The bakery chain business touches the roof News

In recent years, it seemed that every place left vacant immediately became a new bakery in Barcelona and other Catalan cities. Mostly, these bakeries are associated with a chain of franchises such as Granier, 365, Pannus or Vivari, to name a few. After a time of expansion, it seems that the model has hit rock bottom, as recognized by the Spanish Association of Franchisors (AEF). Its annual report on the sector shows a slight decrease in the number of premises and turnover.

The 2019 and 2020 comparison of bread franchises data shows that today there is one less brand on the market: MonPa, which closed all its stores in September last year. The report also points out that there are 44 fewer establishments in Spain than last year. The sector employs 73 fewer workers and turnover has fallen by just over 13 million euros.

The closures that have made the most noise are those of Granier, as they lead to a complaint of 17 franchisees for crimes of fraud and forgery. This complaint, and the resulting problems, could increase the number of closures in the next AEF report.

Eduardo Abadía, executive director of the association, makes it clear that the model is not in crisis, that most bakeries-cafes of this type have withstood the pandemic and continue to operate, some with a readjustment of schedules. “Apart from Granier, we have no record of other bakery franchises closing,” he says. Abadía prefers to speak of “consolidation” of the sector and not of stagnation. It does not rule out, moreover, that when coronavirus restrictions are lifted, this business model may even grow again. “It is a very interesting sector for investors,” he adds.

According to the AEF’s 2020 report, with data closed at the end of 2019, there were 35 brands of bakeries, with 1,269 premises, which generated 4,470 jobs and a turnover of 279.4 million euros. A year earlier, data indicates that there were 36 brands, 1,225 premises, 4,397 workers and a turnover of 266.3 million. The decline is slight, but marks a “consolidation” of the type of business and shows that “the franchise has found a hole” in the bakery sector, according to Abadía.

Industrial offer

In general, these establishments follow the model of franchises and most share the offer of bakery, cafeteria and wifi access so that customers can accommodate themselves in the premises, of warm design. The intention is for the user to perceive that they are consuming artisanal and quality products, although most of their offer is actually industrial.

The head of the Granier bakery and cafeteria chain, led by its owner, Juan Pedro Conde, had to testify last Tuesday in a Madrid court as being investigated for fraud following a complaint by 17 franchisees accusing them of having “ ruinous and absolutely unviable businesses ”. The franchisees complain that Granier “tricked them into starting an absolutely unviable business, making them believe in a non-existent profitability, which has led to everyone suffering immediate losses.” They also consider that the company captures the franchisees through deception, in order to “get them into a ruinous business from the beginning.” They argue that they “benefit from the amounts initially delivered by the stores and the purchases of goods that are forced to make to the company from the outset.” Granier was founded in 2006, has about 300 stores and is characterized by low prices for its products.

El Fornet, a company that has 56 own premises in Spain and makes artisanal products, explains that it has not closed any of them. In some they have had to adjust their schedules, but all remain open, even those that are on the more touristy arteries. “We have generated a brand with tradition and rooted in the local population”, argues Eva Rodríguez, marketing director of El Fornet, to explain that the shops of Fontanella or Ronda Universitat remain open despite being the ones who suffer most from the lack of tourists and office staff.

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