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New Zealand Franchising Confidence Index | January 2022

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New Zealand Franchising Confidence Index | January 2022

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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 franchise a business
2. Helping established chains improve performance
3. Building franchise and chain management capability

Results from the latest Franchize Consultants Franchising Confidence Index.

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

1. Helping companies 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 | January 2022

  1. 1. New Zealand Franchising Sentiment and Trends 2022 Dr Callum Floyd Managing Director, Franchize Consultants Email. callum@franchize.co.nz - Web. www.franchize.co.nz - Ph. 09 523 3858
  2. 2. Franchize Consultants Background Established in 1989, Franchize Consultants (NZ) Limited is New Zealand’s leading specialist franchise consultancy working with many well-known international and local, homegrown companies. Franchize Consultants is author of the New Zealand Franchisor’s Guide, New Zealand Franchisee’s Guide, the FANZ Pre-Entry Programme for prospective franchisees and the Franchising Best Practice Handbook. Researching and reporting on New Zealand franchising sentiment and trends since 2010. Key Services →Franchise System Feasibility & Development →Established Franchise System Review & Improvement →Franchisee and Franchisor Manuals →Franchisee Satisfaction Surveys →Franchise Advisory Councils →International Franchising →Franchisor & Franchisee Learning & Development Team Combined experience of more than 125 years franchising Our Values →Integrity →Clients come first and partnership →Strategic insight & thought leadership →Franchisee and franchisor focus →Value delivered
  3. 3. Background • 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
  4. 4. What is the FCI? The FCI is New Zealand’s annual survey of confidence specific to franchising businesses. The FCI reports on franchisor and specialist service-provider attitudes toward general business conditions, as well as key franchisor growth determinants including access to capital, suitable potential franchisees, staff and locations. The FCI also reports on franchising health attributes by exploring franchisee sales, operating costs and profitability, and franchise systems growth prospects.
  5. 5. 2022 Franchising Sentiment & Trends 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) 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 2022? 7. What will provide the greatest opportunity to franchising development in 2022?
  6. 6. General Business Conditions Franchisor outlook for general business conditions shows deterioration to net negative 27% in January 2022 from net 20% in January 2021.
  7. 7. Access to Suitable Franchisees Franchisor sentiment towards access to suitable franchisees returns to net negative 27% in 2022 following improvement to net 23% in 2021.
  8. 8. Access to Financing Franchisor sentiment towards access to financing deteriorates further to an all-time low at net negative 70%, the lowest net confidence recorded since the Franchising Confidence Index was established in 2010.
  9. 9. Access to Suitable Locations Franchisor outlook on suitable locations remains largely unchanged at net 9% from net 14% in 2021.
  10. 10. Access to Suitable Staff Franchisor outlook towards access to suitable staff shows a strong decline to net negative 78% following from an improvement in 2021. The net negative 78% is the lowest net confidence recorded for this measure since the Franchising Confidence Index was established.
  11. 11. Franchisee: Sales Levels Franchisors sentiment toward future sales levels per franchisee declines to net 0% from net 13% in 2021.
  12. 12. Franchisee: Operating Costs Franchisee operating costs remain a concerning area – with franchisors sentiment worsening to net negative 73% in 2022 from net negative 40% in 2021.
  13. 13. Franchisee: Profitability Levels Following a similar trend to franchisee sales and operating costs, franchisor outlook on franchisee profitability levels decline to net negative 43% in 2022 from net negative 7% in 2021.
  14. 14. Franchisor Growth Prospects Franchisor sentiment for their growth prospects softens to net 14%, down from net 31% in 2021.
  15. 15. Greatest Challenge to Franchising Development Top 5 challenges for 2022 1. Access to staff 2. COVID-19 impact /uncertainty 3. Finding franchisees 4. Access to finance 5. Government regulations
  16. 16. Research contact For further information on the Franchising Confidence Index, contact: Dr Callum Floyd, Managing Director of Franchize Consultants • Phone. +64 9 523 3858 • Mobile. +64 21 669 519 • Email. callum@franchize.co.nz • Web. www.franchisingconfidence.co.nz • Web. www.franchize.co.nz

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