With more franchisors per capita than any other country in the world, New Zealand is clearly a country of people who know the benefits of doing business in this kind of way.
Therefore it is unsurprising to see that this sector has seen massive growth over the last decade, with a 2017 survey showing there to be around 630 franchise systems in the country.
An Important Part of The Economy
Considering that there are less than five million people in the county, this number demonstrates a society that embraces the idea of franchising.
The survey quoted above was conducted with New Zealand’s largest franchise membership body, the Franchise Association of New Zealand, and it also found the following:
- It is estimated that the franchise industry contributes close to $28bn to the New Zealand economy
- In 2017, franchises were employing around 125,000 people in New Zealand.
- On average, franchisees were remaining in systems for eight years
- Over 70 percent of franchises operating within the country were founded in New Zealand.
- 40 percent of franchises are operating with less than 20 units, while 27 percent have 50 units or more.
Franchise Legislation
Although there is no franchise specific legislation in New Zealand, members of the Franchise Association of New Zealand, are required to comply with the Code of Practice and the Code of Ethics of the Association.
However, membership of this organisation is voluntary.
Although there is no Franchise specific law, there are several pieces of legislation which are applicable to those conducting business as a franchise.
This is not an exhaustive list, but franchisees and franchisors should be aware of the following:
- Commerce Act 1986.
- Commerce (Cartels and other Matters) Amendment Act 2017.
- Companies Act 1993.
- Consumer Guarantees Act 1993.
- Contracts and Commercial Law Act 2017.
- Defamation Act 1992.
- Employment Relations Act 2000.
- Fair Trading Act 1986.
- Health and Safety at Work Act 2015.
- Human Rights Act 1993.
- Personal Property Securities Act 1999.
Industries
Several international food and beverage franchises have carved out successful parts of the market, with the likes of McDonalds, Burger King and Dominos all household names, with the first two being established within the country for over 30 years.
New Zealand's largest franchise domestically is a home service franchise, called Green Acres. In general, the home service industry has several franchises that have proved successful within the country.
Going forward, it appears that mobile and commercial service franchises are proving popular within the New Zealand market.
The Franchisor's View
The Franchising Confidence Index is New Zealand’s quarterly survey of franchising business confidence. In January of 2020 it showed franchisors "had a strong positive outlook for sales levels per franchisee" and "their own growth prospects".
Franchisors also said that there most greatest challenge to franchising development is finding suitable franchisees, which coincidentally is an area that Franchise Direct has over 20 years' experience in.
A Global Mark
New Zealand has a population of under five million and Auckland is its biggest city, with a population of around one and a half million. Despite its relatively small size, NZ has already made quite a mark in the world of franchising.
Fastway Couriers is the worlds’ largest courier franchise and they started in the Hawkes Bay region of the country, while there are plenty of other examples of New Zealand franchises making it globally, such as Esquires Coffee Houses, BurgerFuel, Sherpa Kids etc.
If you would like to be part of New Zealand’s next great franchise, check out the list of opportunities we have available here.