This is a best prospect industry sector for this country. Includes a market overview and some limited trade data as available through peer-reviewed sources.

Overview

New Zealanders’ preference for self-employment builds a solid foundation for franchising by alleviating the risks associated with a start-up business.   Per capita, New Zealand has a high uptake of franchise operations; a report in late 2017 stated that the country has the highest number of franchise units, per capita, in the world.

Franchising continues to attract the interest of new investors for American brands which are well regarded. The reasons for  strong performance  are:

  • Increased levels of business activity across the economy;

  • Increased and sustained levels of business confidence;

  • Liquid capital available for investment in franchising because of low interest rates and strong    residential property values;

  • Higher profitability and sustainability of revenues attributed to the
    franchising sector.

New Zealand has no franchise-specific laws.  The sector relies on generic business law (e.g. contract law, intellectual property law, and fair-trading/ consumer protection laws) and self-regulation.  This is done through the Franchise Association of New Zealand (FANZ) – a voluntary organization that requires members to adhere to a Code of Practice and Code of Ethics.  In June 2009, a government review of the franchising sector decided there was no need for the introduction of franchise-specific regulation.      
    
The key challenge for franchisors exploring the New Zealand market is a lack of access to deep pools of capital. Most American franchisors offer potential franchisees (all other criteria being met) some flexibility in pricing, fees etc. due to this constraint.

Accurate statistics for the overall size of the market, local vs. international franchises, and related data are unavailable. The summary data provided above is considered robust and reliable, according to industry experts. Some high-level industry metrics are:

  • Sector-wide turnover in New Zealand: US$20 billion in 2017. This represents a growth rate of over 65% in 5 years, with 185 new brands introduced in that same period.

  • Total number of brands operating in New Zealand (end-2017): 631, of which around 450 are of local origin.

  • 125,000 people are employed in the franchise sector in New Zealand.

  • Franchising contributes about 11% of NZ’s GDP.

Leading Sub-Sectors

  • Accommodation / healthy dining / quick service restaurants

  • Retail Trade

  • Consumer technology services & consumables supplies

  • Business services

  • Education/ tutoring services and content

  • Home maintenance and home-based services

  • Elder care

Opportunities

There are no large trade events in this sector held in New Zealand. It is advisable to discuss the market potential for a specific franchise with a member of the United States Commercial Service before engaging in formal discussions with a local partner or advisor. 

Web Resources

Franchising New Zealand
Franchise Association of New Zealand (FANZ):

Prepared by the International Trade Administration. With its network of more than 100 offices across the United States and in more than 75 markets, the International Trade Administration of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.