Franchise operators in New Zealand are lagging behind their Australian counterparts when it comes to adopting online activities which could help boost results.
A joint report by Massey University and the Griffith Business School in Brisbane estimates the franchise sector has an annual turnover of between $19.4 - $21 billion and 101,800 employees.
The survey found that while the sector had shown resilience, there was room for innovation.
Over half of the businesses surveyed reported an increase in sales, but a quarter said profit margins had fallen, with 60% of franchise operators having to spend more on advertising in the face of increased competition.
Report author Susan Flint-Hartle says the amount businesses make online is an area where New Zealand is slipping behind Australia.