New Zealand Franchising | Franchize Consultants’ January 2017 Franchising Confidence Index demonstrates an increase in confidence across many sector growth drivers.
New Zealand Franchising
- The latest New Zealand franchising results indicated positive franchisor (net 31%) and Service Provider (net 41%) sentiment toward general business conditions. These results were shared by the latest results of other more general business surveys including the ANZ Business Outlook (22% in December) and NZIER (26% in January) business confidence surveys.
- Franchisors (net 59%) saw a continued steady increase for franchisor growth, whilst Service Providers (net 47%) maintained elevated levels. Franchisor results show an increase from previous quarter, with Service Providers minimally lower.
- Franchisors sentiment toward access to financing decreased from a net 15% to net negative 8%, Service Providers however remained positive at a net 18% up from net 0%.
- Franchisor sentiment toward access to suitable franchisees remains consistent this quarter, from net 12%, to net 10%. Service Providers, meanwhile, were more optimistic at a net 41%.
- Franchisor confidence in access to suitable staff increased slightly from negative net 13% to negative net 3%. Service Providers were slightly less positive at a negative net 6%.
- Franchisor sentiment towards access to suitable locations was much more optimistic up from negative net 13% to net 16%. Service Providers reported a slightly lowered net 12%.
- Franchisor and Service Provider sentiment towards future franchisee sales levels remained at an elevated level. Franchisors at a net 56%, with Service Providers nearly matching this sentiment at 53%.
- Franchisor confidence in franchisee operating costs remained negative during this quarter decreasing to net negative 13%. Service Providers were up slightly at net 0%.
- Sentiment toward future franchisee profitability continues to be positive this quarter. Franchisors reported a net 44%, and Service Providers a net 35%.
Overall, Franchize Consultants’ Franchising Confidence Index in January 2017 demonstrates continued levels of optimism in New Zealand franchising in the previous quarter.
Franchisors continue to maintain a positive outlook for general business conditions, sales levels per franchisee, with franchisor growth prospects. 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 for growth in 2017 included finding franchisees, franchisee investment and cost containment, along with finding suitable staff for both franchisors and franchisees.
The sentiment contained within the results indicate that in 2017 both Franchisors and Service Providers expect a positive year for franchising in New Zealand.
For a copy of the full report: www.franchisingconfidence.co.nz or www.slideshare.net/franchizeconsultants
Franchising Confidence Index Background
Franchize Consultants’ Franchising Confidence Index is a quarterly survey of circa 400 New Zealand franchisors and 100 specialist service providers (e.g., consultants, banks, accountants, lawyers and publishers) to the franchising community.
The Franchising Confidence Index represents confidence in key measures critical to the success of franchising in this country by reporting attitudes toward general business conditions, as well as key franchising growth determinants including access to capital, suitable potential franchisees, staff and locations. The Franchising Confidence Index also covers franchising health attributes and outcomes by exploring franchisee sales, operating costs and profitability, and franchise system growth prospects.
The data and analysis presented represents the views of 39 franchisors and 17 Service Providers collected between Monday 16th January and Friday 20th January 2017. Findings from both groups are reported separately. Respondents were asked whether they expected conditions to be ‘better,’ ‘same’ or ‘worse.’ ‘Net’ confidence is the difference between those reporting ‘better’ and ‘worse.’
Established in 1989, Franchize Consultants’ key services include a) helping prospective franchising companies with how to franchise, b) undertaking a franchise system review for established franchisors, and c) helping existing franchisors improve franchise system management through franchise training.
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