About the Franchising Confidence Index
What is the Franchising Confidence Index?
The Franchising Confidence Index (FCI) is New Zealand’s annual survey of confidence specific to franchising businesses.
The FCI reports on franchisor and specialist service-provider attitudes toward general business conditions, as well as key franchisor growth determinants including access to capital, suitable potential franchisees, staff and locations.
The FCI also reports on franchising health attributes by exploring franchisee sales, operating costs and profitability, and franchise systems growth prospects.
Why have a Franchising Confidence Index?
Franchising commands its own confidence index for at least two reasons. First, franchising is a substantial and growing domain of business. Franchising has grown considerably over the last 30 years, as the organisation form has permeated both countries and industry sectors. In New Zealand, as for other countries, franchising accounts for an increasing proportion of all retail and service sector sales. Similarly, franchising has had an unquestionably impact on many countries economies and is widely acclaimed for its contribution to GDP, organisational efficiency, job creation and workforce training.
The impact of franchising on the New Zealand economy is significant, although difficult to quantify (the last franchise survey was made in 2021). Extrapolated figures from past franchise surveys have suggested there are more than 590 active franchise systems, comprising 32,000+ outlets, generating a level of turnover that may top $36 billion.
Second, franchising is a distinct form of organisation with unique characteristics and associated challenges. Given this, and the importance of the sector overall, it is clear the Franchising Confidence Index provides information of value to all key franchising community stakeholders – which includes franchisors, franchisees, suppliers, customers, service providers, and government.
Who Operates the FCI
The Franchising Confidence Index, is founded, designed and operated by Franchize Consultants, New Zealand specialists in franchising and licensing networking development. Founded in 1989, Franchize Consultants have a long and supporting association with New Zealand franchising.
Methodology
The Franchising Confidence Index measures and compares New Zealand franchisor and service provider (bank, accounting, legal, consulting, publishing etc) attitudes toward key franchising success determinants and outcomes.
A confidential email survey is administered to franchisors and key franchising service providers on an annual basis, soliciting attitudes toward the following variables:
- General business conditions
- Access to financing for new franchisees
- Access to suitable potential franchisees
- Availability of suitable staff
- Availability of suitable locations
- Sales levels per franchisee
- Operating costs per franchisee
- Franchisee profitability levels, and
- Franchisor growth prospects
Respondents are requested to indicate whether they expect the above aspects to be better, the same or worse in the next 12 months.
A score is attributed to each response: Better (+100) and Worse (-100). The Franchising Confidence Index is determined by calculating the average score for each question.