Brad Jones: Franchise Association Chair on the growth of the sector in New Zealand, World Franchise Day

New Zealand's $47.2 billion franchise sector is being celebrated. 

Today marks the first World Franchise Day. 

The model first took shape in New Zealand in the 1970s – with now almost 550 franchised brands including in accommodation, hospitality, education, childcare and retail. 

Franchise Association Chair Brad Jones told Mike Hosking they’ve had some great growth in the sector over the last few years.  

He says they’re 11% of New Zealand’s GDP, and if motor vehicle sales and retail fuel are included, that brings them to over $73 billion – 17% of GDP. 

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Episode Transcript

Speaker 1 (00:00):
Yesterday it was numbers around business sales and they were
setting records. This morning it's the allure boning a franchise.
So the industry's had a net worth of forty seven
billion dollars, which is almost eleven percent about GDP. They're
currently around thirty thousand franchise units nationally. Bread Jones Bred
Jacobs rather as the chair of the Franchise Association and
as well us Bread, very good morning to you.

Speaker 2 (00:19):
Thanks for having me, not at all, these.

Speaker 1 (00:21):
Are these golden birthdays? Are these golden days?

Speaker 2 (00:26):
Yes? Yeah, yeah, we've we've had some great growth in
enfranchising over the last few years. Our every few years
we do a large survey with Massi University which came
out last year. And so as you said, we're now
at eleven percent of New Zealand's GDP. And in fact,
if you actually put in motor vehicle sales and retail fuel,

(00:48):
that brings us up over seventy three billion dollars, which
is more like about seventeen percent of New Zealand's GDP.

Speaker 1 (00:54):
We talked to the ABC people yesterday on business sales.
Are business sales the same as franchises? In other words,
they're the same sort of people buying something.

Speaker 2 (01:03):
Yeah, looks I would say there's a lot of overlap. Yes, certainly,
New New Zealanders, if you like, I certainly attracted to
franchise businesses, and franchising is a great model for those
people to get into business with a lot of support
and backing.

Speaker 1 (01:18):
And do they vary widely? And what sort of cover
all protection is there from one franchise to another. The
thing I'd worry about is size and growth my territory,
other people getting sold, et cetera.

Speaker 2 (01:30):
Yeah, Well, in terms of it, does it vary widely? Yes? Absolutely.
You know, franchising covers just about every industry you could
possibly imagine. And you know, the average New Zealander probably
comes in contact with three, four or five franchise the
day without even realizing whether it's getting a haircut, grabbing
a coffee, getting their online shopping delivered to their house,

(01:52):
stopping at the supermarket on the way home from work.
You know, franchising is really everywhere around us all day,
every day.

Speaker 1 (01:58):
So someone clipping that's I could say, So say there's
two cafes, one's a franchise, ones just a cafe. Is
someone clipping the ticket there for the franchise caf is
more expensive because of it.

Speaker 2 (02:07):
No, not at all. My own business is a cafe
franchise system and my role as a franchise or is
to help reduce the operating costs of our franchisese By
bringing together a group of frenchisees at a buying power,
better negotiating with landlords, suppliers, whatever it may be. So
you know, it's my responsibility to offset the franchise fee

(02:32):
that we charge our franchisees. Of course, we also give
them a lot of other systems with operations and compliance
to law, etc. Which as an independent operator could be
quite expensive and very easy to make mistakes on that
sometimes could end up in worse than just a monetary
fine or extra costs.

Speaker 1 (02:49):
Love a good news story, Brad, appreciate it. Bread Jacobs,
who's the chair of the franchise Association. So between the
ABC sales yesterday and a franchise association now, I thinks
seem seem to be turning more. From the Mic Asking
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