Results from the latest Franchize Consultants Franchising Confidence Index. Franchize Consultants are franchising and licensing consulting specialists, focusing on: 1. Helping companies franchise a business 2. Helping established chains improve performance 3. Building franchise and chain management capability

1. January 2018 Quarter Results
FRANCHISING STARTS 2018 WITH SUBDUED ECONOMIC OUTLOOK

2. • 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

3. Key Survey Highlights
• Franchisors sentiment toward general business conditions
remains neutral
• Franchisors sentiment for franchisee profitability, arguably
franchising’s most important key performance indicator,
indicates improved confidence
• Responding Franchisors and Service Providers both
report improved sentiment for access to finance
• Franchisors and Service Providers forecasts indicated a
negative outlook for franchisee operating costs.

4. 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 32 franchisors
and 14 Service Providers.

5. 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 2018?
7. What will provide the greatest opportunity to
franchising development in 2018?
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)

6. The Results
The latest results indicated neutral
franchisor (net 3%) and Service Provider
(net 0%) sentiment toward general
business conditions.

7. The Results
Franchisor growth prospects dipped slightly
(net 23%), down 5% from the previous
quarter. Service Providers reported similar
sentiment movement at net 0%.

8. The Results
Franchisors sentiment toward accessing
financing was neutral at net 0%, up from
net negative 13%. Service Providers were
similar at a net 7%, up from net negative
7%.

9. The Results
Franchisor sentiment toward access to
suitable franchisees continues to
remain the key challenge at a net
negative 28% this quarter, from net
negative 20% previously. Service
Providers were neutral at net 7%.

10. The Results
Franchisor confidence in access to
suitable staff dropped slightly, to a
net negative 16%, to remain at low
levels, generally. Service Providers
reported a similar result at a net 0%.

11. The Results
Franchisors and Service Providers were
slightly more subdued in their
sentiment towards access to suitable
locations this quarter, reporting net 7%
and net 14%, respectively.

12. The Results
Franchisors and Service Providers
were similar in their sentiment
towards franchisee sales levels,
both dipping slightly. Franchisors
reported a net 28% and Service
Providers 7%.

13. The Results
The greatest challenge for both
Franchisors and Service Providers is
Operating Costs per Franchisee
with both reporting declines to a
net negative 29%, and net negative
50%, respectively.

14. The Results
Franchisors, whilst still subdued,
reported slightly more positively on
Franchisee Profitability Levels, at net
9% up from net 7%. Service Providers
were less positive at a net negative
39%, down from a net negative 7%.

15. The Results
GREATEST CHALLENGE TO FRANCHISE DEVELOPMENT
Key 2018 Challenges
 Finding franchisees
 Increasing compliance and other legal
requirements
 Franchisee investment & ongoing cost
containment

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

17. 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