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

1. April 2019 Quarter Results
Franchisor Sentiment Remains Subdued

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
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3. Key Survey Highlights
• Franchisors sentiment toward general business
conditions, dipped after a small lift in January
• Franchisors sentiment for franchisor growth is one of the
few areas which continues to show improved sentiment
• Responding Franchisors and Service Providers both
indicate operating costs per franchisee as there main
challenge
• Franchisors and Service Providers forecasts indicated
access to suitable staff and suitable locations remain key
areas of concern
• Franchisors and Service Providers both indicated
improved sentiment towards availability of suitable
locations

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 26 franchisors
and 9 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?
6. What do you see as the greatest challenge to
franchise development in 2019?
7. What will provide the greatest opportunity to
franchising development in 2019?
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 negative 15%) dipped after
a small lift in January sentiment at net
negative 3%, whilst Service Providers
sentiment negated the positive gains seen
in January of net 19%, to indicate
sentiment of net 0%.

7. The Results
Franchisor sentiment for franchisor
growth prospects, is one of the few areas
showing improved sentiment at net 35%
up from net 23%. Service Providers on the
other hand dropped from net 31% to a net
negative 11%.

8. The Results
Franchisor sentiment toward access to
financing hit an all time low at net
negative 31% down from net negative
18% in January. Service Providers
confidence also low dropping from net
negative 6% to a net negative 22%.

9. The Results
Franchisor and Service Provider
sentiment toward access to suitable
franchisees continues to fluctuate
quarter to quarter. Both Franchisors at
net negative 31% (previously net
negative 24%) and Service Providers at
net negative 11% (down from net 0%)
sentiment dipped this quarter.

10. The Results
Franchisors sentiment towards
access to suitable staff has also hit a
low at net negative 48%; a sentiment
trend which has been declining for a
number of years. Service Providers
were a little more buoyant at net
negative 11%, up from net negative
38%.

11. The Results
Franchisors, at net 13%, (previously net
negative 3%) and Service Providers also
at net 13% (from net 0%) showed
improved sentiment towards access to
suitable locations.

12. The Results
Franchisors sentiment toward
future sales levels per franchisee
moved very slightly retaining a
positive net 23% (from net 26%),
with Service Providers sentiment
showing slightly more easing at net
11% (down from net 44%).

13. The Results
Franchisee operating costs have
been seen as the greatest challenge
for some time and it remains the
number one challenge based on
Franchisor views at a net negative
58%, and Service Providers indicate a
net negative 78% sentiment.

14. The Results
Franchisors sentiment regarding
franchisee profitability levels declined
further to a net negative 23%, down
from net negative 12% and the lowest
point to date. Service Providers
positive sentiment of net 19% in
January was negated to a net negative
56%.

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