by Heather Barker Vermeer

last updated 20/06/2024

Turning Redundancy Into Reinvention

by Heather Barker Vermeer

last updated 20/06/2024

Why franchising could be a golden ticket to a secure future when redundancy strikes

One thousand public sector service jobs were cut in New Zealand on just one day in April 2024. By June 7 the number of public sector job losses this year, according to Radio New Zealand figures based on ministries and Public Service Association data, neared 6000.

Across our mainstream media, 350 job losses resulted from the collapse of Newshub and a further 68 roles were cut at TVNZ. Yes, the redundancy rollercoaster has rocked Aotearoa in 2024. And Kiwi economists agree, the story for the remainder of the year looks like one of increasing job losses and a gloomier economy.

Westpac chief economist Kelly Eckhold summarises the situation in the bank’s May quarterly Economic Overview. ‘Households and businesses will feel uncomfortable this year. Growth is not at disastrous levels but is weak, and the labour market will do a greater share of the required adjustment. It’s going to be a long grind to fiscal balance. The global economy is still weak, but some green shoots suggest promise down the track. Spring will come - but we need to do the hard yards through winter first.’

What this means for franchising

Dr Callum Floyd of Franchize Consultants suggests an initial plus to this rise in unemployment is that franchisors and franchisees will likely be able to find quality staff more easily. He says, ‘Right now, one of the bigger benefits has been filling job vacancies. That had been challenging some franchisees who had been struggling to open the doors due to staff shortages. And for both franchisors and franchisees, further growth may have been constrained through lack of quality staff. In itself, this is a big boost for franchising.’

He sees the opportunities as being two-fold, depending on where Kiwis sit on the franchising continuum. ‘Prospective franchisees should look for companies with a strong track record, quality franchise system, tools and support. Whereas established franchisors should look at ways to solidify their ability to attract and successfully establish (including access finance for) new franchisees.’

Change of direction

For those keen to explore a new way of working following redundancy, franchising can offer strong appeal. ‘A good franchise offers training, guidance, a known product or service and is, generally, a lower-risk way to go into business,’ says Franchise New Zealand founding editor, Simon Lord. ‘Many franchises also offer you the chance to do something completely new. If the industry you’ve worked in all your life is in decline, that can be a huge advantage.’

Having worked with franchises for over 40 years and been made redundant three times himself before founding Franchise New Zealand, Simon has ridden many waves of change and has seen the sector do so, too. His advice to those currently experiencing redundancy?

‘If you select a franchise with a good solid base and a sound financial model, now could be a good time to start. Franchises traditionally perform better than independent businesses during downturns, and you’ll have an enthusiastic franchisor helping to stack the odds in your favour.

‘There may also be some good new locations coming on the market as other businesses close. Choose the right franchise and you could be well-placed when the recovery comes - as it always does.’

Funding a franchise

Investing redundancy pay into a franchise purchase is a proven path to consider. Whether it’s paltry, palatable or packs a punch, a settlement sum can prove a rare gift, with the ability to supercharge your next move. Trevor Fenton knows. He ploughed his redundancy pay from his telecoms role into ...

This article appears in full in Franchise New Zealand magazine (Year 33 Issue 2). You can read the whole article for free in the digital magazine here or request a free print copy here.

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