7 Dec 2021

Franchise businesses see growth despite pandemic

4:31 pm on 7 December 2021

Franchise businesses have seen large growth in annual turnover despite a constrained operating environment associated with the ongoing pandemic.

Franchise

Photo: 123RF

The Franchising New Zealand 2021 report indicates the annual turnover of business format franchises grew by $9.2 billion in the past four years to $36.8b, from $27.6b in 2017, excluding sales from motor vehicle and fuel retail.

The report's author, Massey Business School professor Jonathan Elms, said the survey of 590 franchise businesses was taken during a period of continued border closures and business restrictions that limited trading opportunities and generated operating and economic uncertainty.

He said franchise employment had also risen at a rate of around 8000 a year since 2017.

"Franchise businesses are employing more staff than in 2017, which again speaks to the resiliency of the business model. At present it's estimated there are 156,820 people employed in a franchise operation in New Zealand," he said.

Franchise Association chief executive Robyn Pickerill said Covid-19 had resulted in disruptions to trading, greater levels of stress and mental health concerns, as well as adjusted hours of operation.

However, she said franchise operators were adapting to a lack of suitable skilled staff in many areas, supply chain issues and the uncertainty around the periodic business interruptions.

"Diversification, having an increased online presence and targeting local disposable income were all identified as areas of opportunity that the pandemic have highlighted to business owners."