1. January 2020 Quarter Results
FRANCHISORS BRACE FOR 2020 AND BEYOND

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3. Key Survey Highlights
• Franchisor outlook for general business conditions showed
slight improvement from the October 2019 whilst Service
Providers sentiment stayed the same
• Franchisor and Service Provider sentiment towards
growth prospects improved to be more in line with January
2019
• Responding Franchisors and Service Providers sentiment
has continued to improve for Sales levels per franchisee
with this quarter showing the same trend
• Franchisors and Service Providers continue to indicate
finding suitable staff as their most critical challenge
• Operating costs remain a key focus for Franchisors
however sentiment is stabilising

4. Key Survey Highlights
• Franchisor positivity centred on stable and/or greater
demand, some improved profits and benefits from
government spending. On the challenging side,
franchisors noted finding suitable franchisees and staff,
increasing operating pricing pressure, legislative changes
and, general economic uncertainty.
• Franchisors identified top three challenges to franchise
system development in 2020 as 1) finding franchisees, 2)
increasing regulation and compliance, and 3) access to
finance.
• Franchisors identified improvement opportunities for the
year ahead covering areas such as, low interest rates, site
availability, technology, government policy changes, and
growth through new offerings

5. 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 23 franchisors
and 14 Service Providers.

6. 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 2020?
7. What will provide the greatest opportunity to
franchising development in 2020?
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)

7. The Results
Franchisor outlook for general business
conditions (net negative 30%) showed
slight improvement from the October 2019
of net negative 32%, whilst Service
Providers sentiment stayed the same at net
21%.

8. The Results
Franchisor sentiment for franchisor growth
prospects, showed improvement at net
17%, up from net 4%, bringing it into line
with January 2019 sentiment. Service
Providers’ net 21% also improved from net
7% in October.

9. The Results
Franchisor sentiment toward access to
financing worringly, also remained
negative, at a net negative 30%. Service
Providers confidence was less positive
dropping from 7% to a net negative 7%.

10. The Results
Franchisors sentiment toward access
to suitable franchisees has been seen
as the greatest challenge for some
time. This remains at net negative 30%
(previously net negative 60%). Service
Providers at net negative 7% (down
from net 7%) were more positive, on a
relative basis.

11. The Results
Franchisors continue to indicate their
outlook for access to suitable staff
remains a critical challenge at net
negative 36%. Service Provider
confidence met with that of
franchisors at a net negative 36%
(down from net negative 7%).

12. The Results
Franchisors, at net 9%, up from net 4%,
were slightly more positive this quarter
in their outlook for access to suitable
locations. Service Providers were more
positive at net 29% up from net 14% in
October.

13. The Results
Franchisors sentiment toward
future sales levels per franchisee
has been steadily increasing with
current view at a positive net 39%
(from net 24%). Service Providers
sentiment also increased to net
29% up from 14%.

14. The Results
Franchisee operating costs continue
to be a concerning area – with
franchisors recording a net negative
43%. Service providers were similarly
dismal, recording a net negative
57%.

15. The Results
On a more positive note, Franchisor
outlook toward franchisee
profitability levels recorded a net 0%,
up from net negative 12%. Service
Providers were improved from a net
negative 43% in October 2019 to a net
negative 21%.

16. The Results
GREATEST CHALLENGE TO FRANCHISE DEVELOPMENT
Key 2020 Challenges
 Finding franchisees/suitable franchisees
 Increasing regulation and compliance
 Access to finance

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

18. 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