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Franchising tops $20 billion turnover, 100,000 jobs
12 November 2012 - The contribution of the franchising sector to New Zealand’s economy has reached $20 billion , according to a new study by Massey University. Franchising New Zealand 2012 also estimates that the franchise sector employs 101,800 people.
The second biennial survey of the franchise sector was conducted by Massey University in collaboration with the Griffith university in Brisbane. It found that the franchise sector has shown resilience during difficult economic times, but there is scope for the industry to innovate. Dr Susan Flint-Hartle of Massey says that, on the whole, franchise businesses have been able to increase their levels of turnover, although there have been marginal decreases in size and profitability since the last survey in 2010.
'That is a reflection of the economy – the effect of a very high dollar, rising commodity prices, and the ongoing impact of the global financial crisis and the Canterbury earthquakes.'The survey estimates the turnover for the entire franchise sector at 'between $19.4 billion and $21.0 billion. This figure includes real estate franchises (commissions only) and hotels, but not vehicles ($8 billion) and fuel ($7 billion).
Dr Flint-Hartle gave an outline of the survey's major findings at a function in Auckland this evening. The full report will be made available tomorrow, and a detailed review of many of the findings will appear on this site.While the past two years has seen a net growth in the number of franchise systems in New Zealand, the survey estimates that there has been a decrease in the number of franchisee units within those systems, especially in the retail sector. Over half of survey respondents reported increased sales, but a quarter also said their overall profit margins had declined.