franchise.co.nz – PUTTING PEOPLE IN BUSINESS
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Over the past six years there have been
significant changes within the franchise
sector across the globe and in New Zealand.
Rising living costs, turbulent economies,
global instability, and the rapid acceleration of
technology and AI have all helped reshape the
franchise landscape and consumer behaviour.
“Since the pandemic, there has been inconsistent
growth for many franchise brands, and in the last
few years we have experienced the most volatile
environment I have seen,” says Vanessa Wilmot,
Managing Director at Geotech
Information Services.
Vanessa points out some notable trends impacting consumer behaviour
in New Zealand, which include the aging population (around a fifth of the
population is now aged over 60) and increasing cultural diversity. And
with hybrid models of working now more commonplace, she says, New
Zealanders are purchasing more from ‘local’ offerings than ever before.
However, with the rising cost of living, consumers are also being more selective
with their spend. It is even more critical than before for franchise systems to
ensure that they are located in the right locations within communities.
“This is where data and a well-defined network plan can assist,” says Jeff
Vassel, Global Business Development Manager at Geotech. “It is important for
franchise brands to determine where their key target markets are located in high
concentrations – at home, at work and at play – and to position sites or territories
to be able to conveniently tap into those local community-based markets.
Not only are consumers feeling the pinch, but so are franchise networks,
recognises Jeff. All of the different factors at play in the current environment
mean that the costs of doing business are higher.
“The cost to franchisors and franchisees in making the wrong site or territory
network planning decisions can be substantial,” he says. “For franchisors, it
can lead to missed opportunities (if a better or more suitable site or territory
was available), underperforming franchises, and even market share lost to
competitors if they are more conveniently positioned. For franchisees, it can
lead to reduced revenue and increased costs of trying to counteract the
consequences of poor site selection.”
What can franchise systems do?
“We are finding that franchise systems are turning more than ever before to
network optimisation strategies and organic growth, rather than just focusing
on new sites or territories,” says Jeff.
“What now separates higher growth franchise systems from the rest is
their use of cutting-edge data analytics, AI, and making more informed data-
driven decisions.
“By understanding how your sites and territories are performing compared
to their true potential, you can identify which sites are underperforming and
the potential upside in revenue for a range of different possible actions. We
often find that there is as much, if not more upside in undertaking a network
optimisation strategy than there is in opening new sites or territories.”
How can Geotech help?
Founded over 20 years ago, Geotech Information Services works with
businesses on both sides of the Tasman. Geotech is a member of the
Franchise Council of Australia and has been actively involved with New
Zealand franchises for many years.
Geotech provides data solutions that allow franchisors to make smarter,
faster, and more profitable decisions for their network planning, network
optimisation, and territory allocation.
“In a data-driven era,” says Jeff, “the challenge for many companies is knowing
where to start, and what types of business problems data and analytics can
help solve.” He cites a few examples:
Sales forecasting & strategic network planning: Analyse the sales
performance of stores or territories in your network against their site, precinct
and local market characteristics, to identify critical factors driving sales and
incorporate them into your forecasting models.
Quantifying cannibalisation within your network: Understand the potential
impact new locations have on your existing franchise network.
Network optimisation strategy: By understanding how your existing network
is performing versus the potential of each store or territory, underperforming
sites or territories can be identified and network optimisation strategies
implemented to increase revenue.
Local store marketing: A data-driven local marketing system, combined
with local demographic and traffic information, ensures the most effective
local marketing strategies are being adopted by every store or territory in
a network.
Channel strategy: Gain valuable insights by understanding how online
and delivery channels work and interact with traditional retail outlets.
Do the channels work together and complement each other, or compete
and cannibalise?
Be proactive today for growth tomorrow
“We are currently operating in one of the most challenging and rapidly
changing business environments the franchise sector has faced,” says
Jeff. “For franchise brands, the cost of making the wrong decisions has
never been higher. Renewing a lease, opening a new location, retaining an
underperforming site or territory, or failing to identify untapped opportunities
within an existing network can all have significant long-term financial
impacts on both franchisors and franchisees.”
“Franchise systems that are proactive and willing to continually evaluate and
optimise their networks will be far better positioned for sustainable long-term
growth,” adds Vanessa. “In today’s environment, network planning is no
longer simply about expansion – it is about ensuring every site and territory is
performing to its full potential.”
And Jeff concurs, “Franchises that embrace data, analytics and strategic
network planning will be best placed to reduce risk, uncover opportunities
and build stronger, more
resilient networks for
the future. To learn more
about how Geotech
Information Services
can support you in
identifying where the
opportunities are for
your brand, contact
us now.”
In an era of rising costs, Geotech
Information Services explain why franchise
network planning and optimisation matters
more than ever
MISSED
OPPORTUNITIES
Franchise Management
Geotech Information Services
www.geotechinfo.com
Contact
Jeff Vassel
jeffv@geotechinfo.com
Advertiser Info
Vanessa Wilmot