Less than a third of small and medium businesses still operating 10 years later - Stats NZ

Tough economic conditions over the past six years have taken a toll on the survival rate of small- and medium-sized businesses, though franchise operators appear to have fared better than the rest.

International data supplied by the Franchise Association of New Zealand (FANZ) indicates about 75 to 85 percent of franchises were still operating after five years, compared with about half of independent small businesses.

Stats NZ data indicates just 27 percent of SMEs established in 2015 were still in business in 2025.

FANZ chief executive Katrina King said the gap was most pronounced in the start-up phase, where franchise systems and support could reduce the risk of failure by up to half.

“This collaborative approach fosters resilience, enabling many franchise operations to not only survive but continue growing despite broader pressures like fuel price hikes and cost-of-living challenges,” King said.

She said the longevity of franchises was evident in last year’s awards ceremony, with 60 tenure recognition awards presented to operators in business for more than 15 years.

FANZ was established 30 years ago to support the large New Zealand industry, which was considered to be the most franchised country in the world on a per capital basis.

King said franchisors frequently demonstrated leniency and practical assistance during difficult periods.

“This can include cutting or sharing costs to help franchisees weather economic storms.”

She said the franchise structure provided a number of supports to SMEs including established operational systems, brand recognition, training, group buying power, ongoing operational support, and access to specialised skills or capabilities when required.

“Small business owners often talk about the loneliness of their pursuit. For franchisees, that’s not the case.

“Franchisors have a vested interest in seeing every one of their partners succeed, and every franchisee knows that their own business depends on the strength of the group.”

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