New Zealand tends to follow macro trends happening overseas and the franchising sector is no different. However, our unique geographic location in the world, our outlook on life and the fact that we are a nation of SMEs produces some interesting local twists and focus. Here are what we see happening and some areas to watch on our near horizons.
As the franchise sector matures, a number of franchisors and systems that have been around for upwards of 20 years have grown as large as the market can support.
Increasingly we are now seeing franchisors expand and develop systems that are distinctly different to the categories or businesses they operate in.
We expect to see this trend accelerate with established franchisors spreading into new categories and businesses where they can apply their capital, skill and network growth experience.
Multi-site and multi-brand franchisees
We expect to see growth in the number of franchisees that operate more than one location or franchise, called multi-site franchisees.
An increasing trend in the US, which we also expect to see here, is an increase in the number of multi-brand franchisees, or franchisees that operate businesses across brands.
In our regional economies – where geographic restrictions may prevent franchisees from expanding to become multi-site franchisees – the possibility of becoming a multi-brand franchisee allows them to utilize their local understanding, and perhaps gain economies of scale by sharing resources.
Health and well-being
Well-being is definitely not a new concept. It has been a hot franchising category for some time.
In the hospitality area we will see continued demand and development for food and beverage brands with a focus on freshness and health.
The fitness category will continue to expand from new types of workouts to offerings focused on the kids’ market and mirco-franchising in the personal trainer and well-being spaces.
Demand is consumer driven and by potential franchisees that want to feel they are contributing to others well-being and develop a life style business.
The tide change on plastic bags is just the beginning, expect to see new categories, new services as part of a move away from packaging and a general environmental focus.
Consumer demand will also be coupled by savvy investors that spot opportunities.
Plant based food will be a category to watch as it becomes mainstream.
Disruption and technology is the macro-trend of our times.
Food delivery has disrupted the traditional bricks and mortar-based food and beverage model like nothing else.
We are already seeing the rise of the ghost kitchen.
Will we see the rise of ghost brands, where there is no physical contact with the market?
Combine this concept with multi-branding franchising and issues of margin, wage and rental pressures and there appears to be a massive opportunity. Watch this space.
Shared and gig economies
Trends will include micro or small investment franchising or systems that people are able to bolt onto either an existing business or their own skill sets.
These include personal and professional services.
Also expect to see some larger capital-based developments like the franchising of shared office space.
And don’t forget traditional standbys
But while we are looking forward at the new, the disrupters and innovators, keep an eye on the established and traditional brands and categories.
There are often very good reasons for their longevity.