13 minute read
FUTURE THINKING: AI IN NEW ZEALAND FRANCHISING
Artificial Intelligence (AI) has emerged as a transformative force across the globe, with innumerable existing and potential applications, but how has New Zealand’s franchising sector embraced this evolving technology?
As franchise systems throughout the country seek to optimise operations, enhance customer experiences, and drive growth, AI technologies are increasingly becoming integral to business strategies. From embryonic, homegrown franchise networks to multi-national giants with a Kiwi presence, the adoption of AI is altering the franchising landscape across Aotearoa.
New Zealand’s unique business environment — with its market size, geographical isolation, and innovative spirit — presents distinctive opportunities and challenges for AI implementation in franchising.
Here, we look at how franchises are leveraging AI technologies, the hurdles they face in adoption, and what success stories are emerging that highlight the potential of these tools to streamline and supercharge franchise operations.
At the 2025 International Franchise Association (IFA) Convention in the USA, held in Las Vegas in February, AI in franchising was a major focus. Numerous sessions were dedicated to discussing how artificial intelligence can be used to optimise franchise environments, improve customer engagement, and provide a competitive edge across marketing, training, and operational efficiency, making it a key topic of conversation among franchisors and franchisees alike.
A critical tool
A central theme of the IFA Convention, AI is now considered a critical tool for modern franchising, not just a trend, with many sessions highlighting its potential to transform the industry. Topics covered included:
• AI-powered chatbots for customer service
• Predictive analytics for sales forecasting
• Automated marketing campaigns
• AI-driven training platforms for franchisees
• Data analysis for operational optimisation
At the IFA Convention, presenters from major franchise brands and AI technology companies focused on case studies and best practice examples of how they are integrating AI into their operations, with a key takeaway being that AI can be leveraged to enhance customer interactions and provide a more personalised customer experience. The consensus was that franchisors who effectively utilise AI are set to gain a significant competitive advantage over those who don’t.
Greg Paget, former franchisor, board member of the Franchise Association of New Zealand (FANZ) and now a franchising and small business mentor, was among the Kiwi contingent at this year’s IFA Convention. “I attended a number of very informative sessions at IFA on AI,” he says. “All of them, without exception, were very good, and I can see that this is something that businesses need to embrace or be left behind.
“The interesting thing compared to previous presentations on this topic, was that the sessions I attended were about far greater practical applications. In the past I’ve heard a lot of experts telling us about how great AI is going to be, but I’ve always found myself leaving a presentation none-the-wiser as far as application is concerned. This year it feels really different.
“There are now a raft of AI tools out there, which I’m starting to play around with. For anybody to become engaged, they simply need to make the leap.”
AI in New Zealand franchising
The franchising sector represents a significant component of New Zealand’s economy, with sales turnover for the entire franchising sector estimated at $73.4 billion according to the 2024 Franchising New Zealand survey conducted by Massey University Business School, and an estimated 114,300 Kiwis employed in business format franchise systems.
As digital transformation accelerates globally, New Zealand franchises have begun exploring AI solutions to maintain competitiveness and improve efficiency.
According to the 2024 survey, approximately 72% of franchises are using or planning to implement AI technologies within their operations. Many franchises reported they are currently utilising AI tools, particularly ChatGPT, to enhance the efficiency and effectiveness of their operations. Respondents also indicated a diverse application of AI across various functions including:
• Content creation for marketing purposes
• Chatbots for customer service and lead generation
• Research and data analysis (consumer behaviour analysis performance tracking, etc.)
• CRMs
• Email communications
Key applications
One of the most visible applications of AI in franchising has been in customer service. Many franchise businesses have implemented chatbots and virtual assistants to handle routine customer inquiries, process orders, and provide information about products and services.
Back in 2022, Night ‘n Day, a New Zealand convenience store franchise with over 50 locations nationwide, implemented an AI-powered chatbot called, ‘Nightbot’ to handle customer queries across its digital platforms. The system was introduced to address frequently asked questions about store hours, product availability, and promotions while collecting valuable customer data. According to the company, the implementation reduced call volumes to individual stores by approximately 30% and improved customer satisfaction scores.
Similarly, Columbus Coffee, with more than 70 cafés throughout New Zealand, has integrated an AI-driven loyalty app that personalises promotions based on customer purchase history and preferences. The system analyses transaction data to suggest relevant offers, with the company seeing a 22% increase in repeat customers and a 15% boost in average transaction value across participating locations.
Operational efficiency and management
Franchise operations involve numerous repetitive tasks and dataintensive processes that are particularly well-suited for AI automation. New Zealand franchises are increasingly deploying AI tools to streamline these functions.
Green Acres, one of New Zealand’s largest home services franchise networks, implemented an AI scheduling system in 2023 that optimises service routes and staff assignments. The system considers factors such as technician skills, customer preferences, and geographic locations to create efficient schedules. Since implementation, the company reports a 25% reduction in travel time between jobs and a 15% increase in the number of services that can be completed daily.
In the food service sector, Burger Wisconsin deployed AI-powered inventory management across its 25 locations. The system predicts ingredient needs based on historical sales data, weather forecasts, and local events, automatically adjusting orders to minimise waste while preventing shortages. This, the company says, has resulted in a reported 18% reduction in food waste and significant cost savings across the network.
Marketing and customer analytics
AI-driven marketing tools have proven particularly valuable for franchises seeking to maintain consistent brand messaging while tailoring campaigns to local markets.
Harcourts, New Zealand’s largest real estate franchise, has implemented an AI marketing platform that analyses local property trends and buyer behaviors to create targeted advertising campaigns for individual franchisees. The system automatically generates social media content, email marketing materials, and digital advertisements tailored to specific geographic markets.
Challenges in implementation: Scaling, connectivity and infrastructure
Despite the promising applications, franchises in New Zealand face several distinct challenges when implementing AI technologies. New Zealand’s market size presents inherent limitations for franchises considering AI investments. With a population of just over 5 million, even nationwide franchise systems operate at a scale significantly smaller than their counterparts in larger markets.
Effective AI systems typically require substantial datasets for training and optimisation. New Zealand franchises, especially smaller networks, can struggle to generate sufficient data volumes to fully leverage AI capabilities.
Employee training represents a significant challenge for franchise systems, particularly in sectors with high turnover rates. AI-based training tools are helping New Zealand franchises deliver consistent, accessible training across multiple locations.
While New Zealand has made significant strides in digital infrastructure, connectivity issues still affect franchise operations in rural and remote areas. This creates challenges for cloud-based AI systems that require consistent, high-speed internet connections.
Paper Plus, New Zealand’s largest book retailer with over 80 franchised stores, experienced this when implementing an AI-powered inventory management system, for example. Stores in areas like Auckland and Wellington saw immediate benefits, while locations in smaller towns encountered synchronisation issues and system delays that needed to be resolved.
Workforce considerations
The integration of AI technologies raises potential concerns around job displacement among franchise employees. This can be particularly relevant and of concern in areas where franchise businesses serve as significant employers in smaller communities. There’s a delicate balance to strike.
Communication is key, as always, to any change roll-out. Franchises will be wise to communicate that their AI systems are intended to augment their service and their people, not replace them. In New Zealand’s often tight-knit communities, maintaining that trust can prove essential to new technology adoption and business morale.
Successful franchise systems have found that transparency and employee involvement in AI implementation are crucial. Speedy Signs New Zealand created ‘digital champions’ within each franchise location — employees who received advanced training on new AI design tools and then helped train colleagues, for example.
Success stories: Franchises leading in AI adoption
Despite the challenges, several New Zealand franchise systems have successfully implemented AI solutions with remarkable results. The 2024 Westpac Supreme Franchise System of the Year, Driving Miss Daisy, is one such beacon.
Running two successful franchise territories in Auckland – Remuera and Ellerslie – has prompted franchisee Richard Lu to add AI to his resource toolkit. “I have been looking at AI for some time now and have been testing the systems myself to see how effective it can be in streamlining our operations.
“With regard to scheduling trips, using AI to assist with the best route available to drivers at any given time has proven very valuable at saving time and stress. Also, we have looked at AI to help with taking calls too. There are some AI systems that can help very effectively with that.
“For example, AI can be very efficient at taking voice messages and converting them into text. This can be particularly useful when liaising with people who may have difficulty hearing. Or, vice versa, converting text into voice messages can be helpful for people with visual impairments, say.”
It isn’t a Holy Grail, however. Richard says, “This application of AI needs to be trialled a lot more, though, from my perspective, as it’s still open to error. Some of our elderly clients or drivers present challenges to this technology with not having very loud or clear voices, or have differences in accents, for example.”
Bringing innovation to business is one way Richard and others in the Driving Miss Daisy franchise network are keeping ahead of the transport service curve and forging a successful road for their franchises. He says, “I am very interested in AI integration and I’m enjoying seeing what it can assist me and my businesses with for better efficiency. I’m excited to see where this can lead.”
Inventories and delivery logistics
New Zealand-founded franchise Hell Pizza, with over 70 locations nationwide, implemented an AI system to optimise kitchen operations and streamline delivery logistics. The system predicts order volumes based on historical data, weather conditions, local events, and even TV programming (yes, they’ve found that certain sporting events and TV shows correlate strongly with pizza orders, for example).
This predictive capability allows individual franchisees to adjust staffing and ingredient preparation in advance, reducing waste and improving service times during peak periods. On the delivery side, the system optimises routes for drivers, considering factors such as traffic conditions, order clustering, and delivery timing promises.
The company reports that franchisees using the system have seen an average 23% reduction in ingredient waste and a 15% increase in deliveries per driver hour, significantly improving profitability.
Customer experience personalisation
A major use of AI in franchising currently in New Zealand is in the area of personalised customer experience. Locally-founded gourmet burger franchise BurgerFuel, has leveraged AI to enhance customer experiences through its mobile app and loyalty programme.
Its AI system analyses individual customer preferences, purchase history, and even the timing of visits to create personalised offers and menu recommendations. The system also optimises the timing of promotions, sending offers when customers are most likely to respond, based on their historical ordering patterns.
The company reports that this ‘personalisation engine’ has increased customer engagement with the app by 45% and boosted average order value by 12% among its loyalty programme members.
The future of AI in franchising?
As AI technologies continue to evolve and become more accessible, their impact on New Zealand’s franchising sector is expected to grow substantially. Several emerging trends are likely to shape this future:
Collaborative AI development
Recognising the scaling challenges of the New Zealand market, it would make sense that franchise systems are likely to increasingly explore collaborative approaches to AI development.
Integration of local AI expertise
New Zealand’s growing AI ecosystem, including university research programmes and specialised AI startups, presents many opportunities for customised solutions that address the specific needs of local franchise operations.
Companies like Soul Machines, a New Zealand-founded AI company specialising in humanised digital interfaces, are already working with several franchise systems to develop virtual assistants tailored to the local market, including proper pronunciation of te reo Māori words and understanding of Kiwi colloquialisms.
Regulatory adaptation
As AI becomes more prevalent in business operations, New Zealand’s regulatory framework is likely to evolve to address associated challenges. The Privacy Commissioner has released guidelines specifically addressing AI systems and data collection, which will shape how franchise systems implement these technologies moving forward.
Franchise agreements are also evolving to address AI integration, with some newer contracts explicitly covering data sharing, algorithm training, and technology implementation requirements between franchisors and franchisees.
In conclusion
Artificial intelligence represents both a significant opportunity and a complex challenge for New Zealand’s franchise sector. While scale limitations and resource constraints present hurdles for implementation, the potential benefits in terms of operational efficiency, customer experience, and competitive advantage are substantial.
The most successful implementations thus far, in AI as with business development generally, have been those that acknowledge New Zealand’s unique business environment rather than simply importing solutions designed for larger markets. By focusing on specific high-value applications, collaborating across franchise systems, and leveraging local expertise, Kiwi franchise businesses are finding their own ways to harness AI’s potential while navigating its challenges.
As AI technologies become more accessible and adaptable, integration into franchise operations across New Zealand is highly likely to accelerate, at pace. For franchisors and franchisees alike, developing a thoughtful strategy for AI adoption — one that considers the unique characteristics of both the local market and individual franchise locations — will be increasingly essential to maintaining competitiveness in this evolving landscape.
The experiences of pioneering franchise systems demonstrate that when implemented with consideration for local context, AI can deliver substantial benefits in a market the size of New Zealand. As these technologies evolve, they promise to further transform the ways in which franchise businesses operate, engage with customers, grow and succeed across Aotearoa.
About the author
Heather Barker Vermeer is editor of Franchise New Zealand media.
She has worked as a writer and editor for over 20 years and is founder of Human Interest NZ, a writing and editing business with a focus on storytelling for a range of organisations across sectors. While she employed the services of search enginerelated AI in her research for this feature, and appreciates its myriad applications, she is most passionate about the importance of human storytelling.
