New Zealand Franchising Confidence Index | April 2013
April 2013 Quarter ResultsOPTIMISM BUILDS WITHIN THE FRANCHISING ECONOMIC GROWTH ENGINE
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Key Survey Highlights• Franchisor sentiment very positive this quarter across arange of important franchise sector growth drivers.• Franchisors are much more positive about generalbusiness conditions – when compared to other generalbusiness confidence surveys (i.e. ANZ, BNZ and NZIER).• Most importantly, franchisors are very positive aboutfranchisee profitability prospects – arguably franchising’smost important key performance indicator.
Background• Quarterly survey of more than 400 New Zealandfranchisors and 100 specialist Service Providers (e.g.consultants, banks, accountants, lawyers andpublishers) to the franchising community.• Explores confidence in key measures critical to thesuccess of franchising, including the widerenvironment, growth determinants, and franchisinghealth attributes and franchise system growthprospects.• This survey represents the views of 36 franchisorsand 24 Service Providers.
The FocusGENERAL QUESTION AREAS1. General business conditions2. Franchisor growth prospects3. Franchising growth drivers• Access to capital• Access to suitable franchisees• Access to suitable locations• Access to suitable staff4. Franchisee growth & profitability prospects• Franchisee sales levels• Franchisee operating costs• Franchisee profitability5. How are things looking for franchisors and Franchisees intheir respective sectors?Respondents indicatewhether they expectthe following aspectsto be better, the sameor worse over thenext 12 months(compared to theprevious 12 months)
The ResultsFranchisor responses continued toimprove to a net 53%, compared to 37%in January. Conversely, Service Providersentiment showed a decrease to 58%(current) from 66%.
The ResultsFranchisor outlook for franchisor growthprospects increased from a net positive 41%to 58%. Service Providers’ outlook echoed thiswith increase from 61% in January to 67%.
The ResultsBoth franchisors and Service Providersremain positive in their outlook foraccess to financing, on balance, albeitService Providers (net 26%) are morepositive than franchisors (net 13%).
The ResultsFranchisor sentiment toward access tosuitable franchisees dropped slightlythis quarter, from net 5% to 0%.Service Providers, meanwhile, weremore optimistic, showing a substantialincrease from net 9% to 38%.
The ResultsConfidence in access to suitable staffremained largely neutral, butpositive and improving, on balance.Franchisor sentiment increased to apositive net 3% from a negative net5%. Service Providers also increasedin confidence.
The ResultsFranchisor sentiments towards accessto suitable locations also rose from netnegative 5% to 0%. Service Providerswere more positive at net 33%.
The ResultsFranchisor and Service Providersentiment towards franchisee saleslevels both show substantialincreases, and to high levels overall.Franchisors rise 24% to a net 56%).Service Providers improve from anet 44% to 54%.
The ResultsFranchisor confidence in operatingcosts remained static, butnegative, during this quarter at anet negative 11%.Correspondingly, Service Providersentiment dropped from a netnegative 4% in January to negative17%.
The ResultsSentiment toward future franchiseeprofitability levels reached recordlevels this quarter. Franchisorsincreased confidence substantially toa net 44% from 13% in January.Service Providers showed a slightdecrease – but also reported goodpositive levels on balance.
More Informationwww.franchisingconfidence.co.nzIncluding:• More detailed and complete results and analysis• All charts and illustrations
Franchize Consultants• The Franchising Confidence Index, is founded, designedand operated by Franchize Consultants, New Zealandspecialists in franchising and licensing networkdevelopment. Founded in 1989, Franchize Consultantshave a long and supporting association with New Zealandfranchising.• For further information contact Dr Callum Floyd• Ph. (09) 523 3858• Mob. 021 669 519• Email. firstname.lastname@example.org• Web. www.franchisingconfidence.co.nz• Web. www.franchize.co.nz