July 2014 Quarter Results

FRANCHISING SENTIMENT MOSTLY POSITIVE

• Franchize Consultants is the first point of contact for

companies considering franchising their business

• Franchize Consultants helps established franchised

(and other network format) chains review and improve

performance for both franchisors and franchisees

• Franchize Consultants conducts specialist research for

franchising insight and practical application

• Franchize Consultants builds franchisor executive and

franchisee capability and performance through focused

training and education programmes

About Franchize Consultants

Key Survey Highlights

• Responding Franchisors continued an optimistic outlook

across many key growth drivers, however Service

Providers were less positive generally.

• The positivity reported by Franchisors towards general

business conditions tops other general business

confidence surveys (i.e. ANZ, and NZIER).

• Franchisors remain positive about franchisee profitability

prospects – arguably franchising’s most important key

performance indicator.

• Franchisors also remain positive about franchisor growth

prospects.

Background

• Quarterly survey of more than 400 New Zealand

franchisors and 100 specialist Service Providers (e.g.

consultants, banks, accountants, lawyers and

publishers) to the franchising community.

• Explores confidence in key measures critical to the

success of franchising, including the wider

environment, growth determinants, and franchising

health attributes and franchise system growth

prospects.

• This survey represents the views of 30 franchisors

and 15 Service Providers.

The Focus

GENERAL QUESTION AREAS

1. General business conditions

2. Franchisor growth prospects

3. Franchising growth drivers• Access to capital• Access to suitable franchisees• Access to suitable locations • Access to suitable staff

4. Franchisee growth & profitability prospects• Franchisee sales levels• Franchisee operating costs• Franchisee profitability

5. How are things looking for franchisors and Franchisees in their respective sectors?

Respondents indicate whether they expect the following aspects to be better, the sameor worse over the next 12 months (compared to the previous 12 months)

The Results

The latest results indicated continued positive franchisor (net 53%) sentiment toward general business conditions –Service Providers did not match this sentiment and reported a net 27%. Service Provider results were reflective of other more general business surveys including the ANZ Business Outlook (40% in May) and NZIER (32% in June) business confidence surveys.

The Results

Franchisor sentiment for franchisor growth prospects increased from net 41% in the previous quarter to 63% this quarter. Service Providers did not match this sentiment and reported a net 27% down from 69% in the previous quarter.

The Results

Franchisor sentiment toward accessing financing increased from to 3% to net 13% , however Service Providers decreased to a net 7% from 38% in the last quarter.

The Results

Franchisor sentiment toward access to suitable franchisees increased this quarter, from a negative net 3% to net 17% . Service Providers were also more optimistic than previously at a net 47%.

The Results

Confidence in access to suitable staff increased slightly from negative net 19% to negative net 7%. Service Providers matched this sentiment.

The Results

Franchisor sentiment towards access to suitable locations decreased from 7% to negative net 8%. Service Providers showed little change from the previous quarter at net 7%.

The Results

Franchisor and Service Provider sentiment towards franchisee sales levels showed mixed results with Franchisees rising to net 70%, but Service Providers dropping to net 40% from 85% in the last quarter.

The Results

The outlook for operating costs this quarter also provided mixed results, with Franchisors at a net 13% and Service Providers at a negative net 33%.

The Results

Franchisors sentiment toward future franchisee profitability was positive at a net 53%. Service Providers were less positive at a net 7%, a decrease from 31% in the last quarter.

More Information

www.franchisingconfidence.co.nz

Including:

• More detailed and complete results and analysis

• All charts and illustrations

Franchize Consultants

• The Franchising Confidence Index, is founded, designed

and operated by Franchize Consultants, New Zealand

specialists in franchising and licensing network

development. Founded in 1989, Franchize Consultants

have a long and supporting association with New Zealand

franchising.

• For further information contact Dr Callum Floyd

• Ph. (09) 523 3858

• Mob. 021 669 519

• Email. callum@franchize.co.nz

• Web. www.franchisingconfidence.co.nz

• Web. www.franchize.co.nz