Sr. Frango da Guia: Success or Failure in Brazil

This case focuses on the expansion of the Sr. Frango da Guia (SFG) restaurants from Portugal to Brazil. After opening a number of successful restaurants in Portugal, Manuel Costa exported his business model to Brazil and opened two restaurants there. Soon he faced employee theft and disappointing profits in his internationalization efforts. Costa had a number of options to resolve the problems: franchising, hiring Portuguese managers for his Brazilian restaurants, or partnering with a Brazilian business. In addition, conducting market research could also resolve questions about customer preference and effective marketing. All these options, however, would require further investment, which might not pay off. Costa faced a choice between investing further in his Brazilian restaurants or exiting the market altogether. The case addresses important factors faced by start-ups’ internationalization attempts, including franchising, long-distance firm management, the economic circumstances of a foreign country, and the impact of local stakeholders and cultures.