Welcome to the dynamic world of franchising. I continue to be impressed by the diverse and talented group of individuals involved in this sector. The onset of the Global Financial Crisis (GFC) did in many cases demonstrate the ability of the franchise sector to respond and adjust more quickly than some in the corporate world. I am sure these actions will continue to benefit the franchise community in the current economic climate.
Our legal framework
Franchising in New Zealand operates in an environment where there is no specific franchise legislation, but all businesses – including franchising – are governed by general commercial law and the many other laws relating to employee and consumer issues. Franchise systems that are members of the Association, however, choose to operate under voluntary Codes designed to encourage the best practice in franchising
The Association's Board is working to bring greater benefits to members and increase the value of membership. Perhaps the greatest value of your membership, however, is the networking opportunities with other members, sharing your experiences and strategies that will help your business not only to survive but thrive. Greater emphasis is being placed on education and we will continue to offer seminars, conferences and opportunities for members to increase their learning and information that will assist their businesses. The recent launch of the free pre-entry online course for prospective franchisees is a great example of this.
In the current environment
Franchisors need to practice greater diligence in franchisee selection, ensuring that they do not “over sell” and under deliver on promises. Any proposals need to be carefully presented to ensure the lending banks continue to see franchising as a viable proposition. Whilst all business ventures have a certain level of risk attached, franchisors have a responsibility to ensure they are not placing any potential franchisee at undue risk, either through a lack of suitability or insufficient equity.
Many of the successful and established franchise systems continue to target and experience network growth. In the aftermath of the GFC we are seeing a greater emphasis being placed on the innovation and improvement of systems, structures and internal efficiencies in order to drive overall business profitability and sustainability of both franchisors and their franchisees.
This continued focus on innovation and system improvement will play a key role in supporting and retaining new and existing franchisees through the next 12 – 18 months. Being a franchisee; running your own business, making the key decisions and being in charge of your own future is exceptionally challenging and rewarding - never more so than in today's economic environment.
Franchising around the world
At the recent meeting of the World Franchise Council, franchise associations from many nations reported continuing growth in franchising as a preferred method of doing business. Many countries also reported that their governments are now recognising the contribution that franchising makes to their economic growth and employment levels and they have accepted that the success of their franchising sector is integral to the recovery from the current recession.
Be part of the self-regulation community
The Board is committed to increasing awareness of the benefits of being a member, promoting best practice in franchising and prior disclosure to prospective franchisees. I would encourage all non-members to seriously consider the advantages of membership and we welcome your interest.