Seasonality in franchising: prepare your business before expanding

A business may perform very well over the festive season and struggle in the months that follow. Before franchising, the owner needs to understand these fluctuations and turn their experience into guidance that someone else can apply. In franchising, preparing for seasonality means offering a model that can operate throughout the year, without mistaking an exceptional period for normal trading conditions.

1. Distinguish seasonality from one-off events

Seasonality is a change in demand associated with recurring periods, such as holidays, special occasions, seasons or the school calendar. An unusually large sale to a corporate customer, by contrast, may boost turnover without establishing a pattern that a future outlet can repeat.

Organise the available records by month and, during particularly sensitive periods, by week. Do not look at turnover alone. Also compare:

• numbers of orders and customers served;
• sales mix by product or service;
• discounts and cancellations;
• delivery lead times and queues;
• wastage, returns and rework;
• opening days and hours.

Record the context behind each fluctuation. A downturn may have resulted from refurbishment, stock shortages or a change in opening hours, rather than lower consumer interest. Similarly, an exceptionally successful campaign may mask a normally weak month.

The shorter the trading history, the more cautious you should be about drawing conclusions. Brazil’s Law No. 13,966/2019 does not set a general requirement for a business to have traded for at least one year before it can be franchised. That does not mean a few months of sales are enough to demonstrate how it performs over a full year. Operational maturity and legal requirements are different matters.

2. Build a calendar that works in other locations

The original outlet’s calendar should not automatically be copied across all future franchises. A shop near offices may see footfall fall during holiday periods, while one in a tourist destination attracts more customers at precisely those times.

Create a calendar with four fields: expected event, likely effect on demand, preparation required and the signal that confirms action is needed. For example, a business tied to the school calendar could monitor early enquiries before increasing its capacity to serve customers.

Distinguish between three groups of events:

• Business-wide: dates that directly affect demand for the product or service.
• Local: municipal celebrations, school holidays and regional weather patterns.
• Site-specific: the calendar of a nearby shopping centre, university or business district.

For each event, specify when preparations should begin and when the decision should be reviewed. Avoid automatically increasing purchases or expenditure simply because a particular date is approaching.

If the model depends heavily on a local condition, record that dependency as a constraint on expansion. Excellent performance during the tourist season does not, on its own, demonstrate that the same operation will work in a residential neighbourhood.

3. Define responses to high, low and unexpected demand

The aim is not to predict everything, but to reduce improvisation. Prepare an operating checklist for each recurring situation, identifying who is responsible, what action is required, the deadline and the measure used to track progress.

For periods of high demand, establish how to adjust schedules, communicate realistic lead times and prioritise essential activities. Also decide when to stop accepting new bookings or orders to avoid jeopardising existing commitments. Selling beyond capacity can generate complaints and rework that eat into the period’s profits.

For periods of low demand, identify tasks that can be scheduled in advance, such as preventive maintenance, updating customer records and refresher training on procedures. Do not assume discounts will solve every downturn: assess whether a promotion merely brings forward purchases that would otherwise have been made at the normal price.

Include a response for situations where an expected peak does not materialise. Which orders with suppliers can still be adjusted? Which campaigns can be stopped? Who authorises the change?

Test this guidance in the existing business and record the results. The knowledge will only be ready to transfer once it no longer depends on the owner’s memory of ‘what this time of year is usually like’.

4. Be transparent about fluctuations in the franchise offer

Brazil’s current Franchise Law, Law No. 13,966/2019, repealed Law No. 8,955/1994. It requires a franchise disclosure document, known as the Circular de Oferta de Franquia (COF), written in Portuguese in clear, accessible language and including a description of the business and the franchisee’s activities.

Although the law does not require a specific section on seasonality, explaining significant fluctuations helps prospective franchisees understand the operation being offered. Do not present the best month as a permanent benchmark. If you share historical data, identify the period, context and limitations of comparisons with new outlets, without turning those figures into a guarantee of results.

As a rule, the COF must be provided at least ten days before a contract or preliminary agreement is signed, or any fee is paid to the franchisor or a person or company connected to it. Use this interval to clarify the operating calendar too, without pressuring prospective franchisees to decide on the strength of enthusiasm generated by a favourable season.

In practice: before expanding, produce an annual calendar supported by evidence, operating responses and known limitations. If you cannot yet explain how the outlet will get through the low season, carry out further validation before offering the franchise.