Demand is real, and that is not the question
New Zealand’s takeaway food services sector generated an estimated $1.1 billion in sales in the first quarter of 2026, up 3.4% year-on-year, according to the Restaurant Association of New Zealand. Against a backdrop of broader hospitality stress, that is a genuinely strong result, and it is not a bubble.
Zoom out and the picture is larger still. IBISWorld puts the total fast food and takeaway industry at $4.5 billion for 2025-26, with annualised growth of 3.5% over the past five years. The category has absorbed cost-of-living pressure and kept expanding. Demand for a $12 burger is about as recession-proof as consumer spending gets.
So the honest starting point is that the market is real, durable and growing. For anyone weighing a franchise investment, that is exactly the number a broker leads with. It is also the number that hides the risk.
More operators than the growth can feed
Here is the problem sitting underneath the headline. The sector now counts 7,245 businesses, a figure growing at a 3.8% compound annual rate since 2020. Operator numbers are climbing faster than revenue. When more players chase the same pool of consumer spending, average revenue per operator does not grow, it comes under pressure.
That is the arithmetic mainstream coverage tends to skip. A market can be growing at 3.5% while the typical individual operator goes backwards, because the number of mouths at the trough is rising at 3.8%. Aggregate expansion and unit economics are not the same story, and the divergence is structural, not cyclical.
Scale takes the upside
Who actually captures the growth? Overwhelmingly, the operators with scale. McDonald’s New Zealand runs 177 sites, employs around 12,000 people and has six more stores planned in the next year. At that size, it commands supply chain leverage, technology infrastructure and marketing budgets no independent or small franchisee can match. System-level growth accrues to the franchisor through royalties, fees and supply arrangements, largely regardless of how any single store performs.
That is the franchise model working as designed. It is also why the franchisor’s incentive, more stores and more royalty income, does not always line up with the individual unit’s profitability. Franchisees routinely fund entry through personal savings, second mortgages or family loans, which means the downside is not a business write-off, it is personal insolvency.
Delivery redrew the map, and not in the franchisee’s favour
The bigger structural shift is delivery. Chris Wilkinson, managing director of First Retail Group, puts it plainly: “Once upon a time your competitor was the guy down the road. Now that competitor could be in another district.”
He adds that an operator “could actually be anywhere and have a site fulfilling that local market. In the old days you’d be thinking I want to have that corner site, I need that brand visibility.”
This cuts against the traditional franchisee hard. For a new entrant, delivery removes the need for expensive high-street real estate. But an existing franchisee who signed a long lease on the promise of foot traffic and brand visibility now finds that location premium partly redundant, while the rent obligation stays exactly where it was. Wilkinson notes younger consumers pick where to eat off reviews and TikTok, not proximity, which erodes the location moat these franchises were built on.
Then there is the platform take. Delivery aggregator commissions widely run at 25-35% per transaction in comparable markets. An operator generating impressive gross revenue through the apps can be left with a margin that will not cover rent, wages and royalties combined. The platform captures the distribution margin. The operator carries the fixed costs.
The exposed position
Wilkinson’s advice to smaller operators, tight menus, disciplined buying and portion control, and technology to automate ordering, is telling. These are survival tactics, not growth strategies. The operators who win are those with scale, brand and supply chain leverage, or those running lean, low-fixed-cost, tech-enabled shops. The exposed middle is the mid-size franchise with an expensive lease, high royalties and delivery-dependent revenue.
For B2B News readers eyeing a franchise, the due diligence question was never “is the market growing?” It clearly is. The questions that matter are the royalty and fee structure, the delivery commission obligations, what the lease looks like in a post-location-premium world, and what franchisee-level profit actually is net of all of it. A $4.5 billion market with 7,245 competitors and rising delivery dependency is a very different proposition from the one the headline sells.