According to Robyn Pickerill, the most common misconception about franchisors in New Zealand is that they are huge, wealthy offshore companies that suck all the profits elsewhere. As CEO of the Franchise Association of New Zealand (FANZ), she knows this not to be true and said they are primarily local entrepreneurs that have taken huge risks and personal sacrifices to develop businesses. She considers Franchises to be a great opportunity for Kiwis to explore new lifestyles and businesses.
A total of 70 percent of franchises in New Zealand were founded here, and a further 21 percent are the Master Franchisee of an international brand. Meaning they have ownership rights to run the franchise in the country. A much smaller seven percent are subsidiaries of a global brand - even though the brand name is internationally recognised, the business is still local, puts thousands of dollars back into local communities, and provides many employment opportunities.
Currently, the franchising business formant contributes $36.8 billion to the New Zealand economy, equivalent to 12 percent of the country’s GDP.
The past year has created several challenges for the FANZ and its members, but Pickerill believes uncertainty would be number one. The lockdowns (although they seem like so long ago now) and border closures put incredible strains on businesses. Then, there are also uncertainties around the supply chain and labour. The international labour force has still not fully recovered, and this is an issue, particularly for businesses in the hospitality sector. The CEO has seen businesses reduce hours and not provide full services to customers.
2023 also looks to be entrenched with challenges; employee numbers will remain a huge problem unless immigration restrictions change. The supply chain will also be an issue for businesses that rely on products from China. Inflation will impact all areas of businesses, and Pickerill said these costs must be passed on. Customers are tightening their wallets, and it may become harder to secure lines of finance.
It is not all negative. Pickerill’s highlight for 2022 was seeing the resilience of franchises despite all the challenges. It is a testament to the franchising model and the system's support. FANZ is particularly proud of its members that went above and beyond to support one another.
“Franchisees are in business for themselves, but not by themselves.”
Another highlight was the 2022 Westpac New Zealand Franchise Awards. Pickerill said it was great to see two personal beauty businesses, from an industry hugely impacted by Covid restrictions, reign supreme. Rodney Wayne took out Westpac Franchise System of the Year, and Krista Coningham, with Caci Blenheim, won Westpac Franchisee of the Year. The awards are judged by an external panel of business and franchise experts that look for sound systems and strategies that lead to sustainable operations and satisfied franchisees and customers. They look for excellence.
The most common question businesses have for the FANZ is if a franchise is a member of their association. Research from Franchize Consultants and Franchise New Zealand media highlighted that 76 percent of prospective franchisees think it is essential that their chosen franchise system is a member of the FANZ. A further 67 percent believed it was important for their advisors to be members.
Pickerill’s key advice for entrepreneurs either looking at franchising their own business or becoming a franchisee is to do the research, look at all the options available, get advice, and understand the costs, rewards and exit strategies. The FANZ is available for any questions or guidance.
“Never skimp on advice from lawyers and accountants. Understand what you are buying. There are so many options, so don’t rush your decision-making. The FANZ website also has a marvellous online training course which is free and covers all the basics of what you need to know and understand when buying a franchise.”
After holding her role since 2016, Pickerill said that working with franchisors is incredibly rewarding. Doing her part in small businesses' success, seeing them develop and grow while contributing to local communities and economies means the world.
For more information on the association, visit www.franchiseassociation.org.nz.
