The history of Franchising in New Zealand

The Origins of Franchising in New Zealand

The concept of franchising originated centuries ago, with the term "franchise" deriving from the French word "franc," meaning free. It referred to the right or privilege granted by a sovereign or government to an individual or group to carry out a specific activity or business. However, modern franchising as we know it today emerged in the mid-20th century in the United States, and it gradually spread to other countries, including New Zealand.

The first franchise system in New Zealand is believed to be the Esso (now ExxonMobil) petrol stations, which began operating in the country in the 1930s. Esso provided the fuel and the branding, while local entrepreneurs operated the service stations under a franchise agreement. This marked the beginning of the franchise model in New Zealand, and it laid the foundation for future franchises to follow.

The Growth of Franchising in New Zealand

The growth of franchising in New Zealand gained momentum in the 1960s and 1970s. One of the earliest successful franchisors in the country was the fast-food chain Kentucky Fried Chicken (KFC), which opened its first store in New Zealand in 1971. KFC paved the way for other international franchises to enter the market, and soon, other well-known brands such as McDonald's, Burger King, and Pizza Hut followed suit. These franchises brought a new level of convenience and familiarity to the New Zealand market, and they quickly gained popularity among consumers.

In addition to international franchises, New Zealand also witnessed the emergence of local franchises in various industries. Retail, automotive services, real estate, and hospitality were among the sectors that saw the growth of homegrown franchise brands. One notable example is the fast-food chain, Georgie Pie, which was a Kiwi icon in the 1980s and 1990s, known for its meat pies. Georgie Pie grew rapidly through franchising, and at its peak, it had over 130 stores across New Zealand.

The Role of Franchising in New Zealand's Economy

Franchising has played a significant role in New Zealand's economy, infact New Zealand is believed to have more Franchises per capita than anywhere else in the world! It has contributed to job creation, economic growth, and innovation. Franchises have provided opportunities for aspiring entrepreneurs to start their businesses with the support and resources of an established brand. Franchise systems typically offer training, marketing support, and access to a proven business model, which can help franchisees succeed in their ventures. Franchising has also helped in regional development. Franchise systems often expand into smaller towns and rural areas, where they can create employment opportunities and contribute to the local economy. This has helped to bridge the gap between urban and rural areas and promote economic growth across different regions of New Zealand.

Franchise systems have also played a vital role in promoting innovation in the business sector. Franchisors are constantly looking for ways to improve their systems, products, and services to stay competitive in the market. This drive for innovation has led to the development of new business concepts, operational practices, and technological advancements, which have benefitted not only the franchise systems themselves but also the wider business community in New Zealand.

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