Question 1

What is a franchise?

Accepted Answer

A franchise is a way of expanding a business by granting another person or company the right to operate using its name, business system and know-how, usually for a fixed term. In New Zealand, FANZ’s definition also includes operating under the franchisor’s specified system and receiving ongoing marketing, business or technical assistance. The franchise agreement sets out the relationship.

Question 2

Where did franchising begin?

Accepted Answer

Franchising evolved from a range of established business transactions and practices rather than one simple starting point. A precise account of Singer’s nineteenth-century role and subsequent US business-format growth cannot be confirmed here. New Zealand’s own timeline is clearer: franchising existed by the 1960s, followed by the arrival of McDonald’s and other fast-food brands in the mid-1970s.

Question 3

How has franchising developed in New Zealand?

Accepted Answer

New Zealand’s franchise community developed through both imported systems and local entrepreneurship. Following activity in the 1960s and fast-food arrivals in the 1970s, brands such as Stirling Sports and Rodney Wayne helped lead local development in the 1980s. Home services drove further expansion in the 1990s. FANZ’s formation in 1996 marked another milestone, while today’s market includes predominantly locally developed systems.

Question 4

What are the advantages of franchising compared with going it alone?

Accepted Answer

Franchising can give an owner access to an existing name, business system and know-how rather than requiring everything to be developed independently. FANZ’s definition in New Zealand also includes ongoing marketing, business or technical assistance. These features can provide a useful framework, but assess what a particular franchise actually offers: access to a system should not be treated as a guarantee of success.

Question 5

How do I get started with a franchise in New Zealand?

Accepted Answer

Start by researching opportunities that suit your skills, budget and preferred location. Use QFA’s directory and guides as starting points, then investigate each New Zealand opportunity directly. Request disclosure information and the proposed franchise agreement, ask questions about the operating system and support, and seek independent legal and financial advice. Check FANZ membership rather than assuming every franchisor follows its membership requirements.

Question 6

How is franchising regulated in New Zealand?

Accepted Answer

New Zealand has no franchise-specific legislation, but franchising is subject to general laws, including the Fair Trading Act 1986 and Commerce Act 1986. FANZ members must also comply with its Code of Practice and Code of Ethics; these membership requirements are distinct from legislation. Have a New Zealand lawyer review the agreement and applicable obligations. This is general information, not legal advice.

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