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Thursday, October 1, 2020
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What’s in view for 2020

Franchising Trends

The end of a year and the start of a new one is always a great time to contemplate and plan for what’s coming.

It is also a great opportunity for us to review the crystal ball gazing we did earlier in 2019 with what’s trending in franchising.

Time to polish the crystal ball for the coming year. So how did our trend predictions play out this year, and what’s going to trend and where are the opportunities in 2020?

Multi-brand franchisors

Big tick here, in the food category alone, with BurgerFuel World Wide re-focusing on the New Zealand market and introducing two new brands.

Columbus Coffee owners Café Brands purchased the Mexico group, Coffee Club has started to expand Bird on a Wire and perennial creators and owners of Mexicali and Burger Wisconsin expanding the Ha Poke brand and working on future brands. A focus on product diversification and market segmentation will see other mature franchisors develop and introduce additional brands to their portfolios and existing franchise base.

Multi-site and multi-brand franchisees

We may have been a bit ahead of ourselves here, so this is still a watch this space as the sector matures, but it’s happening.

Again, innovation is emerging with multi-brand single location franchisees increasing their offerings and market appeal and combating ever rising operating costs.

Health and well-being

Goes from strength to strength, multiple and new fitness brands continue to expand, often in places that you would not expect. Workouts are getting shorter and somewhat more interesting.

Based on the US and Australian markets, we will continue to see change and innovation in this consumer – and in turn franchise – market space.

Commercialising and eventual franchising in the mental health space is an area to keep an eye on.

An environmental focus

I predicted disappearing plastic bags were just the beginning – and was this an underestimate.

Consumers drive the future of brands and if worldwide student protests are an insight into the future of consumption, then it’s green. Overseas markets have seen massive growth in bulk retailing, which is emerging in New Zealand.

A couple of areas to also watch will be systems focused on recycling and resource use reduction, whether conversion of existing processes such as making your house more eco-friendly or incorporated into delivery of their core service or product.

Plant-based food

My prediction for 2019 was this “will be a category to watch as it becomes mainstream”.

Almost all the major food franchise brands are now chasing a segment of the plant-based food market.

New Zealand’s only 100 percent plant-based branded offering – Lord of the Fries – is looking to expand through franchising and a major crowdfunding exercise.

Technology

We identified disruption and technology as the macro-trend of our times.

Disruption will continue in large, noticeable ways as well as the insidious creep of technology, hardwired into processes such as AI.

Shared and gig economies

As predicted, there were big developments in this area also with the world’s largest shared office space provider IWG introducing and rolling out a franchise model across New Zealand.

On a smaller scale, expect to see savvy franchisors explore ideas to pool capital and human resources in all sorts of franchises from social enterprise cafes to ride sharing.

Other factors that will influence New Zealand franchising in 2020
The economy. Local and international pessimism persists. This may drive an interest in franchising generally as people look to exit corporate life for a sense of control and relative stability.

However, a changing banking environment could potentially make funding harder.

Concerns over the introduction of legislation are re-emerging, which may be either tempered or could flare up with an election looming in the latter part of 2020.

Nathan Bonney
Nathan Bonney
Director of Iridium Partners. He can be reached at nathan@iridium.net.nz or 0275-393-022

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