Franchize Consultants conducted a quarterly survey of over 400 New Zealand franchisors and 100 service providers about confidence in the franchising sector. The survey found that while franchisors remained optimistic about general business conditions and growth prospects, their confidence in factors like availability of suitable franchisees and locations and franchisee sales levels and profitability declined from the previous quarter. Service providers were also less positive about franchisee sales levels and access to financing compared to the previous survey. Overall, the results pointed to continued confidence but mixed views about some key indicators of success for franchising in New Zealand.

1. April 2016 Quarter Results
FRANCHISING CONFIDENCE STRONG BUT MIXED

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3. Key Survey Highlights
• Responding Franchisors and Service Providers report
continued optimism across many key growth drivers.
• Franchisors sentiment toward general business conditions
remains elevated
• Franchisors report increased confidence for franchisee
profitability prospects – arguably franchising’s most
important key performance indicator.
• Franchisors forecasts indicated a negative outlook for the
availability of suitable locations, and operating costs

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 33 Franchisors
and 19 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
Franchisors were still on balance
quite positive about general
business conditions (net 33%), the
same as the previous quarter.
Service Providers reported similar at
a net 37%, but down from January
(net 53%).

7. The Results
Franchisor sentiment for franchisor
growth prospects decreased from a
net 56% in January to a still strong
45% here. Service Providers
perceptions were equivalent and
held at a net 47%.

8. The Results
Franchisor sentiment toward access
to suitable franchisees deteriorated
further from a net 0% to -6%.
Meanwhile, Service Providers
remained more positive at a slightly
improved 21%.

9. The Results
Franchisors remained constant and
subdued in sentiment toward the
availability of suitable staff at a net
negative 9%, down from -7%.
Service Providers were moderately
more positive at a net 11%, up from
0% in January.

10. The Results
Franchisors were more positive this
quarter in their outlook for access to
suitable locations, improving from a net
negative 16% to a positive 3%.
Meanwhile, Service Providers outlook
improved dramatically from 0% to an
extremely positive net 53%.

11. The Results
Franchisor perceptions
of franchisee sales levels decreased
from a very positive net 53% to a
still strong but reduced 39%.
Meanwhile, Sevice Providers were
particularly negative falling from a
similar starting position of 53% in
January, to a net negative 21% now
in April.

12. The Results
Both Franchisor and Service Provider
groups see the outlook for franchisee
operating costs as more positive,
albeit Franchisor views improve from
a net negative -19% to only just
positive 3%, and Sevice Providers
move from 20 to 26%.

13. The Results
Finally, it is somewhat pleasing to see
the outlook for franchisee
profitability levels remaining in net
positive territory. However, Franchisor
perceptions reduced from a high net
44% to 21%. By contrast, Service
Providers were increasingly optimistic,
improving from a net 33% in January
to 47% here in April.

14. The Results
Franchisor sentiment toward access
to financing decreased from 30% to
21%. Service Provider perceptions of
the same fell faster, from a positive
53% in January to 37% now.

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