Franchisors and service providers reported continued optimism about general business conditions and franchisee profitability prospects, though optimism declined slightly from the previous quarter. Franchisors were less positive about their own growth prospects and access to suitable staff and franchisees. Both franchisors and service providers expressed negative sentiment about future operating costs. The survey was conducted by Franchize Consultants and represented the views of 32 franchisors and 13 service providers.

1. April 2014 Quarter Results
FRANCHISING SENTIMENT SHOWS CONTINUED OPTIMISM

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3. Key Survey Highlights
• Responding Franchisors and Service Providers report
continued optimism across many key growth drivers,
albeit slightly reduced from last quarter
• Franchisors sentiment toward general business conditions
is very high and comparable to other general business
confidence surveys (i.e. ANZ, BNZ and NZIER).
• Franchisors remain positive about franchisee profitability
prospects – arguably franchising’s most important key
performance indicator.
• Franchisors forecasts continue to indicate a negative
outlook for 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 32 franchisors
and 13 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
The latest results indicated continued
positive franchisor (net 63%) and Service
Provider (net 92%) sentiment toward
general business conditions – albeit
slightly subdued from last quarter. These
results were shared by the latest results of
other more general business surveys
including the BNZ (64% in April), ANZ
Business Outlook (67% in March) and
NZIER (52% in March) business confidence
surveys.

7. The Results
Franchisor growth prospects declined (net
41%), down net 21% from the previous
quarter. Service Providers results mirrored this
sentiment (net 69%), down from a net 93% in
January.

8. The Results
Franchisors sentiment toward accessing
financing decreased from 9% to 3% ,
albeit Service Providers are more positive
at a net 38%

9. The Results
Franchisor sentiment toward access
to suitable franchisees decreased
slightly this quarter, from a neutral
0% to negative net 3%. Service
Providers also showed less optimism
than previously at a net 8%.

10. The Results
Confidence in access to
suitable staff decreased.
Franchisor sentiment dropped
from net 3% to negative net
19%. Service Providers also
decreased to negative net
15%.

11. The Results
Franchisor sentiment towards access to
suitable locations increased slightly
from 0% to 7%. Service Providers were
less positive at net 8%, down from a net
40% in the last quarter.

12. The Results
Franchisor and Service Provider
sentiment towards franchisee sales
levels both remained at a high
level. Franchisors at a net 66% and
Service Providers also up to net
85%.

13. The Results
Franchisor confidence in operating
costs remained negative during this
quarter, at a net negative 6%.
Service Provider sentiment was at a
net negative 46%, which has
decreased from the last quarter.

14. The Results
Franchisors sentiment toward future
franchisee profitability was positive.
Franchisors reporting an increase from
38% to 50%. However Service
Providers a were less positive at a net
31%.

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