1.
July 2019 Quarter Results
Franchisor Sentiment Improves

2.
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companies considering franchising their business
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(and other network format) chains review and improve
performance for both franchisors and franchisees
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franchising insight and practical application
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franchisee capability and performance through focused
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3.
Key Survey Highlights
• Franchisors sentiment toward general business
conditions, saw a lift.
• Franchisors sentiment for franchisor growth continues to
show improved sentiment
• Responding Franchisors and Service Providers both
indicate improved sentiment to franchisee sales
• Franchisors sentiment towards franchisee profits lifted into
positives whilst Service Providers more subdued
• Franchisors and Service Providers both indicated
improved sentiment, whilst minor, towards operating costs
although still remains negative.

4.
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 20 franchisors
and 16 Service Providers.

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.
The Results
Franchisor outlook for general business
conditions (net 10%) saw a lift from net
negative 15% in April to be in positive for
the first time since January 2018. Service
Providers sentiment toward general
business conditions remained neutral.

7.
The Results
Franchisor sentiment for franchisor growth
prospects, showed a positive improvement
at net 50% up from net 35%. Service
Providers perspective of the same was net
6%, up from net negative 11%.

8.
The Results
Franchisor sentiment toward access to
financing remains a key challenge. That
said, sentiment this quarter was less
negative (at net negative 5%) than the
previous three quarters. Service providers
sentiment improved in line with
franchsiors at net 6% up from net negative
22%.

9.
The Results
Franchisor sentiment (net negative
10%) toward access to suitable
franchisees has been a key challenge
since October 2017. We note,
however, the sentiment is less
negative than the previous seven
quarters. Service Provider sentiment
toward access to suitable franchisees
was neutral.

10.
The Results
After hitting an all-time low
Franchisor sentiment towards access
to suitable staff has eased slightly to
net negative 37%. However, this still
remains a key area of concern.
Service Providers sentiment was very
similar at net negative 25% down on
the net negative 11% previously.

11.
The Results
On balance franchisors expected access
to suitable locations to improve (net
11%) Meanwhile, Service Providers
were considerably more positive at net
53% (up from net 13%) matching
previous high levels in 2011 and 2016.

12.
The Results
Franchisor sentiment toward
future sales levels per franchisee
have remained relatively positive in
comparison to other key areas. July
saw an increase in sentiment from
net 23% to net 50%. Service
Providers sentiment showed similar
trends albeit with a smaller
increase to net 25% up from net
11%.

13.
The Results
Franchisee operating costs remains
the most challenging area from both
Franchisors and Service Providers
viewpoint. Franchisors sentiment
eased slightly, after dipping to all
time low in April of net negative
58%, to a net negative 30% for July.
Service Providers sentiment eased
slightly but remains at very low
levels with net negative 69%.

14.
The Results
Franchisor sentiment regarding
franchisee profitability levels has seen
a steep increase to net 25% up from
net negative 23%. Service Providers
sentiment toward the same however
remained low at net negative 50% in
comparison to net negative 56%
previously.

15.
More Information
www.franchisingconfidence.co.nz
Including:
• More detailed and complete results and analysis
• All charts and illustrations

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