Novofio cuts 2027 franchise expansion plan by 20%

Novofio, a hair transplant chain backed by Espaçolaser founder Paulo Morais, cut its proposed expansion for 2027 by 20% at a board meeting. Morais reported the adjustment to InfoMoney in an article published on 14 November 2026. It illustrates the impact he attributes to expensive credit on investment in Brazil’s franchise sector.

Cut affects planned growth

The 20% figure refers to a revision of the proposed expansion for the following year. It does not represent an announced reduction in the existing network or a fall in revenue. This distinction is important in understanding the scope of the decision: Novofio has recalibrated the growth it intended to achieve in 2027.

According to Morais, the plan now envisages less expansion than in 2026. “We are already projecting less expansion than in 2026,” he told InfoMoney when discussing the adjustment at the hair transplant chain.

The decision comes at a key point in the investment planning cycle. According to Morais, October, November and December are budget approval months, and discussions have been very conservative, both in revenue forecasts and expansion targets.

Novofio’s case gives a concrete example of this approach. Rather than simply expressing concern about the economic climate, the chain changed the proposal put to its board. However, the figure disclosed is the percentage reduction in the plan, not the number of openings envisaged.

Interest rates put pressure on investment and spending

In Morais’s view, persistently high interest rates make it harder to open businesses in two ways. They increase the cost of credit for companies and entrepreneurs, while also keeping household budgets under pressure and limiting the consumer spending that sustains businesses.

He describes a chain of effects: indebted consumers buy less, companies sell less, and businesses that rely more heavily on debt find it harder to meet their obligations. In this environment, investment plans tend to be revised.

In an article also published on 14 November, SpaceMoney reported Morais’s assessment that there would be little scope for a substantial fall in Brazil’s benchmark interest rate over the next 18 months to two years. This is the investor’s forecast, not a confirmed path for monetary policy.

That outlook helps explain the caution surrounding the 2027 budget. For Morais, the cost of borrowing is not a temporary obstacle that can be disregarded when setting targets for the following year.

Franchise sales already prompted revisions in 2026

Novofio’s adjustment follows weaker-than-expected franchise sales at companies in which Morais invests. According to him, sales of new franchises in 2026 were “well below expectations and plans”, prompting revisions to expansion forecasts.

There is an important limit to this account: it describes Morais’s experience across his own investments. It is not, in itself, a survey of all Brazilian chains, nor does it establish a sector-wide contraction.

Even so, it links the following year’s budget to difficulties already encountered. The caution stems not only from expectations about future interest rates, but also from the gap between planned and actual franchise sales at the companies Morais referred to.

He also believes that deciding whether to join a franchise network now requires a longer and more careful assessment. Expensive credit and pressure on consumer spending make it all the more important to check whether the entry requirements are compatible with a prospective franchisee’s financial resources.

Health and wellbeing remain in focus

Despite his cautious outlook for 2027, Morais remains committed to health and wellbeing. Speaking to InfoMoney, he identified these as areas that he believes should continue to perform well.

Novofio’s revision shows that a positive outlook for a particular business activity can coexist with lower opening targets. Confidence in demand for services does not remove the need to adjust the pace of investment to financing conditions and demand for new franchises.

In practice: anyone considering a franchise should distinguish potential demand from the pace of expansion. Before making a commitment, ask how the chain has revised its targets and test whether the investment remains viable with expensive credit and lower-than-expected revenue.