One in 20 Kiwi jobs is in franchising

The recent Franchising New Zealand survey revealed that we live in the most franchised country in the world per capita, with 631 different franchise brands and 37,000 franchised outlets. Now further analysis has revealed just how important franchising is for employment.

The Survey found that 124,300 people are employed in franchises. According to Statistics New Zealand, in the June 2017 year New Zealand had a working-age population of 3.8 million, of whom 2.5 million were currently employed. That means:

Number of employed people:
2,535,000
Number employed in franchises:
124,200
Franchise employees as percentage of total:
4.89%
Therefore:
One in 20.4 employed Kiwis works in a franchise.

The figures are confirmed by Professor Lorelle Frazer of Griffith University, one of the authors of the Survey.

Both the overall and the franchise employment figures include casual employees, making it a fair comparison. In fact, the Survey of Franchising broke that down to show the majority of franchise employees are full-time (74,300) with the remainder part-time (42,500) and casual (7,400). A significant proportion of those employed on a part-time or casual basis would be students working part-time in the hospitality sector where franchising is especially strong and the ability to work shifts around lectures and tutorials is especially valued.

One in 20.4 is a significant figure – but how does it compare to other countries? The survey allows for a direct comparison with Australia, where the figures are:

Number of employed people:
12,160,000
Number employed in franchises:
472,000
Franchise employees as percentage of total:
3.9%
Therefore:
One in 25.8 employed Australians works in a franchise. 

It’s harder to get comparable figures for the USA, but Lorelle says that an analysis of the 2016 PWC Economic Impact of Franchised Businesses suggests the following:

Number of employed people:
160,527,200
Number employed in franchises:
8,968,000
Franchise employees as percentage of total:
5.6%
Therefore:
One in 17.9 employed Americans works in a franchise. 

For some reason, the US employment statistics used for comparison apply only to ‘all private non-farm jobs’ so the actual figure may be closer to New Zealand’s.

Of course, in the USA, employees are not protected by the same level of minimum wage legislation as Australians and New Zealanders (in fact, the US-based International Franchise Association took legal action against a minimum wage law in Seattle in 2014). Here’s an interesting outline of minimum wage levels state-by-state.

Studies have previously shown that franchises are major contributors to the training of young people - in fact, a few years ago, it was announced that McDonald's USA trained more people every year than the US Army. There’s a tendency to criticise such jobs as low-paying jobs with no career prospects, but franchises teach skills, operating systems and teamwork within a structured environment that offers professionally-planned training. Many also offer opportunities to advance through shift, store or regional management, as well as business ownership.

More about the survey

The Franchising New Zealand 2017 survey was conducted by a research team from Massey University Business School and Griffith University’s Asia-Pacific Centre for Franchising Excellence from April to May 2017. The authors are Dr Susan Flint-Hartle; Professor Lorelle Frazer; Professor Scott Weaven; and Dr Anthony Grace.

The survey was sponsored by ASCO Legal, The Franchise Coach, Franchize Consultants, Hayes Knight and Westpac, with support from Franchise New Zealand.

Read our full survey report here. http://www.franchise.co.nz/article/2576

Download the highlights to your device here http://www.franchise.co.nz/survey

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