The January 2012 Franchising Confidence Index survey found: 1) Franchisor confidence rebounded following substantial deterioration in the previous quarter, though uncertainty remains. 2) Improvements were seen in general business conditions, access to financing, and franchisor growth prospects. 3) However, operating costs for franchisees are still challenging and franchisors' outlook on franchisee profitability declined to its lowest level on record.

1. January 2012 Quarter Results

2. Background
• Quarterly survey of 413 New Zealand franchisors and
115 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 37 franchisors
and 19 service providers.

3. The Focus
QUESTION AREAS
1. General business conditions
2. Franchisor growth prospects
3. Franchising growth drivers Please indicate
• Access to capital whether you expect
• Access to suitable franchisees the following aspects
• Access to suitable locations to be better, the same
• Access to suitable staff or worse over the
4. Franchisee growth & profitability prospects next 12 months
• Franchisee sales levels (compared to the
• Franchisee operating costs previous 12 months)
• Franchisee profitability
5. How are things looking in your sector?
6. What do you expect will provide the greatest
challenge to franchising development this year?

4. The Results
Both franchisor and service providers’ outlook
for general business conditions have
rebounded to a net 32%, following the
substantial deteriorations recorded in the
October 2011 survey. Note, responding
franchisor sentiment in late January appears
more positive than that reported by general
business in the December reports of the NZIER
(-3%), BNZ (3.20%) and National Bank business
confidence surveys.

5. The Results
Both franchisors and service providers
registered increases in sentiment for
franchisor growth prospects. Franchisors net
sentiment improved from net 17 % in October
to net 34% in January. Meanwhile, service
providers’ confidence (net 37%) improved
from a net 14% in the previous quarter.
However, franchisors have become notably less
confident in their growth prospects over time.

6. The Results
Encouragingly, the outlook for financing
has improved. Both franchisors (net
18%) and service providers (net 37%)
recorded substantial improvements in
sentiment for access to financing.

7. The Results
In regards to the ease of access
to suitable franchisees, small
uptrends are noted with
franchisors (net 3%) and Service
Providers (net 37%).

8. The Results
Sentiment regarding access to suitable
staff for both franchisors (net 21%) and
Service providers (net 26%) improve.

9. The Results
The franchisor outlook for access to
suitable locations remains reasonable
(net 26%), while this percentage lowers
slightly from net 32% (Oct 2011) to 26%
for Service providers.

10. The Results
Franchisor expectations for franchisee sales levels (net 29%) and
operating costs (negative net 26%) showed slight improvements, while
their outlook for franchisee profitability levels declined (negative net 8%).
Service provider sentiment for franchisee sales levels decreased slightly
(net 11%), but increased for franchisee operating costs (negative net 11%)
and profitability levels (negative net 5%).

11. Results Summary
• The Franchize Consultants’ January 2012 Franchising Confidence Index
finds a rebound in franchisor confidence, following the substantial
deterioration in October 2011. However, considerable uncertainty
remains.
• Notable improvements are recorded for general business
conditions, access to financing and franchisor growth prospects.
• Meanwhile operating costs per franchisee are perceived to remain
challenged, and franchisors outlook for franchisee profitability falls to
the lowest level (net negative 8%) on record.

12. More Information
Including:
• The Greatest Challenge to Franchising Develop,ment
in 2012
• More detailed and complete results and analysis
• All charts and illustrations
• Franchisor and service provider comments in their
entirety
www.franchisingconfidence.co.nz

13. 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@fcnzl.co.nz
• Web. www.franchisingconfidence.co.nz
• Web. www.franchize.biz