ABF expects more selective franchise expansion in Brazil in 2026

Expansion in Brazil’s franchise sector in 2026 should be judged less by the pace of new outlet openings and more by its ability to deliver results. That is the view of leaders at the Brazilian Franchising Association (ABF), brought together in an article published by Franquia.com.br on 24 October. Efficiency, margins and cash generation feature as priorities, alongside expansion beyond major urban centres and a more professional approach to franchise management.

Profitability carries more weight in assessing networks

The leaders’ assessment points to more selective growth. Rather than treating an increase in outlet numbers as the main measure of success, it places operational consistency at the heart of decision-making. The distinction is between extending a brand’s presence and making that presence financially sustainable.

Juarez Leão, a member of the ABF’s board, describes 2026 as a year of “natural selection”. In his view, the sector is at a turning point: margins and cash generation are becoming more important than the number of outlets opened. Networks with sound operations and controlled costs are expected to stand out, while those lacking that grip on their businesses lose ground.

This does not amount to a forecast that expansion will stop. The proposed focus is on profitable growth, replacing rapid openings with a more careful assessment of the quality of expansion. For anyone considering a franchise, the message is not to mistake brand visibility or announcements of new outlets for sufficient evidence of operational performance.

Expansion beyond major cities broadens the opportunity map

The geographical reach of franchises is also part of the discussion. According to ABF figures cited by Franquia.com.br, the sector operates in 3,828 Brazilian municipalities, equivalent to 69% of the country’s total. The figure given for 2024 was 61%.

This increase helps explain why expansion beyond major urban centres features among the trends identified by the leaders. Geographical expansion extends networks’ reach beyond the centres where they are already established. However, this trend is presented alongside the need for efficiency, rather than as a reason to open outlets indiscriminately.

Taken together, these two points suggest an important distinction for prospective business owners: the growing presence of franchises across Brazil does not, in itself, demonstrate that a particular brand is viable in a particular town or city. The practical advice is to assess the local opportunity without losing sight of the network’s operational capabilities. Geographical presence and profitability are different dimensions of the same investment decision.

Mergers and acquisitions move up the agenda

Tom Moreira Leite expects merger and acquisition activity to intensify. The factors cited include the pursuit of scale, efficiency, digitalisation and global competitiveness. This is an expectation about the direction networks will take, not a review of deals already completed.

This outlook ties in with the emphasis on the quality of expansion. In the view presented, growth is not simply about adding outlets: it also involves creating the conditions to operate more efficiently and compete in an environment that demands adaptation.

Artificial intelligence also features among the trends, with an emphasis on practical applications. It forms part of a broader digitalisation and operational improvement agenda. Technology is therefore positioned alongside margins and efficiency, rather than as a substitute for these fundamentals. The article also highlights networks’ adaptability as an important quality in keeping pace with change.

More professional franchisees at the heart of operations

A more professional approach among franchisees completes the set of priorities. By linking selective expansion, cost control and cash generation, the leaders reinforce a view in which outlet management plays a central role. The discussion shifts attention from opening a business to sustaining it throughout its operation.

These expectations were originally brought together in an ABF publication dated 13 February 2026, updated on 16 March, according to the reference provided by Franquia.com.br. They should therefore be understood as the leaders’ outlook for the year, revisited in October, rather than confirmation that all the trends have already materialised.

In practice: before choosing a network, prospective franchisees should investigate how it monitors costs, margins and cash generation. Outlet numbers remain useful information, but should not replace an assessment of operational quality.