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New Zealand Franchising Confidence Index | October 2017

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

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New Zealand Franchising Confidence Index | October 2017

  1. 1. October 2017 Quarter Results FRANCHISORS CAUTIOUS OF ECONOMIC ENVIRONMENT
  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 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. 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. 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 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. 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. 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. 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. 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. 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. 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. 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. 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. 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

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

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