July 2016 Quarter ResultsFRANCHISEE SALES AND PROFIT OUTLOOK STRONG

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Key Survey Highlights

• Responding Franchisors and Service Providers sentiment provides a more optimistic outlook specifically across franchisee sales levels and franchisee profitability.

• Franchisors sentiment toward general business conditions was slightly more sombre this quarter.

• Franchisors sentiment about franchisee profitability levels – arguably franchising’s most important key performance indicator, bounced back to levels similar to January, with sales levels showing a positive increase.

• Franchisor sentiment for franchisor growth prospects remained stable, however sentiment for access to financing decreasing sharply.

Background

• Quarterly survey of more than 400 New Zealand franchisors and 100 specialist Service Providers (e.g. consultants, banks, accountants, lawyers and publishers) to the franchising community.

• Explores confidence in key measures critical to the success of franchising, including the wider environment, growth determinants, and franchising health attributes and franchise system growth prospects.

• This survey represents the views of 35 Franchisors and 20 Service Providers.

The Focus

GENERAL QUESTION AREAS

1. General business conditions

2. Franchisor growth prospects

3. Franchising growth drivers• Access to capital• Access to suitable franchisees• Access to suitable locations • Access to suitable staff

4. Franchisee growth & profitability prospects• Franchisee sales levels• Franchisee operating costs• Franchisee profitability

5. How are things looking for franchisors and Franchisees in their respective sectors?

Respondents indicate whether they expect the following aspects to be better, the same or worse over the next 12 months (compared to the previous 12 months)

The Results

The latest results indicated more sombre franchisor (net 26%) sentiment toward general business conditions. Service Providers were slightly more positive, up from net 37% to net 50%

The Results

•Franchisors (net 46%) remained stable about prospects for franchisor growth. These results are in line with the net 45% in the previous quarter.

Franchisors (net 46%) remained stable about prospects for franchisor growth. These results are in line with the net 45% in the previous quarter.Service Providers were similar with a small increase from net 47% to net 50%

The Results

Franchisor sentiment toward access to suitable franchisees increased markedly this quarter, from a net negative 6% to a positive 11%. Service Providers, meanwhile, were less optimistic at a net 5%.

The Results

Franchisors remained constant and subdued in sentiment toward the availability of suitable staff at a net negative 12%, down from net negative 9%. Service Providers were moderately more positive at a net 5%, although down on the more positive net 11% in April.

The Results

Franchisor sentiment towards access to suitable locations was again positive increasing from net 3% to 6%. Service Providers dropped back to net 5%, after having experienced a spike at net 53% in the January survey.

•Franchisor sentiment towards access to suitable locations was again positive increasing from net 3% to 6%. Service Providers dropped back to net 5%, after having experienced a spike at net 53% in the January survey.

The Results

Franchisor confidence in franchisee operating costs remained negative dropping this quarter to a net negative 6%. Service Provider sentiment was reflected at a net 5%.

The Results

Franchisor sentiment towards future franchisee sales levels showed a very positive increase to a net 51%, up from net 39% in April. Service Providers featured a very positive increase from a net negative 21% to a positive net 30%.

The Results

Sentiment toward future franchisee profitability bounced back this quarter, to levels similar to January. Franchisors reported a net 40%, as did Service Providers a net 40%.

The Results

Franchisors sentiment toward access to financing decreased markedly from a net 21% to net 0%. Service Providers reported a net 5%, down from 37%.

More Information

www.franchisingconfidence.co.nz

Including:• More detailed and complete results and

analysis• All charts and illustrations

Franchize Consultants

• The Franchising Confidence Index, is founded, designed and operated by Franchize Consultants, New Zealand specialists in franchising and licensing network development. Founded in 1989, Franchize Consultants have a long and supporting association with New Zealand franchising.

• For further information contact Dr Callum Floyd• Ph. (09) 523 3858• Mob. 021 669 519• Email. callum@franchize.co.nz• Web. www.franchisingconfidence.co.nz • Web. www.franchize.co.nz