Franchise Case Study #1

Portobello Shop

Portobello Shop is one of the leading Brazilian manufacturers of ceramic tiles. Its products include ceramic tiles for walls, floors, and external cladding, mortar and grout, all produced in Tijucas, State of Santa Catarina.

Issue

Portbello’s business strategy included a high dependency on large clients. These large companies did not deliver a differentiated quality service to customers, and with their strong buying power, they lowered Portobello’s profit margin. In addition, the size of their accounts posed a high credit risk for Portobello.

Challenge

Portobello wanted to develop exclusive, dedicated, controlled, and motivated chains for distributing their products through companies that would deliver world class service for their customers.

Solution

Portobello decided to work with Addexo to create a new business strategy. Evandro La Macchia, the Development & Expansion Manager at Portobello explained their decision, “We chose Innovation [Addexo] by its identification with the kind of business we are implementing. Their job in franchisee targeting and recruiting has been one of the most successful factors for our project."

Addexo developed a strategy that involved opening several Portobello locations simultaneously in areas where the larger clients didn’t operate. Addexo attracted and selected thousands of franchisee candidates to operate Portobello Shop stores around the country.

Results

Within 18 months, 68 Portobello stores opened. These stores represented more than 20% of Portobello’s gross sales within 3 years and they offered higher margins and outstanding customer service. These stores also created positive advertising for the brand because of their premium location with high visibility. After five years, only two franchised stores closed or changed their franchisee.