The general outlook from franchisors and service providers is that the franchise sector in New Zealand is slowly improving, though conditions remain challenging.

According to the Franchize Consultants July 2012 Franchising Confidence Index, there are mixed results recorded across the industry.

Those surveyed reported a decrease in optimism in regard to general business conditions, access to financing and to suitable franchisees, franchisee sales and profitability levels.

However there is improved sentiment for availability of suitable locations and staff, and franchisor growth prospects.

But service providers proved more optimistic than franchisors when it came to future franchisee operating costs. 

This latest report included a special focus on bank funding for franchisees and concluded that solid franchisee propositions could still be funded. However there was a slight decrease in confidence from franchisor respondents in relation to ease of access.

Concluding remarks to the report included:  “Despite some of the positivity in response and comments it is clear that substantial challenges to profitability remain, as indeed they do for other forms of organisation.

“Many are experiencing pricing pressure, many sectors remain competitive, and many input costs continued to rise. Combined, these and other factors pressure profitability at all levels.”

Image: ftseglobalmarkets.com