If you are looking for a business opportunity or needing advice on franchising, don't sign anything until you have asked the question: "Are you a member of the Franchise Association of New Zealand?"
"Members of the Franchise Association are the franchise professionals, committed to uphold 'Best Practice in Franchising", says Graham Billings, executive director of the Franchise Association of New Zealand (FANZ), "and the Association works hard to promote the benefits of dealing with members, both for those looking to purchase a franchise and also those who need to gain professional advice."
Membership of the Association by a franchisor requires that they submit their documentation for scrutiny to ensure that their franchise agreements contain all the elements required under the Association's Code of Practice. Some of the key elements are full and proper disclosure of matters important for a prospective franchisee to know and understand, a seven day cooling off period before a prospective franchisee is finally committed to the purchase and, if things go wrong, compulsory mediation as a first step in dealing with the issue.
Affiliate members of the Association include experienced lawyers, consultants and financial institutions from whom you may expect a real understanding of franchising issues.
That is why the Association always recommends that prospective franchisees should buy from a franchisor who is a member and seek advice from Association affiliate members. If you are looking to buy into the franchising community you will be joining a sector of the economy that is far larger than many people realise. Current estimates would suggest that turnover is between NZ$15 billion and NZ$20 billion and represents between 8 per cent and 10 per cent of GDP. With around 350 franchise systems in New Zealand operated by over 18,000 franchisees, the franchising community is a major provider of employment opportunities with total direct employment estimated to be around 100,000 people.
The franchise model is operated across all sectors of business. In New Zealand, franchising has comparatively fewer businesses in the retail sector compared with many other countries, but is comparatively stronger in home and business-to-business services.
Supplied by FANZ