26 Jul 2017

Would you like a franchise with that?

7:39 am on 26 July 2017

There's a growing appetite in New Zealand to be a franchise business owner, as the sector grows in size and value.

McDonalds says it employs nearly 10,000 people around the country and for a lot of them, in South Auckland, it gave them their first job.

Fast-food outlets such as McDonald's as well as shops and businesses in the accommodation and construction sectors tend to be franchised Photo: 123RF

A Massey University study, done in collaboration with the Griffith Business School and sponsored by the Franchise Association of New Zealand, estimates the sector's turnover has gone from $31 billion in 2012 to $46bn this year.

The report attributes the increase to record immigration gains, and New Zealand's political stability and strong economic performance.

Franchises include fast-food outlets and retail shops, along with businesses in the accommodation and construction sectors. Auckland, Wellington and some South Island areas are popular locations.

Over the past five years, the report estimated, just under three quarters of the 631 brands were homegrown, with about 37,000 franchises in the country employing more than 124,000 people.

Report author Susan Flint-Hartle, from Massey University's Business School, said a lot of those people were now in full-time positions.

"Sixty percent of them are in full-time employment, which shows that there is more confidence and that these brands are growing bigger," she added.

But Dr Flint-Hartle said the rate of growth may near a peak in the coming years.

"Some of the franchise brands may consolidate and get bigger internally rather than the actual sector getting bigger," she said.

Dr Flint-Hartle said a drawcard for people considering franchising was the ability to be self-employed.

She said the sector was also attracting new migrants who had the cash to spend, and the number of Māori owners was also on the rise.