New Zealand Franchising Confidence Index | April 2015
- Responding Franchisors and Service Providers sentiment remains positive across many key growth drivers.
- Franchisors sentiment toward general business conditions remain elevated.
- Franchisors remain positive about franchisee profitability levels – arguably franchising most important key performance indicator.
- Franchisors sentiment for franchisor growth prospects increased slightly, however sentiment for sales level per franchisee, access to suitable staff and operating costs remained at lower levels.
- The Franchize Consultants’ April 2015 Franchising Confidence Index demonstrates a continued positive outlook across overall sector growth drivers.
- The latest results indicated positive franchisor (net 41%) sentiment toward general business conditions. These results were higher than the latest results of other more general business surveys including the ANZ Business Outlook (35.8% in March) and NZIER (20% in March) business confidence surveys.
- Both franchisors (net 59%) and Service Providers (net 27%) remain positive about prospects for franchisor growth. Franchisor results increased slightly from 57% in the previous quarter.
- Franchisors sentiment toward access to financing decreased from a 41% to 28%, Service Providers are slightly more positive than franchisors at a net 36%.
- Franchisor sentiment toward access to suitable franchisees remained the same this quarter, at a net 17%. Service Providers, meanwhile, were more optimistic at a net 55%.
- Franchisor confidence in access to suitable staff increased slightly from negative net 18% to negative net 7%. Service Providers reported 0%.
- Franchisor sentiment towards access to suitable locations decreased from net 12% to net 7%. Service Providers were reflective of this reporting net 9%.
- Franchisor and Service Provider sentiment towards future franchisee sales levels remained elevated. Franchisors at a net 38%. Service Providers reported a net 45%.
- Franchisor confidence in franchisee operating costs remained negative during this quarter at a net negative 10%. Service Provider sentiment was a negative net 9%, also decreasing from net 6% in the previous quarter.
- Sentiment toward future franchisee profitability remained positive and increased from last quarter. Franchisors reported a net 41%, and Service Providers a net 55%.
Overall, Franchize Consultants’ Franchising Confidence Index in April 2015 demonstrates a continued positive outlook, but more subdued than the previous quarter.
Franchisors continue to maintain a positive outlook for general business conditions, sales levels per franchisee, with franchisor growth prospects also showing a slight increase. We were also encouraged to record a continued positive outlook for franchisee profitability, arguably a franchise system’s most important key performance indicator.
Key franchisor identified challenges included the availability of suitable staff, and operating costs.
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