new zealand franchising confidence index | october 2014

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October 2014 Quarter Results FRANCHISING CONFIDENCE SLIGHTLY MODERATED

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October 2014 Quarter Results

FRANCHISING CONFIDENCE SLIGHTLY MODERATED

• 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

About Franchize Consultants

Key Survey Highlights

• Responding Franchisors continued an optimistic, though

slightly moderated outlook across many key growth

drivers. Service Providers were mainly reflective of this

sentiment

• The positivity reported by Franchisors towards general

business conditions is higher than other general business

confidence surveys (i.e. ANZ, and NZIER).

• Franchisors were sentiment toward franchisee profitability

prospects – arguably franchising’s most important key

performance indicator was down from the previous

quarter.

• Franchisors still remain positive about franchisor growth

prospects.

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 24 franchisors

and 12 Service Providers.

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?

Respondents indicate whether they expect the following aspects to be better, the sameor worse over the next 12 months (compared to the previous 12 months)

The Results

The latest results indicated continued positive franchisor (net 50%) sentiment toward general business conditions –Service Providers results were reflective of this and reported a net 42%. These results were higher than other business surveys including ANZ Business Outlook (27% in October) and NZIER (20% in September)

The Results

Franchisor sentiment for franchisor growth prospects decreased from net 63% in the previous quarter to 38% this quarter. Service Providers reported an increase to net 50% up from 27% in the previous quarter.

The Results

Franchisor sentiment toward accessing financing increased from to 13% to net 21% . Service Providers reported a marked increase from net 7% in the last quarter to 42% this quarter

The Results

Franchisor sentiment toward access to suitable franchisees decreased this quarter, from a net 17% to negative net 17% . Service Providers were more optimistic at a net 47%.

The Results

Confidence in access to suitable staff decreased slightly from negative net 7% to negative net 17%. Service Providers reported 0%.

The Results

Franchisor sentiment towards access to suitable locations decreased from negative net 8% to negative net 17%. Service Providers showed little change from the previous quarter at net 8%.

The Results

Franchisor sentiment towards franchisee sales levels remained elevated but slightly moderated at 63% down from 70% in the last quarter. Service Providers rose slightly from a previous net 40% to 50%.

The Results

Franchisors outlook for operating costs dropped this quarter, from a net 13% to negative net 38%. Service Providers reported a negative net 25%.

The Results

Franchisors sentiment toward future franchisee profitability was down from a net 53% to net 17% this quarter. Service Providers were reflective of this sentiment at a net 18%

More Information

www.franchisingconfidence.co.nz

Including:

• More detailed and complete results and analysis

• All charts and illustrations

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. [email protected]

• Web. www.franchisingconfidence.co.nz

• Web. www.franchize.co.nz