Franchisors and service providers in New Zealand remain optimistic about general business conditions and franchisor growth prospects for 2017 according to a quarterly survey. While franchisors were positive about franchisee profitability and sales, they expressed concern about rising operating costs and access to financing. The greatest challenges to franchise development in 2017 were identified as finding suitable franchisees, staff, and containing ongoing franchisee costs.

1. January 2017 Quarter Results
FRANCHISORS START 2017 OPTIMISTIC

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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 positive, on balance.
• Franchisors sentiment remained elevated for franchisee
profitability prospects – arguably franchising’s most
important key performance indicator.
• Franchisors forecasts indicated a negative outlook for
accessing of finance and franchisee 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 39 franchisors
and 17 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 2017?
7. What will provide the greatest opportunity to
franchising development in 2017?
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 positive
franchisor (net 31%) and Service Provider
(net 41%) sentiment toward general
business conditions. These results were
shared by other more general business
surveys including the ANZ Business
Outlook 22% in December) and NZIER
(26% in January) business confidence
surveys.

7. The Results
Franchisor growth continued to gain
strength(net 59%), up from the previous
quarter. Service Providers reported positive
results at a net 47%.

8. The Results
Franchisors sentiment toward accessing
financing dipped significantly from net
15% to net negative 8% , Service
Providers were in comparison more
positive at a net 18%

9. The Results
Franchisor sentiment toward access to
suitable franchisees remains a key
challenge at net 10% this quarter,
from net 12% previously. Service
Providers were more optimistic at a
net 41%.

10. The Results
Franchisor confidence in access to
suitable staff lifted slightly, to a net
negative 3%. Service Providers
reported a similar result at net
negative 6%.

11. The Results
Franchisor and Service Providers
differed in their sentiment towards
access to suitable locations this quarter
in comparison to last, however their
reported net 16% and net 12%
respectively, is now very similar.

12. The Results
Franchisor sentiment towards
franchisee sales remained at an
elevated level, Franchisors at a net
56% and Service Providers
increased to net 53%.

13. The Results
Franchisor confidence in operating
costs decreased this quarter,
Franchisors reporting a negative net
13%, Service Providers were slightly
more positive at net 0%

14. The Results
Sentiment toward future franchisee
profitability continued to be positive.
Franchisors reported a slight decrease
from net 49% to net 44% and Service
Providers a net 35%, an increase from
last quarter.

15. The Results
GREATEST CHALLENGE TO FRANCHISE DEVELOPMENT
Key 2017 Challenges
 Finding franchisees
 Finding suitable staff
 Franchisee investment & ongoing cost
containment

16. More Information
www.franchisingconfidence.co.nz
Including:
• More detailed and complete results and analysis
• All charts and illustrations

17. 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