HomeFranchising BrasilNewsCleanNew is a finalist in the International Highlight Award; see more about the case

CleanNew is a finalist in the International Highlight Award; see more about the case

CleanNew is a finalist in the International Highlight Award; see more about the case

“Internationalization saved my company, my brand, my dreams, and showed me an option maybe I wouldn’t dare to explore otherwise.” The statement above was made by Fritz Paixão, CEO of CleanNew, the leading franchise chain of dry cleaning and shielding of upholstered furniture in Latin America. The brand is one of the 14 finalists in the International Highlight Award, promoted by Franchising Brasil — a sector project for the internationalization of Brazilian franchise brands carried out by means of a partnership between the Brazilian Association of Franchising (ABF) and the Brazilian Trade and Investment Promotion Agency (Apex-Brasil).

CleanNew is currently present in the United States, Colombia and Argentina, and the plan is to take the brand to the Arabian market. During the pandemic, the company had a 30% increase in earnings and an increase of approximately 10% in the number of new franchisors, and forecasts show an expected increase by 50% in earnings for the next quarter.

CleanNew’s Successful trajectory

CleanNew was founded in 2014 to meet a demand of the automotive sector in luxury condos in the city of Salvador. Noticing an unmet need of home services such as dry cleaning of upholstered items like sofas and chairs, Fritz discovered a market niche that hadn’t been properly explored at that time, and such discovery changed the history of the company. “We reached success and then many celebrities became our customers and were so satisfied with our services that they started posting about it on their social media, that’s how CleanNew became known in the entire country”, he says.

In the following four years, the brand spread across Brazil via franchising. In June 2018, after a partnership dispute, Fritz lost 50% of his franchisees, resulting in a 75% decrease in earnings.

“After a difficult moment of readjustment to a new financial reality, I gathered me team together, invested more in infrastructure and bet on international expansion. I had to keep the cash balance, and that was the best and fastest way to do it before the company would break down”, says the businessman.

The captivation of master franchises in Colombia, Argentina and the United States occurred by means of the brand exposure in social media – today the corporate profile of CleanNew has over 106 thousand followers on Instagram. According to Fritz, in his first meeting with the Colombian investor he asked a friend who speaks Spanish to assist him, and later on he hired a lawyer firm affiliated with ABF that helped him with all the documents required.

In the first year of operation in Bogotá, the profit margin of the chain was approximately 40% of the invested amount, and equal to 29% in Argentina. According to Fritz, no financial investment in marketing was made: “We just used the social media in our favor, exactly how we had done it in Brazil, and a great number of celebrities promoted our services because they are innovative and offer customers a positive experience”, he explains.

In March 2019 Fritz went to Miami to make the brand take its first steps in the American city where he currently lives. “Since then, we have closed great deals in Miami with Brazilian and Italian furniture companies like Artefacto, Saccaro, Minotti and Baxter, which started offering our services in their stores as a kind of extended warranty for the upholstered items”, he says, adding up that in the first year the brand earned USD 401,69 thousand, a profit margin of 34% regarding its first unit opened there.

Fritz mentions that the internationalization case helped to save his company. “The business model has shown to be highly profitable in those countries, with a payback lower than expected and profitability higher than the one in Brazil. Such factors gave investors a high profitability since the beginning of the operation”, he completes.

About the Internationalization Highlight Award

The purpose of the award is to recognize chains that, by participating in initiatives developed by the program destined for promotion and qualification, have started or achieved a consistent internationalization process of their brands.

The award ceremony will be announced soon and three franchises will be the winners in the general category and one chain will be the winner in the Strategy and Consolidation category, which was created because of the high quality of the cases submitted to Apex-Brasil and ABF for appreciation. The criteria to be evaluated by the judging panel composed of members of the Franchising Brasil Management Board are: complexity of sector and market; operationalization process; impact of case; innovation of the initiative; and relationship with the participation in the Program.

About Franchising Brasil

Franchising Brasil is a sector project carried out by means of a partnership between the Brazilian Association of Franchising (ABF) and the Brazilian Trade and Investment Promotion Agency (Apex-Brasil) for the internationalization of Brazilian franchise brands and promotion of their businesses abroad. The initiative was developed to promote this business model that is well recognized in the main international markets.

READ MORE: Meet the shortlisted brands nominated for the International Highlight Award