Franchisors Report Record Confidence
Franchisors Report Record Confidence in General Business Conditions
Franchize
Consultants (NZ) Ltd
Media
Release
KEY HIGHLIGHTS
• Responding Franchisors and Service Providers
sentiment is extremely positive and remains elevated across
many key growth drivers.
• Franchisors sentiment
toward general business conditions is high and comparable to
other general business confidence surveys (i.e. ANZ, BNZ and
NZIER).
• Franchisors remain positive about
franchisee profitability levels – arguably franchising’s
most important key performance indicator.
•
Franchisors sentiment for franchisor growth also remained
very high, however sentiment for both access to suitable
staff and locations showed a decreased lack of
confidence.
The Franchize Consultants’ January 2014 Franchising Confidence Index demonstrates a further increase in a general trend towards improved confidence across overall sector growth drivers.
•
The latest results indicated very positive
franchisor (net 79%) and Service Provider (net 87%)
sentiment toward general business conditions. These
results were shared by the latest results of other more
general business surveys including the BNZ (net 68% in
January), ANZ Business Outlook (64% in December) and NZIER
(52% in December) business confidence surveys.
•
Both franchisors (net 62%) and Service Providers
(net 93%) were positive about prospects for franchisor
growth. This is a marked increase from the already
positive results in the previous quarter of net 50% and net
79%, respectively.
• Franchisors
sentiment toward access to financing dropped from a positive
9% to 0%, Service Providers are slightly more
positive than franchisors at a net 14%.
•
Franchisor sentiment toward access to suitable
franchisees increased this quarter, from negative net 13%,
to a neutral 0%. Service Providers, meanwhile,
were notably more optimistic at a net 47%.
•
Confidence in access to suitable staff
decreased. Franchisor sentiment dropped from net 9%
to net 3%. Service Providers also decreased from net 29% to
13%.
• Franchisor sentiment towards
access to suitable locations dropped from net 19% to 0%.
Service Providers were more positive at net
40%.
• Franchisor and Service
Provider sentiment towards future franchisee sales levels
remained at a high level. Franchisors’ at a net
65%. Service Providers up to a net 80%, up from net 50% in
the last quarter.
• Franchisor
confidence in franchisee operating costs remained negative
during this quarter at a net negative 18%. Service
Provider sentiment was a net negative 40%, decreasing from
negative net 7% from the last quarter.
•
Sentiment toward future franchisee profitability
remained positive overall. Franchisors reported a
net 19%, and Service Providers a net 36%.
Overall,
Franchize Consultants’ Franchising Confidence Index in
January 2014 demonstrated a further increase of the
generally high levels of sentiment recorded in the previous
quarter. This positive sentiment was shared by other recent
general business confidence surveys and is reflective of a
generally improved outlook and forecast for the economy,
with business confidence levels at a 20 year
high.
Franchisors continue to maintain a very positive
outlook for general business conditions, sales levels per
franchisee, with franchisor growth prospects nearly at
record levels for this Index. Key franchisor identified
challenges for growth in 2014 included finding franchisees,
potential economic factors, franchisee complacency and
finding suitable locations and staff.
The sentiment
contained within the results indicate 2014 could be a very
strong year for franchising in New Zealand.
For a copy of
the full report visit: www.franchisingconfidence.co.nz