New Zealand Franchising Confidence Index | January 2015

January 2015 Quarter Results

FRANCHISORS REPORT INCREASED CONFIDENCE IN 2015

• 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 and Service Providers report

improved optimism across many key growth drivers.

• Franchisors sentiment toward general business conditions

is high

• Franchisors remain positive about franchisee profitability

prospects – arguably franchising’s most important key

performance indicator.

• Franchisors forecasts indicated a negative outlook for the

availability of suitable staff.

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 29 franchisors

and 18 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?

6. What do you see as the greatest challenge to franchise development in 2015?

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 positive franchisor (net 69%) and Service Provider (net 94%) sentiment toward general business conditions. These elevated results topped the latest results of other more general business surveys including the ANZ Business Outlook (30% in December) and NZIER (21% in January) business confidence surveys.

The Results

Franchisor growth also remained high (net 57%), up from the previous quarter. Service Providers again provided significantly positive results (net 80%), up from a net 50%.

The Results

Franchisors sentiment toward accessing financing increased from 21% to 41% ,Service Providers were even more positive at a net 88%

The Results

Franchisor sentiment toward access to suitable franchisees improved this quarter, from negative net 17% to a positive net 17%. Service Providers were more optimistic at a net 44%.

The Results

Franchisor confidence in access to suitable staff dropped slightly, to a net negative 18%. Service Providers were a little more positive at 6%.

The Results

Franchisor sentiment towards access to suitable locations increased from negative net 17% to 12%. Service Providers were more positive at net 27%.

The Results

Franchisor sentiment towards franchisee sales remained at an elevated level, Franchisors at a net 62% and Service Providers increased to net 80%.

The Results

Franchisor confidence in operating costs remained lower, but were up from the previous quarter. Franchisors reporting a negative net 3% and Service Providers reporting 6%

The Results

Sentiment toward future franchisee profitability was positive. Franchisors reported an increase from 17% to 38% and Service Providers a net 40%, up from net 18% in the last quarter.

The Results

GREATEST CHALLENGE TO FRANCHISE DEVELOPMENT

Key 2015 Challenges

Finding franchisees Competition Finding staff Franchisee investment

& ongoing cost containment

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