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New Zealand
Franchising
Sentiment and Trends
Dr Callum Floyd
Managing Director, Franchize Consultants
Email. callum@franchize.co.nz
Web. www.franchize.co.nz
Ph. 09 523 3858
2024
Franchize Consultants
Background
Established in 1989, Franchize Consultants (NZ) Limited
is New Zealand’s leading specialist franchise
consultancy working with many well-known international
and local, homegrown companies.
Franchize Consultants is author of the New Zealand
Franchisor’s Guide, New Zealand Franchisee’s Guide, the
FANZ Pre-Entry Programme for prospective franchisees and
the Franchising Best Practice Handbook.
Researching and reporting
on New Zealand franchising
sentiment and trends since
2010.
Key Services
→Franchise System Feasibility, Planning &
Development
→Established Franchise System Review & Improvement
→Franchisee and Franchisor Manuals
→Franchisee Satisfaction Surveys
→Franchise Advisory Councils
→International Franchising
→Franchisor & Franchisee Learning & Development
Team
Combined experience of more than 125 years franchising.
Six-time Westpac New Zealand Franchise Awards Service
Provider of the Year.
Our Values
→Integrity
→Clients come first and
partnership
→Strategic insight & thought
leadership
→Franchisee and franchisor
focus
→Value delivered
Background
• 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
What is the FCI?
The FCI is New Zealand’s annual survey of
confidence specific to franchising businesses.
The FCI reports on franchisor and specialist
service-provider attitudes toward general
business conditions, as well as key franchisor
growth determinants including access to capital,
suitable potential franchisees, staff and
locations. The FCI also reports on franchising
health attributes by exploring franchisee sales,
operating costs and profitability, and franchise
systems growth prospects.
Survey Background
• Since 2010, this is our 44th survey on the
topic. Moved from quarterly to annual in
2019.
• Annual survey of New Zealand franchisors and
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.
• This survey represents the views of 34
franchisors, and 16 service providers
collected from mid to late January.
2024 Franchising Sentiment &
Trends
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)
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 2024?
7. What will provide the greatest opportunity
to franchising development in 2024?
8. Long term, which future major trends are
likely to be most impactful on franchise
systems in the next 5-10 years?
Responses: Franchisors = 34, Service Providers = 16
General Outlook
Franchisor outlook for
general business conditions
showed good improvement from
a net negative 38% in January
2023 to a net positive 26%.
Service Provider sentiment
reflected franchisor
sentiment, directionally –
but grew to a far more
positive 63%.
-38%
26%
-40%
-20%
0%
20%
40%
60%
80%
100%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
General Business Conditions
Franchisors Service Providers
Compared to NZIER & ANZ Surveys
-38%
26%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
General Business Conditions
Franchisors NZIER ANZ
Ease of Finding Franchisees
Franchisor outlook for access
to suitable franchisees
showed good improvement from
a net negative 23% in January
2023 to a net positive 26%.
Service Provider sentiment
grew from a positive 26%
(2023) to 40% (2024).
-23%
26%
-40%
-20%
0%
20%
40%
60%
80%
100%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Access to Suitable Franchisees
Franchisors Service Providers
Obtaining Finance for
Franchisees
Franchisor outlook for access
to financing showed great
improvement from a very low
and net negative 70% in
January 2023 (lowest
recording) to a net 0%.
While much higher than 2023,
franchisor sentiment still
suggests challenges for 2024.
Service Provider sentiment
grew from a negative -31%
(2023) to a positive 47%
(2024).
-70%
0%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Access to Financing
Franchisors Service Providers
Finding Suitable Sites
Franchisor outlook for access
to suitable locations
tempered from a net 13% to
9%.
While still positive overall,
Service Providers reflected
this drop in sentiment -
moving from 46% (2023) to 33%
(2024).
13% 9%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Availability of Suitable Locations
Franchisors Service Providers
Finding Staff
Franchisor outlook for access
to suitable staff improved
from a net negative 14% to a
more positive 21%.
Service Provider sentiment
also grew from 23% (2023) to
47% (2024).
-14%
21%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Access to Suitable Staff
Franchisors Service Providers
Franchisee Topline Sales
Franchisor outlook for
franchisee sales levels
improved from a net negative
13% to a more positive 20%.
Service Provider sentiment
grew strongly from a more
negative -46% (2023) to a net
positive 27% (2024).
13%
20%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Franchisee Sales Levels
Franchisors Service Providers
Franchisee Operating Costs
Franchisor outlook for
franchisee operating costs
continues to present a huge
area of concern, albeit the
outlook is better than 2023.
Franchisor sentiment moved
from a net -73% (2023) to -
46% (2024).
Service Provider sentiment
similarly improved -69%
(2023) to -33% (2024).
-73%
-46%
-120%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Franchisee Operating Costs
Franchisors Service Providers
Franchisee Profits
Franchisor outlook for
franchisee profitability
levels remain negative but
improve from -13% to -14%.
Service Provider sentiment
improved markedly from -77%
(2023) to a still negative
but -20% (2024).
-13%
-14%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Franchisee Profitability Levels
Franchisors Service Providers
Franchisor Growth
Vast improvements were
recorded for franchisor
growth sentiment.
Franchisor outlook improved
from 0% to 31%.
Service Provider sentiment
improved markedly from -33%
(2023) to a a very high
positive 70% (2024).
0%
31%
-40%
-20%
0%
20%
40%
60%
80%
100%
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Franchisor Growth Prospects
Franchisors Service Providers
Greatest Challenge to Franchising
Development
Top 5 challenges for
2024
1. Access to finance
2. Finding
franchisees
3. Access to staff
4. Rising costs
5. Maintaining
franchise
profitability
0 1 2 3 4 5 6 7 8 9 10
Government regulations and compliance
Economic concerns
Investor confidence
Rising interest rates / cost of lending
Maintaining franchisee profitability
Franchisee sales/income
Franchisee COGS & OPEX
Finding suitable staff
Finding franchisees
Access to finance
Greatest Challenge to Franchising Development
Research contact
For further information on the Franchising Confidence Index,
contact:
Dr Callum Floyd, Managing Director of Franchize
Consultants
• Phone. +64 9 523 3858
• Mobile. +64 21 669 519
• Email. callum@franchize.co.nz
• Web. www.franchisingconfidence.co.nz
• Web. www.franchize.co.nz
New Zealand
Franchising
Sentiment and Trends
Dr Callum Floyd
Managing Director, Franchize Consultants
Email. callum@franchize.co.nz
Web. www.franchize.co.nz
Ph. 09 523 3858
2024

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New Zealand Franchising Confidence Index | January 2024

  • 1. New Zealand Franchising Sentiment and Trends Dr Callum Floyd Managing Director, Franchize Consultants Email. callum@franchize.co.nz Web. www.franchize.co.nz Ph. 09 523 3858 2024
  • 2. Franchize Consultants Background Established in 1989, Franchize Consultants (NZ) Limited is New Zealand’s leading specialist franchise consultancy working with many well-known international and local, homegrown companies. Franchize Consultants is author of the New Zealand Franchisor’s Guide, New Zealand Franchisee’s Guide, the FANZ Pre-Entry Programme for prospective franchisees and the Franchising Best Practice Handbook. Researching and reporting on New Zealand franchising sentiment and trends since 2010. Key Services →Franchise System Feasibility, Planning & Development →Established Franchise System Review & Improvement →Franchisee and Franchisor Manuals →Franchisee Satisfaction Surveys →Franchise Advisory Councils →International Franchising →Franchisor & Franchisee Learning & Development Team Combined experience of more than 125 years franchising. Six-time Westpac New Zealand Franchise Awards Service Provider of the Year. Our Values →Integrity →Clients come first and partnership →Strategic insight & thought leadership →Franchisee and franchisor focus →Value delivered
  • 3. Background • 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
  • 4. What is the FCI? The FCI is New Zealand’s annual survey of confidence specific to franchising businesses. The FCI reports on franchisor and specialist service-provider attitudes toward general business conditions, as well as key franchisor growth determinants including access to capital, suitable potential franchisees, staff and locations. The FCI also reports on franchising health attributes by exploring franchisee sales, operating costs and profitability, and franchise systems growth prospects.
  • 5. Survey Background • Since 2010, this is our 44th survey on the topic. Moved from quarterly to annual in 2019. • Annual survey of New Zealand franchisors and 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. • This survey represents the views of 34 franchisors, and 16 service providers collected from mid to late January.
  • 6. 2024 Franchising Sentiment & Trends 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) 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 2024? 7. What will provide the greatest opportunity to franchising development in 2024? 8. Long term, which future major trends are likely to be most impactful on franchise systems in the next 5-10 years? Responses: Franchisors = 34, Service Providers = 16
  • 7. General Outlook Franchisor outlook for general business conditions showed good improvement from a net negative 38% in January 2023 to a net positive 26%. Service Provider sentiment reflected franchisor sentiment, directionally – but grew to a far more positive 63%. -38% 26% -40% -20% 0% 20% 40% 60% 80% 100% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 General Business Conditions Franchisors Service Providers
  • 8. Compared to NZIER & ANZ Surveys -38% 26% -100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 General Business Conditions Franchisors NZIER ANZ
  • 9. Ease of Finding Franchisees Franchisor outlook for access to suitable franchisees showed good improvement from a net negative 23% in January 2023 to a net positive 26%. Service Provider sentiment grew from a positive 26% (2023) to 40% (2024). -23% 26% -40% -20% 0% 20% 40% 60% 80% 100% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Access to Suitable Franchisees Franchisors Service Providers
  • 10. Obtaining Finance for Franchisees Franchisor outlook for access to financing showed great improvement from a very low and net negative 70% in January 2023 (lowest recording) to a net 0%. While much higher than 2023, franchisor sentiment still suggests challenges for 2024. Service Provider sentiment grew from a negative -31% (2023) to a positive 47% (2024). -70% 0% -100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Access to Financing Franchisors Service Providers
  • 11. Finding Suitable Sites Franchisor outlook for access to suitable locations tempered from a net 13% to 9%. While still positive overall, Service Providers reflected this drop in sentiment - moving from 46% (2023) to 33% (2024). 13% 9% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Availability of Suitable Locations Franchisors Service Providers
  • 12. Finding Staff Franchisor outlook for access to suitable staff improved from a net negative 14% to a more positive 21%. Service Provider sentiment also grew from 23% (2023) to 47% (2024). -14% 21% -100% -80% -60% -40% -20% 0% 20% 40% 60% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Access to Suitable Staff Franchisors Service Providers
  • 13. Franchisee Topline Sales Franchisor outlook for franchisee sales levels improved from a net negative 13% to a more positive 20%. Service Provider sentiment grew strongly from a more negative -46% (2023) to a net positive 27% (2024). 13% 20% -60% -40% -20% 0% 20% 40% 60% 80% 100% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Franchisee Sales Levels Franchisors Service Providers
  • 14. Franchisee Operating Costs Franchisor outlook for franchisee operating costs continues to present a huge area of concern, albeit the outlook is better than 2023. Franchisor sentiment moved from a net -73% (2023) to - 46% (2024). Service Provider sentiment similarly improved -69% (2023) to -33% (2024). -73% -46% -120% -100% -80% -60% -40% -20% 0% 20% 40% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Franchisee Operating Costs Franchisors Service Providers
  • 15. Franchisee Profits Franchisor outlook for franchisee profitability levels remain negative but improve from -13% to -14%. Service Provider sentiment improved markedly from -77% (2023) to a still negative but -20% (2024). -13% -14% -100% -80% -60% -40% -20% 0% 20% 40% 60% 80% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Franchisee Profitability Levels Franchisors Service Providers
  • 16. Franchisor Growth Vast improvements were recorded for franchisor growth sentiment. Franchisor outlook improved from 0% to 31%. Service Provider sentiment improved markedly from -33% (2023) to a a very high positive 70% (2024). 0% 31% -40% -20% 0% 20% 40% 60% 80% 100% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Franchisor Growth Prospects Franchisors Service Providers
  • 17. Greatest Challenge to Franchising Development Top 5 challenges for 2024 1. Access to finance 2. Finding franchisees 3. Access to staff 4. Rising costs 5. Maintaining franchise profitability 0 1 2 3 4 5 6 7 8 9 10 Government regulations and compliance Economic concerns Investor confidence Rising interest rates / cost of lending Maintaining franchisee profitability Franchisee sales/income Franchisee COGS & OPEX Finding suitable staff Finding franchisees Access to finance Greatest Challenge to Franchising Development
  • 18. Research contact For further information on the Franchising Confidence Index, contact: Dr Callum Floyd, Managing Director of Franchize Consultants • Phone. +64 9 523 3858 • Mobile. +64 21 669 519 • Email. callum@franchize.co.nz • Web. www.franchisingconfidence.co.nz • Web. www.franchize.co.nz
  • 19. New Zealand Franchising Sentiment and Trends Dr Callum Floyd Managing Director, Franchize Consultants Email. callum@franchize.co.nz Web. www.franchize.co.nz Ph. 09 523 3858 2024