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Avoid failure - research your Franchise for Sale opportunity

Avoid failure - research your Franchise for Sale opportunity

New Zealand is built on small businesses, and a large and growing part of that is franchising. The 2010 Franchising NZ Survey found the sector employs around 80,400 people in 450 franchise systems over 23,600 outlets

Franchises can be a nationally or internationally known brand, new or well established. While most franchises provide a well tested and proven business system, they don’t come with a guarantee.

For a franchise to work it must have a market, and a unique proposition that sets it apart from the others. This coupled with great systems, presence, people, the right environment and leadership will see it thrive.

Unfortunately the landscape does have its causalities with numerous failed cases reported. A few years back Otago and Southland Signature Homes were placed in receivership touting tough times in the construction sector.

In 2013, the HRV franchise in Nelson and Marlborough went under, blaming "adverse media coverage" for its downfall.

And more recently, the New Zealand head office of Nando’s fast food franchise has gone into receivership. This follows months of frustration from disgruntled franchisees. Failed franchisees pointed to a lack of national marketing, being required to purchase ingredients that could be sourced more cheaply, and money issues in a highly competitive fast food market. Fortunately, most of Nando’s franchises continue to operate.

Stories continually hit the media; suggesting some buyers have signed up without checking the figures, some have neglected to talk to other franchisors about issues or strained relationships, others their skills don’t match or the systems don’t perform as indicated. It all comes down to doing your homework before buying a franchise.

But how do you find the right New Zealand franchise for sale opportunity?

Your best option is one that you can get enthusiastic about, and which matches your expectations, interests, skills, and your lifestyle commitments. Search for franchise New Zealand opportunities on sites like, for one that best suits your needs and evaluate more than one opportunity in the industry you are considering. Make contact with various franchisors and compare them and their systems. Choose one that meets your criteria.

Go online: There is a wealth of information out there, especially online. Firstly check out the company’s website. Look at it as a window into the company’s products and business model. Secondly; visit key Industry and News websites like the Franchise Association of New Zealand. Check out blogs – find out what others say. Google the company and it’s principles to check out the feedback in reviews and on blogs. Disgruntled clients, franchisees and ex-franchisees will often vent their frustrations online.

Talk to existing Franchisees: Ask the franchisor if you can speak to some customers, and most importantly to talk to some existing franchisees. Find out how successful it is, any problems or shortcomings, and get to understand what you need to do to be successful.

Research the Franchisor: Do they have they a good reputation in the industry and with other franchises? Take any concerns or questions you have up with the franchisor. There are two sides to every story. If it doesn’t feel right then maybe it isn’t.

Check with the Professionals: Choose a lawyer, accountant who are experienced with franchising. They will know what to look for, and you will benefit from their experience, history and contacts.

Buying a franchise can be a great investment but it is necessary to do your homework. Find out more about New Zealand Franchises for Sale on


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