Franchise New Zealand | Summer 2026 | Year 34 Issue 04
58
Australia has a lot going for it. It’s comparatively close, culturally familiar, and
large enough to offer genuine growth potential. With a population of around
27.7 million, both Sydney (5.5 million) and Melbourne (5.3 million) individually
exceed New Zealand’s total population. Add in shared language, lifestyle, and
business culture, and it’s easy to see why expansion across the Tasman feels
like the natural next step for New Zealand franchisors.
Economically, Australia is in another league. Its GDP is about USD 1.8 trillion
versus USD 263 billion for New Zealand, and Australian GDP per capita sits
around USD 65,950 compared to USD 49,380 here. It seems there is plenty of
opportunity for enterprising franchisors ‘crossing the ditch’.
And yet, while the opportunity is real, the experience of some Kiwi brands
shows that Australia is a tougher and more complex market to succeed in
than it first appears – often tougher than the reverse journey for Australian
systems coming our way.
Franchising in Australia vs New Zealand
Both countries have enthusiastically adopted franchising. Australia is home
to over 1,000 franchise systems and around 90,000 franchised units. New
Zealand has more than 500 systems and nearly 30,000 units.
On a per-capita basis, New Zealand is one of the world’s most franchised
nations. But Australian systems are far larger. McDonald’s, for instance, has
1,000+ restaurants in Australia versus about 170 here, and it is common for
local Australian brands to have three to five times the number of domestic
units held by their New Zealand-founded counterparts. That scale means any
New Zealand entrant is competing with well-capitalised, highly professional
operators who set a high benchmark for system sophistication.
Franchising regulations
Comparatively, New Zealand offers a simple, light-touch regulatory
environment. There’s no franchise-specific legislation. Franchising is
governed through general laws such as the Fair Trading Act 1986 and
Commerce Act 1986. The Franchise Association of New Zealand (FANZ)
provides additional voluntary self-regulation for those franchisors who are
members. The FANZ Code of Practice and Ethics promotes best-practice
disclosure, conduct, and dispute resolution. For franchisors, compliance is
straightforward and relatively low-cost, provided documentation and conduct
are sound.
Australia, by contrast, operates under one of the world’s toughest franchise
regimes. In fact, it is often described by experts around the world as the
toughest country for franchising law. Australia’s mandatory Franchising Code
of Conduct was first introduced in 1998 and is enforced by the Australian
Competition and Consumer Commission (ACCC). The Australian Code sets
detailed rules for disclosure, conduct, good faith, and dispute resolution, and
is backed by some eye-wateringly high civil penalties.
Over the past 27 years, the Code has evolved through five major reviews and
sets of amendments. The latest 2023-2024 Treasury Review has resulted in
further impactful changes along with considerable uncertainty regarding
aspects of meaning and compliance approaches.
Two recent changes illustrate how far regulations have developed:
1. The opportunity to make a reasonable return
For the first time, the Code explicitly requires franchisors to structure and
manage franchise systems so that new franchisees have a reasonable
opportunity to make a return on their investment. As noted by Stephen Giles
in his Annotated Franchising Code of Conduct (4th Edition), “the Code places
the burden on the franchisor to form a view on return on investment.”
For New Zealanders contemplating
international franchising, Australia is
the logical first stepping stone. Or is it?
Dr Callum Floyd elaborates.
FRANCHISING
IN AUSTRALIA
TODAY
Franchise Development
Get the right advice. Talk first with New Zealand’s
longest established, largest and most award
winning team. Work with a company engaged on
major projects with many of the biggest and best
emerging names in the franchise sector.
Call Dr Callum Floyd (CFE) 09 523 3858 or email
callum@franchize.co.nz www.franchize.co.nz
Brilliant Commercial Cleaners
Six times winner
‘Service Provider of the Year’
Westpac New Zealand
Franchise Awards
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