Franchising Sentiment Mostly Positive
Franchize Consultants (NZ)
Ltd
Media
Release
Franchising Sentiment Mostly
Positive
KEY HIGHLIGHTS
•
Responding Franchisors sentiment is still positive and
remains elevated across many key growth drivers, however
Service Providers were less positive generally and markedly
in some areas.
• Franchisors sentiment toward
general business conditions tops other general business
confidence surveys (i.e. ANZ and NZIER).
•
Franchisors remain positive about franchisee profitability
levels – arguably franchising’s most important key
performance indicator.
• Franchisors sentiment
for franchisor growth increased from the last quarter.
The Franchize Consultants’ July 2014 Franchising Confidence Index demonstrates mixed results from reporting Franchisors and Service Providers.
• The latest
results indicated positive franchisor (net 53%) toward
general business conditions. Service Provider (net 27%)
sentiment was less positive, and was reflective of
other general business surveys including ANZ Business
Outlook (40% in July) and NZIER (32% in June) business
confidence surveys.
• Franchisors (net
63%) remain positive about prospects for franchisor
growth. However, Service Providers have reported a
decrease in results from 69% in the previous quarter to 27%
this quarter.
• Franchisors sentiment
toward access to financing increased slightly from 3% to
13%, Service Providers are slightly less positive
than franchisors at a net 7%.
•
Franchisor sentiment toward access to suitable
franchisees increased this quarter, from negative net 3% to
17%. Service Providers also showed more optimism
than previously at a net 47%.
•
Confidence in access to suitable staff
increased. Franchisors sentiment increased slightly
from negative net 19% to negative net 7%, and Service
Providers matched this also reporting a negative net
7%.
• Franchisor sentiment towards
access to suitable locations decreased from 7% to negative
net 8%. Service Providers reported a net 7%.
•
Franchisor sentiment towards future franchisee sales
levels remained at an elevated level at a net 70%.
Service Providers dropped from 85% last quarter to net 40%
this quarter.
• Franchisor confidence
in franchisee operating costs increased this quarter to net
13%. from a negative net 6% last quarter. Service
Provider sentiment was a negative net 33%.
•
Franchisor sentiment toward future franchisee
profitability remained positive, with Franchisors
reporting a net 53%.
Overall, Franchize Consultants’
Franchising Confidence Index in July 2014 demonstrated mixed
results from reporting Franchisees and Service Providers.
The subdued sentiment from Service Providers is shared by
other recent general business surveys.
Franchisors
continue to maintain an optimistic outlook for general
business conditions, sales levels per franchisee and
franchisor growth prospects. We were also encouraged to
record a slight increase in positivity for franchisee
profitability, arguably a franchise system’s most
important key performance indicator. In contrast, however,
it is interesting to note a decline in the perceived
availability of suitable locations and staff as other
dimensions recover.
For a copy of the full report visit:
www.franchisingconfidence.co.nz
Franchising
Confidence Index Background
Franchize
Consultants’ Franchising Confidence Index is a quarterly
survey of circa 400 New Zealand franchisors and 100
specialist service providers (e.g., consultants, banks,
accountants, lawyers and publishers) to the franchising
community.
The Franchising Confidence Index represents
confidence in key measures critical to the success of
franchising in this country by reporting attitudes toward
general business conditions, as well as key franchising
growth determinants including access to capital, suitable
potential franchisees, staff and locations. The Franchising
Confidence Index also covers franchising health attributes
and outcomes by exploring franchisee sales, operating costs
and profitability, and franchise system growth
prospects.
The data and analysis presented represents the
views of 30 franchisors and 15 Service Providers collected
between Monday 28th July and Friday 1st August 2014.
Findings from both groups are reported separately.
Respondents were asked whether they expected conditions to
be ‘better,’ ‘same’ or ‘worse.’ ‘Net’
confidence is the difference between those reporting
‘better’ and
‘worse.’