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New Zealand Franchising Confidence Index | April 2017

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Results from the latest Franchize Consultants Franchising Confidence Index.

Franchize Consultants are franchising and licensing consulting specialists, focusing on:

1. Helping companies with how to franchise a business
2. Helping established chains improve performance
3. Building franchise and chain management capability

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New Zealand Franchising Confidence Index | April 2017

  1. 1. April 2017 Quarter Results Franchising Sentiment Positive, But Growth Constraints Emerge
  2. 2. • Franchize Consultants is the first point of contact for companies considering franchising their business • Franchize Consultants helps established franchised (and other network format) chains review and improve performance for both franchisors and franchisees • Franchize Consultants conducts specialist research for franchising insight and practical application • Franchize Consultants builds franchisor executive and franchisee capability and performance through focused training and education programmes About Franchize Consultants
  3. 3. Key Survey Highlights • Franchisors and Service Providers sentiment demonstrates a positive outlook overall on many key areas of sentiment (e.g. general business conditions, franchisor growth and franchisee profitability). • Concerns emerge for key growth enablers, including access to finance, access to suitable franchisees and availability of suitable staff. • Franchisors sentiment toward general business conditions remain positive but more subdued.
  4. 4. Background • Quarterly survey of circa 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 prospects. • This survey represents the views of 40 Franchisors and 17 Service Providers.
  5. 5. The Focus 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? Respondents indicate whether they expect the following aspects to be better, the same or worse over the next 12 months (compared to the previous 12 months)
  6. 6. The Results Franchisors remain positive but more subdued in their outlook for general business conditions (net 20%), down from a net 31% the previous quarter. Service Providers, were of a similar opinion with a drop from net 41% to a net 18%
  7. 7. The Results •Franchisors (net 46%) remained stable about prospects for franchisor growth. These results are in line with the net 45% in the previous quarter. Franchisor sentiment for franchisor growth prospects remain very strong, albeit dipping to a net 48% from 59% in January. Service Providers also indicate positive franchisor growth prospects overall at net 41%, a slight dip from net 47%.
  8. 8. The Results Franchisor sentiment toward access to suitable franchisees saw a drop from net 10% to net negative 10%. Service Providers, who last quarter were very positive at net 41% dropping to net 24% this quarter.
  9. 9. The Results Franchisors sentiment toward the availability of suitable staff hit the lowest point seen during the time of this research at net negative 26%, down from net negative 3%. Service Providers were, in comparison, more positive than last quarter up 6% to a net 0%. This area has been seen as a challenge for some time and is now hitting a little harder in certain areas.
  10. 10. The Results Access to suitable locations often provides quite a fluctuating picture however this quarter remained relatively stable with franchisors showing a net 17%, up from net 16%. Service Providers sentiment was slightly more sombre down from net 12% to net 6%.
  11. 11. The Results As historically demonstrated Franchisors and Service Providers views of operating costs in April continues to move in opposite directions. Franchisors sentiment this quarter increased from net negative 13% to net 0%, whereas Service Providers sentiment has taken a large dip decreasing from net 0% to a net negative 29%.
  12. 12. The Results Franchisor sentiment towards future franchisee sales levels decreased from a net 56% to net 49%. Service Providers, were slightly less positive than Franchisors showing a decrease from a net 53% to a net 41%.
  13. 13. The Results Sentiment toward franchisee profitability levels remained quite stable for Franchisors, down from a net 44% in January to a net 40% in April. Service Providers sentiment by contrast dipped substantially from a net 35% to a net 0%.
  14. 14. The Results Franchisor and Service Provider sentiment toward access to financing appears to be tightening with franchisors dropping from net negative 8% to net negative 15%. Service Providers dropped in net sentiment from a positive net 18% to 0% this quarter.
  15. 15. More Information www.franchisingconfidence.co.nz Including: • More detailed and complete results and analysis • All charts and illustrations
  16. 16. Franchize Consultants • 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 franchising. • For further information contact Dr Callum Floyd • Ph. (09) 523 3858 • Mob. 021 669 519 • Email. callum@franchize.co.nz • Web. www.franchisingconfidence.co.nz • Web. www.franchize.co.nz

Results from the latest Franchize Consultants Franchising Confidence Index. Franchize Consultants are franchising and licensing consulting specialists, focusing on: 1. Helping companies with how to franchise a business 2. Helping established chains improve performance 3. Building franchise and chain management capability

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