Franchising Sentiment Remains Positive

For a full copy of the April 2015 report click here 

KEY HIGHLIGHTS

• Responding Franchisors and Service Providers sentiment remains positive across many key growth drivers

• Franchisors sentiment toward general business conditions remains elevated

• Franchisors remain positive about franchisee profitability levels – arguably franchising’s most important key performance indicator

• Franchisors sentiment for franchisor growth prospects increased slightly, however sentiment for sales level per franchisee, access to suitable staff and operating costs remained at lower levels.

The Franchize Consultants’ April 2015 Franchising Confidence Index demonstrates a continued positive outlook across overall sector growth drivers.

• The latest results indicated positive franchisor (net 41%) sentiment toward general business conditions. These results were higher than the latest results of other more general business surveys including the ANZ Business Outlook (35.8% in March) and NZIER (20% in March) business confidence surveys.
• Both franchisors (net 59%) and Service Providers (net 27%) remain positive about prospects for franchisor growth. Franchisor results increased slightly from 57% in the previous quarter.
• Franchisors sentiment toward access to financing decreased from a 41% to 28%, Service Providers are slightly more positive than franchisors at a net 36%.
• Franchisor sentiment toward access to suitable franchisees remained the same this quarter, at a net 17%. Service Providers, meanwhile, were more optimistic at a net 55%.
• Franchisor confidence in access to suitable staff increased slightly from negative net 18% to negative net 7%. Service Providers reported 0%.
• Franchisor sentiment towards access to suitable locations decreased from net 12% to net 7%. Service Providers were reflective of this reporting net 9%.

• Franchisor and Service Provider sentiment towards future franchisee sales levels remained elevated. Franchisors at a net 38%. Service Providers reported a net 45%.
• Franchisor confidence in franchisee operating costs remained negative during this quarter at a net negative 10%. Service Provider sentiment was a negative net 9%, also decreasing from net 6% in the previous quarter.
• Sentiment toward future franchisee profitability remained positive and increased from last quarter. Franchisors reported a net 41%, and Service Providers a net 55%.

Overall, Franchize Consultants’ Franchising Confidence Index in April 2015 demonstrates a continued positive outlook, but more subdued than the previous quarter.

Franchisors continue to maintain a positive outlook for general business conditions, sales levels per franchisee, with franchisor growth prospects also showing a slight increase.  We were also encouraged to record a continued positive outlook for franchisee profitability, arguably a franchise system’s most important key performance indicator.

Key franchisor identified challenges included the availability of suitable staff, and operating costs.
For a copy of the full report visit:  [Full Report]

Thinking of franchising your business, or improving a franchise system? Franchize Consultants are New Zealand's leading franchising and licensing consultants.