2024 New Zealand Prospective Franchisees Research Report
Franchize Consultants and Franchise New Zealand Media are proud to share key findings from the 2024 New Zealand Prospective Franchisees Research, conducted by both companies.
The research will be valuable for franchisors and other stakeholders interested in the future of franchising. The research explores the demographics, motivations, preferences, and decision-making processes of potential franchise buyers in New Zealand.
It aims to assist franchisors in understanding their target audience and guiding their recruitment strategies. Based on responses from 161 prospective franchisees, the report offers insights into the appeal and challenges of franchising.
The following are key findings from the research.
- Demographics and Profile. Most prospective franchisees (66%) are aged between 35 and 54, predominantly male (68%), and employed full-time (46%). Many have prior management (78%) or business ownership experience (43%). Household incomes vary, with 59% earning between $71,000 and $200,000 annually. About 39% consider opportunities in Auckland, though many are open to relocating for the right opportunity.
- Motivations and Appeal. The primary motivation for buying a franchise is greater income and wealth-building potential (52%). Other factors include better work-life balance, career change, flexibility, and creating a legacy for their children. Franchising is preferred over independent businesses due to its proven model, brand recognition, and the support and training provided by franchisors.
- Investment and Income Expectations. Investment levels range from under $25,000 to over $500,000, influenced by household income. While 19% expect to break even or incur losses in the first year, 60% anticipate a positive income, with 52% expecting annual earnings of $100,000 or more once established.
- Interests and Preferences. Popular sectors include service-oriented businesses (37%), food-based retailers (25%), and cleaning services (18%). Many are open to multi-unit investments and either greenfield or resale operations.
- Decision-Making Process. Prospective franchisees value due diligence, consulting sources like accountants (65%) and lawyers (51%). They prioritize speaking with existing franchisees (69%) and assessing franchise systems affiliated with the Franchise Association of New Zealand (FANZ). Despite contacting multiple franchisors, 43% only meet with one company, highlighting the importance of first impressions.
- Reservations. Key barriers include the cost of initial investment, securing financing, uncertain returns, and potential market saturation. Prospective buyers also express concerns about franchisor transparency and their own preparedness for business ownership.
The research underscores strong interest in franchising across diverse industries and investment levels. Franchisors must address prospective franchisees’ reservations, ensure robust support systems, and communicate the strengths of their models.
You can request a copy of the research report here: https://www.franchize.co.nz/prospective-franchisee-research-report/
For more information contact:
Dr Callum Floyd
Email. callum@franchize.co.nz
Ph. 09 523 3858
Contact Franchize Consultants if you’re contemplating franchising a business or would like help with an established franchise network. We’d be very happy to sit down with you to understand your situation and objectives and explain the supporting services we provide. You can also follow us via LinkedIn, Facebook, Instagram and Google.
Client Testimonials
We are proud of the work we have undertaken with many leading local,
international and emerging franchise companies in New Zealand.
We engaged Callum Floyd and his team on a number of important and impactful projects over many years. Franchize Consultants’ unique mix of real world experience and practical, pragmatic solutions has meant that they continue to be a valued source of independent advice on outsource arrangements, network forms, business models and analysis.
Our journey in franchising started with franchising introductory courses provided by Franchize Consultants. They assisted us in putting together personalised Field Support and Mentoring solutions for our franchise business Pukeko Rental Managers and our unique franchise model. We are now putting all our field managers through their courses.
The JAE Group has worked closely with Franchize Consultants since 2015 on various initiatives. The knowledge and experience Callum, Graham and the team bring, have strengthened our network, tightened up our standards and challenged our thinking and processes. We would definitely recommend the services Franchize Consultants provide.
We worked with Callum and the Franchize Consultants team to develop a comprehensive business planning tool for our franchise network. It was great to work together and combine their deep franchising knowledge with our business specific understanding. Highly recommend.
Super Liquor has worked with Franchize Consultants to assist with the implementation of a number of key initiatives focussed on delivering value to our franchisees. Amongst these were a complete upgrade of our Operating Manuals, and a franchisee financial benchmarking project. The professionalism and expertise of the Franchize Consultants team has been best in class. Callum and the team have absolutely delivered for SLH and will continue to be actively involved in our business supporting our franchise operations.
On every occasion we have found Callum and his Franchize Consultants team, to be exactly what we have needed. They have always been professional, hard-working, and helpful. Delivering exactly what was promised and have been willing to help as much as they possibly could. Streetwise Coffee
Franchize Bulletin October 2024