Franchises: 50% went into debt to pay March wages

A new survey carried out by the Córdoba Franchise Chamber, in conjunction with the Argentine Association of Brands and Franchises and similar entities in Mendoza and San Juan revealed that in this sector, half had to take on debt to face the payment of wages of March.

The survey, which covered the main franchise chains and retail stores across the country, warns that “the situation looks much more complicated for this month, since 92 percent will require borrowing to be able to pay April salaries, while also 92 percent say they do not have the necessary support from the banks to face this situation. “

When businessmen and merchants were consulted about the decisions taken so far to face expenses in the face of lack of sales or abrupt drops, some indicated that they had taken vacations and others that they had applied suspensions.

There was a smaller group (two percent) that made layoffs, while the group that applied some type of salary reduction was somewhat more numerous (12 percent)

However, the majority did not change the salary conditions. Regarding the measures announced by the national government (until April 3), only three percent said they agree that they have been of great help to their company.

The study also shows that there is broad support for the partial easing of quarantine, since 74 percent agree that there should be a gradual opening of shops.

In total 84 chains and shops with almost 3,200 points of sale and more than 18 thousand direct employees were surveyed, from the gastronomic areas, specialized shops and services of all kinds, textiles, aesthetics and health, and training.

As in the first survey, 70 percent of businesses are still not operating, that is, completely closed, which implies zero income to meet their fixed obligations such as wages, rents, inputs, etc.

More than a thousand retail and service chains operate under a franchise system in Argentina and employ more than 200,000 people directly.

“The implementation of relief measures in the framework of compulsory social isolation is essential to support their subsistence,” said the Cordovan chamber of the sector.

Print edition

The original text of this article was published on 04/17/2020 in our printed edition.

Written by Argentina News

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