in fuel and utility costs due to the double-pronged pressures of inflation combined with global fuel prices rising as a byproduct of Russia’s invasion of Ukraine.

Electricity costs have been reaching historic highs over the past year, with prices on Wednesday, July 20th, 124 percent higher than the same time in 2021, according to recent data from OMIE, operator of the Iberian energy market.

According to a survey by Sigma Dos, 43 percent of Spaniards have been forced to cancel, shorten, or change their holiday plans for the months of July and August.

And then, on top of all that, the European Central Bank (ECB) announced last week that it is raising interest rates at the end of July, in order to try and slow inflation, which will have a direct impact on consumers paying back loans and mortgages.

READ ALSO: How will rising interest rates affect my life in Spain?

According to the Family Budget Survey (EPF) conducted by the INE, the average Spanish family’s spending on food has increased by €620 year-on-year.

All in all, the perfect storm of pressures of family budgets has hit hard in Spain.

That in mind, The Local has put together a list of tips to help you fight inflation and save some money in Spain this summer.

1. Natural light

Spain is well known as one of the sunniest countries on the planet. Not only does its roughly 15 hours of light a day make it hot during the summer, but it also means there’s an abundance of natural light.

With electricity bills through the roof, an easy way to save on energy is to keep the lights off during the day and take advantage of the light by keeping curtains and blinds open.

It’s worth remembering, of course, that many properties in Spain are built to withstand the scorching summer temperatures, and, as a result, may have rooms that are dark and gloomy in order to keep the temperature down.

Though that’s good for the heat, it’s not ideal for energy savings.

If that’s the case, and you really need to put the lights on during the day, consider switching to LED bulbs, since they can save as much as 80 percent on the bill compared to traditional bulbs, and they last much longer – years longer, in some cases.

2. Regulate the aircon 

Keeping the curtains and blinds open may be good for saving on electricity bills, but what about the heat?

With Spain in the midst of record-breaking summer heatwaves, during the hottest months Spaniards are dependent on their fans and air-conditioner units.

Regulating your use of air-con can help you save on bills. The ideal temperature should be between 24C and 26C and remember that for each degrees you drop the temperature, the energy output goes up by around 8 percent.

READ ALSO: Ceiling fan vs air con in Spain: Which offers the better price-coolness ratio

At night, many Spaniards opt to open the windows and keep the room ventilated as opposed to falling asleep with the aircon or fan on and racking up the bill.

READ ALSO: Spain to cut electricity tax by half to ease inflation pain

3. Shop around

An age old saving trick: shop around. 

Food prices in Spain have jumped over the course of 2022.

According to INE figures, in June the prices of 46 household products were more expensive and above the overall CPI rate of 10.2 percent.

These include eggs (23.9 percent more expensive); butter (23.1 percent); whole milk (21.1 percent); fresh fruit (19.3 percent); baby food (16.7 percent), poultry meat (14.1 percent), bread (13.9 percent); beef (13.1 percent) and or cheese (10.5 percent).

Being more creative with your shopping can help save on prices.

Fruit and veg shops (fruterías) are often far cheaper per kilo than the chain supermarkets, as are discount shops like Lidl and other local supermarkets. Consider going to the butcher (la carnicería) to save on meat.

Before going shopping, look online and compare prices between the different supermarkets. Make a list, and consider going for the supermarket’s line of own-brand products as opposed to more expensive brands.

As a famous British supermarket chain always reminds us – every little helps

4. Loyalty cards

That in mind, another way to soften the impact of inflation is to take advantage of promotional offers and loyalty cards. Spanish supermarkets often have 2×1 or 3×2 promotions, discounts, and savings when buying in bulk – particularly on dairy and poultry products. 

Consider getting loyalty cards at your local supermarket to make savings, and even at clothing stores, hairdressers and restaurants if they offer them. Loyalty cards not only offer discounts; you can often accrue a free service or product – shopping delivery, haircut, meal – by giving them repeat business.

5. Washing machine – know the peak and off-peak hours

With electricity bills historically high, Spain suffering heatwaves throughout the summer, and all this talk of fans and air-conditioning and keeping rooms ventilated, knowing the peak and off-peak electricity tariffs in Spain is an essential way to make savings and help right inflation.

The washing machine is well known as an appliance that uses a lot of electricity and takes a long time. With bills skyrocketing, and the price of electricity on the wholesale market exceeding €200 per megawatt hour (MWh), rising to €300/MWh during peak hours of the day, many Spaniards have taken to using their washing machines at times of the day that offer the cheaper tariffs.

READ ALSO: Inflation hack: what time should I use the washing machine in Spain?

From Monday to Friday, the cheapest time to use the washing machine is during the flat and off-peak slots. It may not be ideal, but by putting the washing machine on during the night, from 00:00 to 8:00 (off-peak), or in the morning, from 8:00 to 10:00 (flat), the kWh price can be significantly lower than during peak hour.

Similarly, another good time to use the washing machine, and perhaps the most convenient without being too costly, is after lunch from 2:00 p.m. to 6:00 p.m during another flat-rate session.

Fortunately, weekends and holidays correspond uninterruptedly with the off-peak time slot and there is, as a result, very little variation in prices depending on the time of day you use the machine, so you can wash your clothes at the weekend with worrying about racking up a huge bill.

Peak and off-peak times: 

Horas punta – peak hours (most expensive): 10-14:00h and 18-22:00h on weekdays.

Horas valle – off-peak (cheapest): 00-8:00h on weekdays; 24h on weekends and national holidays.

Horas llana flat rate (intermediate tariff): From 8-10h14-18h and 22-24h on weekdays.

6. Electronic devices

Although the pandemic jump started the working from home trend (teletrabajo in Spanish) and has many advantages, in the context of record-high inflation and utilities bills, it also has its negatives, like increased bills because you’re continuously using electrical devices such as computers.

If you work from home, consider using LCD screens – which save, on average, up to 37 percent more energy than normal screens – and try not to leave devices on standby.

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