For people looking to enter New Zealand on a business visa, buying a franchise looks like an ideal vehicle. But will they make good long-term franchisees, or are they just looking for a shortcut to residency? And how do you go about finding suitable migrants as franchisees?
When I ran my own franchise, I took on two migrants as franchisees. The first was an amiable-seeming Irishman who had run his own business in London for thirty years (“T’irty year” – he had never lost his accent) but turned out to have the foulest mouth and temper if any customer dared to complain. The second, from South Africa, had the opposite problem. He was a complete pushover and did everything he could to please his customers, undercharging and then even letting them off his bills when they didn’t feel like paying.
Both of these franchisees looked great on paper – virtually the ideal fit in terms of experience, skill sets and apparent attitudes – and had no shortage of glowing referees. The question is: Would we have accepted them into the franchise if they’d been New Zealanders? Yes, on the face of it. But as part of our rigorous selection criteria, we would have talked about them with our contacts in their communities – suppliers, other people in the industry, and so on. We didn’t have these contacts in London and South Africa. We would have also visited them and met some of their customers and employees personally. But we didn’t spend the thousands of dollars it would have taken to make those trips.
So are intending migrants a worthwhile source of franchisees for New Zealand franchisors? Definitely, if you’re one of the franchises which probably wouldn’t exist if it weren’t for migrant franchisees or if your franchise requires specialist skills which aren’t readily available in New Zealand. Or if you're already taking on Kiwis but want to add some diversity to your franchise and don't mind going that little bit further to make sure offshore candidates are the right fit for you.
We’re working with a leading immigration consultant who is currently undertaking a roadshow through China. One of his aims is to promote franchise opportunities in New Zealand.
“Franchising is the ideal business opportunity for many intending migrants,” he says. “They recognise the value of an established brand, systems and support in a new country. And they bring value through their industry experience and expertise, which are often vast.”
But what about the language barrier and cultural differences?
“Over the past ten years, China has really opened herself up to the wider world,” he says. “A growing number of parents have been sending their children overseas for their education – we’re seeing that in schools and universities in New Zealand. And more and more foreign companies, including franchises, are doing business in China. So there are millions of Chinese for whom a language barrier doesn’t exist and who are well versed in Western culture. Many of them would love to own a franchise in New Zealand!”
What’s involved in these people obtaining a New Zealand business visa?
“That’s where you come in and we come in. We’re licensed immigration consultants, but we’re not franchise consultants. So we work with you to match our immigration candidates to a franchise which would suit their background and skills. You make the necessary introductions and if the franchisor agrees there is a good fit, arrange for the candidate and franchisor to talk directly via Skype. The next step is for the candidate to come to New Zealand and meet the franchisor face to face. If the candidate is approved by the franchisor, a commitment is made by both parties and we arrange everything required for the business visa application. Then it’s up to Immigration New Zealand, and the process can take several months. But once approved, the candidate has nine months to move to New Zealand and set up the business.”
Do you find that all many of these migrants want is New Zealand residency?
“Of course they want residency and, longer term, citizenship. But that doesn’t mean they’re going to ditch their business as soon as they get residency after two years. They still require an income and a return on their investment, and we’ve found that most are passionate about what they do. As a franchisee, of course, they’re also contractually bound for at least the term of the franchise agreement, and our experience is that almost all of them want to take up the renewal provision.”
Could migrants be good franchisees for you? Don’t hesitate to contact us to your requirements and the possibilities.