NZBUSINESS.CO.NZ 43
SIMON LORD IS PUBLISHER OF FR ANCHISE NEW ZEALAND MEDIA, WHICH PROVIDE FR ANCHISE INFORMATION
AND DETAILS OF BUSINESS OPPORTUNITIES AND PROFESSIONAL ADVISORS NATION WIDE. A FREE PRINT OR
DIGITAL COPY OF FR ANCHISE NEW ZEALAND MAGAZINE IS AVAILABLE FROM W W W.FR ANCHISE.CO.NZAuckland–don’tgothere!
SIMON LORD OUTLINES THE BENEFITS AND ADVANTAGES OF CHOOSING TO GET INTO A FRANCHISE
BUSINESS IN THE REGIONS.WHEN MY WIFE and I
arrived in New Zealand almost
30 years ago, we never intended
to stay. We had allowed just six
weeks to see the country from
Cape Reinga to Bluff, but New
Zealand’s beauty, its beaches and
its people got into our souls and,
after an additional two weeks stay
in Golden Bay forced upon us by
a ferry strike, we decided to apply
for residency.
“We can live anywhere but
Auckland,” we told ourselves. We’d
done enough city living in London.
Well, the inevitable happened
and I was offered a job in
Auckland. But we stuck by what
we had said and went to live in
Whangaparaoa, 40 minutes’ drive
north of the city in what was then
Rodney District.
It was beautiful, with wonderful
quiet beaches and parks, and
far enough out that Aucklanders
regarded it as a weekend
destination requiring an overnight
stay – something that gave us
some quiet amusement.
Today, sadly, Auckland
has spread to swallow up not
just Whangaparaoa but much
of the green space between
Whangaparaoa Peninsula and the
city itself. Masses of featureless
new developments have arisen
here, as elsewhere in the
‘Super City’, with inadequate
infrastructure, no landmarks and
few nods to the past. The desire
to become a ‘world class city’ is
turning Auckland from one of the
world’s most appealing places to
live into a congested mess.
My suggested slogan for the city
QRZLV³$XFNODQG±GRQ¶WJRWKHUH”
The developments have been
accompanied by new retail centres
to serve their growing population- sometimes at the expense of
established centres elsewhere.
These developments tend to
attract retail and hospitality
businesses but, all too often, the
initial rents are set for an expected
OHYHORIWUDI¿FWKDWWKHFHQWUH
will not achieve for three years
or more. If you’re a corporate
retailer you can afford to take the
hit, offsetting the losses against
WKHSUR¿WVPDGHE\PRUHPDWXUH
sites until the shoppers arrive.
But if you’re a franchisee with just
theoneoutlet,failuretoachieve
SURMHFWHGWUDI¿FQXPEHUVFDQVRRQ
eatupyourworkingcapital.
For many, therefore, it’s good
news that a great deal of the best
growth being experienced by
franchisors and franchisees these
days is happening in other parts
of the country. As people escape
Auckland, cash up their property orseek affordable homes elsewhere,
new business opportunities are
arising in other locations.
In fact, Westpac reports that in
many franchise systems, some of
WKHPRVWSUR¿WDEOHRXWOHWVLQ1HZ
Zealand are located in the regions
rather than the major centres.
7KHNH\ZRUGKHUHLVμSUR¿WDEOH¶
rather than ‘highest sales’.Regional centres might have a
slowereconomybuttheycan
produce better results.
There are four main reasons
for this:- Regional businesses often enjoy
farbetterrentratiosthanurban
ones. The property market and
rates in Auckland mean that
many businesses need to have a
VLJQL¿FDQW OHYHO RI VDOHV EHIRUH
they even cover their costs. - While sales may be lower in the
UHJLRQV VR DUH VWDI¿QJ FRVWV
Although minimum wage rates
arenational,theoverallwage
billisoftenlower.Rentandstaff
are the two biggest costs for
PRVWEXVLQHVVHVVRORZHU¿[HG
FRVWVPHDQJUHDWHUSUR¿WDELOLW\ - In many sectors, there is less
FRANCHISE FILEcompetition, both from other
franchised brands and from
independents. While some
independent operators may be
excellent, most will be average
and none will enjoy the buying
and marketing power of a
franchise, or the operational
support that goes with it.- Because other costs, such as
housing, are lower in most
regional centres, franchisees
don’t need to take as much out
of the business to cover their
everyday living costs. This
means they can reduce debt
faster and reinvest as required.
$OO WKHVH EHQH¿WVDGGXS±DQG
when you add the disadvantages
of Auckland’s high property prices
DQG DOOGD\ WUDI¿FMDPVWRWKH
mix, the appeal of out-of-Auckland
businesses becomes obvious.
Of course, if you already have
a business in Auckland, you may
QRW KDYH WKH ÀH[LELOLW\WRPRYH
easily–especially if you have
trusted and skilled staff. But if you
are looking to set up something
new by buying a franchise, doesn’t
it make sense to look elsewhere?
For many people, moving to the
regions can not only offer a more
attractive lifestyle – it can offer
PRUH SUR¿WDEOHRSSRUWXQLWLHV
too.“In many franchise systems
some of the most profitable
outlets in New Zealand are
located in the regions rather
than the major centres.”