Franchise Research: Results from the latest Franchize Consultants Franchising Confidence Index.

1. October 2017 Quarter Results
FRANCHISORS CAUTIOUS OF ECONOMIC ENVIRONMENT

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. Key Survey Highlights
• Franchisors and Service Providers demonstrate a strong shift in
confidence levels, with changes prevalent in sentiment toward general
business conditions and growth prospects
• Availability of suitable staff along with suitable locations showed
increased sentiment. Previously these were viewed as key challenge
areas.
• Franchisor sentiment for access to suitable locations rallied in the July
report however sentiment has slipped back in October.
• Franchisor sentiment towards franchisee sales levels dipped, although
still remains strong. Service Provider sentiment was a little less
confident.

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 30 Franchisors
and 15 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
Both Franchisors and Service
Providers showed a strong shift in
their outlook for general business
conditions. Franchisors (net 3%)
down on the previous quarter
(26%). Service Providers similarly
down from net 43% in July to net
13%.

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, which had
previously remained stable over the
past four years, dipped substantially
to net 28 %. Service Providers were
similarly sombre at a net 7%.

8. The Results
Franchisor sentiment toward access
to suitable franchisees increased
markedly in July to net 13%, whilst
October has seen a marked
decrease to net negative 20%.
Service Providers were in agreeance
dropping from a net 36%, to net 7%

9. The Results
Franchisors sentiment toward the
availability of suitable staff, after
hitting a record low at a net
negative 32% in July, bounced back
to net negative 14%. Service
Providers were equally positive at a
net 7%, up from net negative 7% in
July

10. The Results
Franchisors sentiment this quarter has
bounced back from a net negative 5%
in July to a positive net 11% in October.
Service Providers outlook remained
stable at net 20% down from net 21%
•

11. The Results
Franchisor sentiment toward
franchisee operating costs remain a
challenge declining for the second
quarter from a net negative 15% to
net negative 21%. Service Provider
outlook remained more negative at
a net negative 27% - down from
July’s net negative 21%.

12. The Results
Despite more macro concerns
Franchisor sentiment toward
franchisee sales levels dipped,
although still remain strong at net
43%, whilst Service Providers
sentiment diminished from net 43% to
a net 13%.

13. The Results
Franchisors sentiment towards
franchisee profitability levels took a
dip for the second quarter to net 7%,
down from a July net 18%. A very
positive increase in July for Service
Providers was reversed to a net
negative 7%; a drop of 36%.

14. The Results
Franchisor and Service Provider
sentiment toward access to financing
remains a challenge, with franchisors
slightly less positive at a net negative
13%, down from a negative 8%.
Service providers sentiment was
elevated from a net negative 21% to a
negative 7%.

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