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Case
-
Reference no. E505-042-1
Spanish language
Subject category: Marketing
Authors: Lourdes Perez (EADA Business School)
Published in: 2005
Length: 28 pages
Data source: Published sources

Abstract

This is a Spanish translation of the case ''505-042-1''. Lizarran, a Spanish franchise chain of restaurants, was founded in 1988 by Mateo Ferrero. It started in Sitges (Barcelona, Spain) with two restaurants and continued a steady expansion until 1995 when Mateo and his partner German Funes decided to register the brand and established Lizarran as a national and international leader among tapas restaurants. The restaurant sector in Spain, though fragmented, is a growing and dynamic one, with analysts forecasting opportunities in the theme (Mexican, Thai, Lebanese, Japanese) and traditional Spanish food segments. The franchising business model, though introduced in Spain in the 1970s remained undeveloped until 1986 when Spain joined the European Union and started its expansion during the 1990s growing steadily from 1998 (4.2 billion euros) through to 2000 (8.2 billion euros) with 750 chains and 31,000 establishments. In the year 2000, restaurant franchising was the leader in the overall franchise sector by number of chains and establishments (13.7% of the total). In the coming years, trends seem to indicate a new consolidating phase with a lower number of chains professionally managed as service companies for their franchisees. Until 2000 the company had funded the business expansion internally, mainly through short-term debt and retained earnings. To achieve faster growth they need to attract external investors and undertake the following strategic decisions: (1) choose the right partner (venture capital fund, international food fund, alliance with one food or beverage producer); (2) set directions (the right mix between corporate owned and franchised establishments; domestic and international expansion); and (3) manage the changes.
Industry:
Size:
SME (small to medium-sized enterprise)
Other setting(s):
2000

About

Abstract

This is a Spanish translation of the case ''505-042-1''. Lizarran, a Spanish franchise chain of restaurants, was founded in 1988 by Mateo Ferrero. It started in Sitges (Barcelona, Spain) with two restaurants and continued a steady expansion until 1995 when Mateo and his partner German Funes decided to register the brand and established Lizarran as a national and international leader among tapas restaurants. The restaurant sector in Spain, though fragmented, is a growing and dynamic one, with analysts forecasting opportunities in the theme (Mexican, Thai, Lebanese, Japanese) and traditional Spanish food segments. The franchising business model, though introduced in Spain in the 1970s remained undeveloped until 1986 when Spain joined the European Union and started its expansion during the 1990s growing steadily from 1998 (4.2 billion euros) through to 2000 (8.2 billion euros) with 750 chains and 31,000 establishments. In the year 2000, restaurant franchising was the leader in the overall franchise sector by number of chains and establishments (13.7% of the total). In the coming years, trends seem to indicate a new consolidating phase with a lower number of chains professionally managed as service companies for their franchisees. Until 2000 the company had funded the business expansion internally, mainly through short-term debt and retained earnings. To achieve faster growth they need to attract external investors and undertake the following strategic decisions: (1) choose the right partner (venture capital fund, international food fund, alliance with one food or beverage producer); (2) set directions (the right mix between corporate owned and franchised establishments; domestic and international expansion); and (3) manage the changes.

Settings

Industry:
Size:
SME (small to medium-sized enterprise)
Other setting(s):
2000

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