last updated 16/05/2023
NZ attractive to international franchise brands
last updated 16/05/2023
May 2023 – The latest global ranking of countries by franchise potential shows New Zealand in a top position, slightly out-performing Australia. Why?
The latest quarterly GlobalVue chart from Edwards Global Services (EGS) once again ranks New Zealand in the top 10 countries in the world for franchises to consider when expanding internationally. In fact, New Zealand comes in equal third, just behind the USA and the United Kingdom, and on a par with Spain, the United Arab Emirates, Canada and Israel, and marginally ahead of Australia, France and Saudi Arabia.
The long-running ranking chart from the US franchise consultants is significant because it reflects conditions in 40 countries on an international basis, regardless of short-term media stories. The analysis looks at:
- Projected GDP growth
- Market Size
- Legal Concerns for international brands
- Overall Ease of Doing Business
- Ease of International Brand Entry
- Ease of Starting a New Business
- Corruption Index
- Political & Economic stability
- Ease of Finding Investors in 2023-2024
New Zealand is ranked equal first with a score of 1 on all criteria except for Investors (2), GDP Growth (3) and, understandably, Market Size (4).
Interestingly, New Zealand out-performs Australia on two areas: Legal Concerns and Ease of International Brand Entry. We are ranked higher than the USA in these areas, too. We asked EGS founder Bill Edwards, who advises many US franchise brands, what had led to these rankings.
He told us, ‘New Zealand has no franchise law or formal disclosure requirement, which is a ‘1’ on our Legal Concerns for International Brands ranking. The USA has both franchise laws and a formal franchise disclosure requirement which is a ’2’ – still good, but not quite as high.
‘Australia has both regulations and the formal disclosure requirement, along with other forms of regulation which mean that it could be a little less attractive for international companies, despite the larger market size.’
It’s worth noting that comparable surveys over the years have shown that the level of substantial franchisor/franchisee disputes is similar in both New Zealand and Australia, despite the stricter regulatory regime across the Tasman. Bill suggests that, because the Franchise Association of New Zealand has set standards to take the place of franchise regulations and formal disclosure requirements, this has helped deliver low franchise litigation over the years. Franchise buyers should be aware, though, that non-FANZ members are not bound by the FANZ Codes.
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