The 2001 survey conducted by the Franchise Association of New Zealand through the National Bank of New Zealand Limited (which is owned by Lloyds Bank of the United Kingdom) has just published its findings. The results are staggering, for they show a very high rate of increase in franchising in New Zealand.

Key results are as follows:

  • The total number of systems operating in New Zealand is estimated to be about 300.

  • Franchising in New Zealand can be estimated to account for NZ$10 billion annual turnover.

  • The number of people working within franchising is estimated to be 70,000.

  • The number of systems, outlets and those employed in them exhibit a 20% increase per year.

  • Twenty percent of the systems franchised started within the last three years.

  • The largest industry groupings have moved from the retail (food and non-food) sector (34%) to services (56%). Services are made up of: property and business (16%); construction and trade (14%); personal and other (7%); finance and insurance (5%); education (5%); cultural and recreational (4%); health and community services (3%); and accommodation, cafes and restaurants (2%).

  • Seventy-seven percent of the operations originate in New Zealand.

  • The median total start-up cost is NZ$125,000.

  • The use of support systems for the franchisees is increasing. In particular, the use of the Internet is becoming widespread, with 84% of systems having web sites.

  • The failure rate for franchise units is less than 6% over a three-year period.

The climate for franchising in New Zealand is very positive. There are certainly more systems coming in from overseas, especially Australia, the United Kingdom and the United States. New Zealand is the most deregulated country in the world to conduct small to medium-sized business and it is very easy to enter. New Zealand has double taxation treaties with many countries, which makes the repatriation of income straightforward with tax credits available.

For further information on this topic please contact Stewart Germann at Stewart Germann Law Office by telephone (+64 9 308 9925) or by fax (+64 9 308 9922) or by e-mail ([email protected]).

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