Australia and New Zealand are sophisticated markets with dynamic,
growing franchise communities. Both offer significant opportunities for franchising.
Australia is the larger of the two countries with around 20 million people. New
Zealand has four million. Per capita annual GDP income is similar with Australia
and New Zealand currently earning about US$20,000 and US$15,000, respectively.
Both are predominantly English speaking.
Both Australia and New Zealand
are sophisticated countries which rapidly adopt new ideas and technologies. For
example, both exhibit similar and/or higher levels of home computer and fixed/mobile
telephone purchasing and utilization as Britain, Canada and the USA.
Australia and New Zealand feature high levels of population
dispersion. Given their respective landmass both countries have relatively small
populations. For example, the USA is of similar size to Australia but has 14 times
the population. Similarly, Britain is similar in size to New Zealand but exceeds
its population by a multiple of 15.
Australia and New Zealand's populations
are further dispersed by each country's unique geographical characteristics. A
great proportion of central Australia is desert and practically uninhabited. The
majority of the population is spread along the country's vast south and east coasts.
Australia's five largest cities account for half of the population and include
Sydney, Melbourne, Brisbane, Perth and Adelaide.
New Zealand, by contrast,
is a long and narrow country consisting of two major islands, the North Island
and South Island. Of similar physical size, the North Island supports slightly
more of the total population. New Zealand's five largest cities also account for
half the population, and include Auckland, Wellington, Christchurch, Hamilton
Like many countries, New Zealand and
Australia are both late franchise bloomers when compared the United States. Franchising
momentum really took hold following the introduction of McDonald's, KFC and Pizza
Hutt in the 1970s.
But that late start is not evident in today's figures.
Indeed, researchers estimate Australia and New Zealand to have 700 and 300 franchise
systems with 51,000 and 14,000 franchised units, respectively.
catapult both Australia, and New Zealand (in particular) to the leader board in
terms of franchising utilisation. Both countries have clearly embraced franchising
as a method for distributing products and services.
Not surprisingly, given
the extent of franchising in both countries, the franchised form has penetrated
an extremely broad range of industry sectors. Notably, both have a large and increasing
prevalence of mobile service-related franchises, such as lawn mowing, home and
commercial cleaning, painting, mortgage broking and PC repairs.
research shows local brands dominate the Australian (92%) and New Zealand (77%)
franchise landscape. Both countries are forward thinking with local entrepreneurs
fast to develop innovative new formats and apply franchising to previously non-franchised
Numerous homegrown franchises have established nationwide
prominence and some have internationalized and/or achieved overseas recognition.
Successful Australian examples include Jims Mowing (Home Services), Baker's Delight
(Bakery), Cash Converters (Second Hand Retail) and Bartercard (Barter Trade System).
Acclaimed New Zealand franchises include Fastway Couriers, Harcourts (Real Estate),
Stirling Sports (Sports Retail), Green Acres (Home Services) and Mike Pero Mortages
Australia and New Zealand's
legal environments differ in respect to franchising. Australia has specific legislation
in the form of a compulsory Franchising Code of Conduct, which was introduced
in 1998. The Franchising Code of Conduct was introduced to better protect both
parties to a franchising relationship, and encompasses requirements for a comprehensive
disclosure document, a cooling off period (for freshly inked agreements), and
a mandatory dispute resolution procedure. New Zealand, by contrast, currently
has no specific franchise regulation. However, the [very active] Franchise Association
of New Zealand does have a stringent Franchise Code of Practice which is compulsory
Both Australia and New
Zealand offer significant export potential for overseas franchisors, and Western
countries (especially the US, UK and Canada) will find Australia and New Zealand
culturally similar, and with few legal barriers. Some international franchisors
(such as McDonald's KFC etc) have established strong nationwide networks in both
countries but this does take time. Not all forays into Australia and New Zealand
are successful, however, as exemplified by Taco Bells recent exit of Australia.
While culturally similar to the US (and many other Western countries), subtle
differences in taste can make a big difference to the feasibility and potential
of certain formats.
The relative close proximity of New Zealand to Australia,
when compared to the distance from Europe and the Americas, means large international
franchisors sometimes bundle both countries in a single regional agreement. Yet
while the two markets certain similarities there are distinct differences that
render such decisions questionable. For example, New Zealand and Australia are
actually physically further apart than often perceived. Furthermore, the two countries
also do vary markedly on basic factors such as landscape, climate, legal context
and customer tastes.
While significant and exciting potential exists, international
franchisors are wise to seek local assistance for evaluation and assistance with
Australian and New Zealand franchise expansion.
first appeared in International Franchising (Spring 2004)