1.
January 2019 Quarter Results
FRANCHISING STARTS 2019 WITH A HINT OF OPTIMISM

2.
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3.
Key Survey Highlights
• Franchisors sentiment toward general business
conditions, whilst still negative, improved to be similar to
January 2018 results
• Franchisors sentiment for franchisor growth prospects
also saw improved sentiment after dropping each of the
last four quarters
• Responding Franchisors and Service Providers both
report less negative sentiment towards operating costs
per franchisee
• Franchisors and Service Providers forecasts indicated
access to suitable staff and suitable locations remain a
key areas of concern

4.
Key Survey Highlights
• Franchisor outlook commentary was mixed, with positives
for some regarding obvious strength in demand and sales.
Those more challenged cited issues, such as immigration,
tightening demand, competition, margin compression,
uncertainty and challenges finding franchisees and staff.
• Franchisors identified top three challenges to franchise
system development in 2019 as 1) finding franchisees, 2)
finding suitable staff and 3) access to finance.
• Franchisors identified many improvement opportunities for
the year ahead covering areas, such as technology,
existing franchise growth, better selling and marketing and
efficiency improvements.

5.
Background
• 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
prospects.
• This survey represents the views of 34 franchisors
and 16 Service Providers.

6.
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?
6. What do you see as the greatest challenge to
franchise development in 2019?
7. What will provide the greatest opportunity to
franchising development in 2019?
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)

7.
The Results
Franchisor outlook for general business
conditions (negative net 3%) moved closer
to the January 2018 sentiment of net 3%,
(up from net negative 22% in October
2018) whilst Service Providers sentiment
rose substantially to net 19%, similar to
that seen in October 2017 (net 13%) prior
to the change in government (up from net
negative 23% in October 2018).

8.
The Results
Franchisor sentiment for franchisor
growth prospects, whilst still low showed
strong improvement at net 23%, up from
the previous quarter’s net 7%. Service
Providers net 19% improved even more up
from net negative 27% in October.

9.
The Results
Franchisor sentiment toward access to
financing rallied to net negative 18% up
from an all time low of net negative 30%
in October. Service Providers confidence
was less positive dropping from 0% to a
net negative 6%.

10.
The Results
Franchisor and Service Provider
sentiment toward access to suitable
franchisees has been seen as a key
challenge for some time, however
both indicated improved sentiment
with Franchisors at net negative 24%
(previously net negative 48%) and
Service Providers at 0% (up from net
negative 15%).

11.
The Results
Franchisors indicated their outlook
for access to suitable staff remains a
key challenge with no change at net
negative 31%. Service Providers
confidence to access to suitable staff
at a net negative 38% (down from net
negative 31%).

12.
The Results
Franchisors, at net negative 3%, down
from net 13%, were slightly more
subdued this quarter in their outlook
for access to suitable locations. Service
Providers confidence was similar
dropping to net 0% from net 8%

13.
The Results
Franchisors sentiment toward
future sales levels per franchisee
dipped slightly to a positive net
26% (from net 30%), with Service
Providers sentiment showing a
strong increase at net 44% (up from
net 15%).

14.
The Results
Franchisee operating costs have
been seen as the greatest challenge
for some time. Whilst still
challenging there is improved
sentiment from Franchisors at net
negative 56% up from net negative
70%, and Service Provider sentiment
at net negative 25% up from net
negative 56%

15.
The Results
Franchisors, continue to report
decreasing sentiment regarding
franchisee profitability levels at a net
negative 12%, down from net negative
4% and the lowest point to date.
Service Providers were much more
positive improving to a net 19% from
a net negative 31%.

16.
The Results
GREATEST CHALLENGE TO FRANCHISE DEVELOPMENT
Key 2019 Challenges
 Finding franchisees/suitable franchisees
 Finding staff (zee and zor)
 Access to finance

17.
More Information
www.franchisingconfidence.co.nz
Including:
• More detailed and complete results and analysis
• All charts and illustrations

18.
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