A winning franchise formula

The franchise is an essential part of DIA’s strategy for delivering growth and creating value in all its operating markets. In 2012 DIA’s franchise stores accounted for 41.8% of its establishments, generating over 17,000 jobs and making a noteworthy contribution to the local business landscape.

DIA’s experience in the retail business, brand equity and extensive sales and logistics platforms represent qualitative advantages for entrepreneurs deciding to open a franchisee. Meanwhile, the franchise model is the optimal formula for operating neighbourhood stores thanks to its versatility and the proximity of the franchisee to the end customer, facilitating the provision of tailored service and reinforcing the supply of quality products at unbeatable prices. The synergies between DIA and its franchisees constitute one of the company’s main competitive advantages relative to its rivals.

The synergies between DIA and its franchisees constitute one of the company’s main competitive advantages relative to its rivals
At year-end 2011, 38% of DIA stores were franchised. DIA continued to shore up this management model throughout 2012, so that 40% of its stores were operating under this formula at year-end 2012, marking delivery of this strategic target one year ahead of schedule.

At the end of 2012, DIA had a total of 2,890 franchise stores, 391 (+15%) more than a year earlier. The performance and results of the franchise regime in recent years have made DIA one of Europe´s leading franchisors by number of stores.

A winning franchise formula

A noteworthy milestone this year in this respect was the inauguration of the group’s #200 franchise store in China just four years after DIA entered this Asian giant. The pace of franchise openings in China has been particularly buoyant in the last two years: 54 new stores in 2011 and 42 in 2012.

The franchise model is also proving hugely dynamic in Brazil, particularly last year with 81 new openings. The plan is to surpass this figure in 2013.

Franchisee profile

DIA’s franchisees are first and foremost enterprising men and women looking to go into business on their own. Their backgrounds are increasingly professional and specialised. They exhibit independence and initiative in managing their stores and employees.

Often times the group gives store employees the chance to pursue this entrepreneurial spirit by becoming franchisees. After all, they know their stores, and above all their customers, better than anyone. And they get the chance to partner with the solid and solvent leader in the management of this model.

Franchise store transformation

More than a mere aesthetic makeover, the switchover to the DIA Market model has implied change that has impacted the very management model, and this has also affected the franchise regime. DIA’s franchisees and their stores have had to evolve in parallel to provide increasingly efficient solutions in a competitive environment loaded with new demands.

Thanks to the DIA Market model, DIA’s franchisees are managing a more comprehensive food retail establishment in which their know-how and customer proximity emerge as qualitative tools for delivering efficiency gains.

End-to-end support for franchisees

Franchisee investment requirements vary by country. What does not vary, however, is DIA’s unwavering commitment to lending support in the form of special measures designed to help them get their business up and running. DIA offers a range of financial support mechanisms, either directly or via affiliated entities, to facilitate the upfront investment.

This support is additional to that traditionally extended by DIA to all its franchisees. For years, the company has had a comprehensive system for monitoring and supporting its franchisees – surveys, training programmes, communication tools, newsletter, etc. – that facilitates two-way communication, engaging its franchisees as stakeholders in the company’s everyday operations, and makes them aware of their crucial importance to its business development.

In 2012, DIA conducted its first external franchisee satisfaction survey. The survey was conducted by AC Nielsen, an independent external consultant, in order to pinpoint strengths and weaknesses with a view to further enhancing relations between the company and its franchisees. Over 90% of franchisees answered the questions frankly. According to those polled, the most highly-rated DIA attributes relate to the quality and competitiveness of the private label, the support provided by supervisors and implementation of the Club DIA loyalty card.

In general terms, 48% of the franchisees surveyed felt that their initial business expectations had been met, 52% would recommend the experience, while as many as 39% envisaged opening new franchise stores in the near future.

In light of the interest sparked by the survey, the plan is to repeat it at least annually so that DIA is kept permanently abreast of its franchisees’ needs in order to factor them into the company’s growth plans.

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Jesús Umbría / DIA