New Zealand Franchising Confidence Index | January 2014
January 2014 Quarter Results
FRANCHISORS REPORT RECORD CONFIDENCE IN GENERAL BUSINESS
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Key Survey Highlights
Responding Franchisors and Service Providers report
continued elevated optimism across many key growth
Franchisors sentiment toward general business conditions
is very high and comparable to other general business
confidence surveys (i.e. ANZ, BNZ and NZIER).
Franchisors remain positive about franchisee profitability
prospects – arguably franchising’s most important key
Franchisors forecasts indicated a negative outlook for
Quarterly survey of more than 400 New Zealand
franchisors and 100 specialist Service Providers (e.g.
consultants, banks, accountants, lawyers and
publishers) to the franchising community.
Explores confidence in key measures critical to the
success of franchising, including the wider
environment, growth determinants, and franchising
health attributes and franchise system growth
This survey represents the views of 35 franchisors
and 15 Service Providers.
GENERAL QUESTION AREAS
1. General business conditions
2. Franchisor growth prospects
3. Franchising growth drivers
• Access to capital
• Access to suitable franchisees
• Access to suitable locations
• Access to suitable staff
4. Franchisee growth & profitability prospects
• Franchisee sales levels
• Franchisee operating costs
• Franchisee profitability
5. How are things looking for franchisors and Franchisees in
their respective sectors?
6. What do you see as the greatest challenge to franchise
development in 2014?
whether they expect
the following aspects
to be better, the same
or worse over the
next 12 months
(compared to the
previous 12 months)
The latest results indicated extremely
positive franchisor (net 79%) and Service
Provider (net 93%) sentiment toward
general business conditions. These
elevated results were shared by the latest
results of other more general business
surveys including the BNZ (net 68% in
January), ANZ Business Outlook (64% in
December) and NZIER (52% in December)
business confidence surveys.
Franchisor growth also remained high (net
62%), up from the previous quarter. Service
Providers again provided significantly positive
results (net 93%), up from a net 79% in
Franchisors sentiment toward accessing
financing increased from 0% to a positive
9% , albeit Service Providers are more
positive at a net 33%
Franchisor sentiment toward access to
suitable franchisees improved this
quarter, from negative net 13% to net
0% Service Providers were more
optimistic at a net 47%.
Confidence in access to suitable staff
dropped slightly, Franchisor
sentiment to a net 3%. Service
Providers also decreased in
confidence (net 13%) from net 29% in
the previous quarter.
Franchisor sentiment towards access to
suitable locations also decreased from
net 19% to 0%. Service Providers were
more notably more positive at net 40%.
Franchisor and Service Provider
sentiment towards franchisee sales
levels both remained at a high
level. Franchisors at a net 60% and
Service Providers also up to 80%.
Franchisor confidence in operating
costs remained negative, during
this quarter at a net negative 18%.
Correspondingly, Service Provider
sentiment was a net negative
40%, which has decreased from the
Sentiment toward future franchisee
profitability was positive. Franchisors
reported an increase from 19% to 38%
and Service Providers a net 60%, up
from net 36% in the last quarter.
GREATEST CHALLENGE TO FRANCHISE DEVELOPMENT
Key 2014 Challenges
More detailed and complete results and analysis
All charts and illustrations
The Franchising Confidence Index, is founded, designed
and operated by Franchize Consultants, New Zealand
specialists in franchising and licensing network
development. Founded in 1989, Franchize Consultants
have a long and supporting association with New Zealand
For further information contact Dr Callum Floyd
Ph. (09) 523 3858
Mob. 021 669 519
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