How NZ Brands Break Out: Sell, Stay or Franchise

A small domestic market hands a New Zealand company two problems at once: it's a soft place to start and a hard place to grow. Sooner or later a brand that wants to be bigger than New Zealand has to decide how it gets out. There are really only three doors. Sell to a multinational. Stay independent and fund the growth yourself. Or franchise the model so other people build it for you. Each one keeps something and gives something up.

Door one: sell

Geoff Ross and Justine Troy started 42 Below in 1999: a premium vodka with a deliberately provocative, unmistakably New Zealand identity. Within seven years it had done what few local brands manage, caught the eye of a global giant. Bacardi bought it in 2006 for a reported NZ$138 million. The sale put 42 Below on shelves it could never have reached alone and handed the brand's identity to a multinational whose interests in it were, reasonably, its own.

Robett Hollis took the same door from a different industry. The content agency he founded in 2007, FRONTSIDE, built a reputation on branded content and social-first campaigns for clients including Air New Zealand and Toyota. In 2018 it joined Publicis Groupe, one of the largest communications companies in the world, folding into Saatchi & Saatchi New Zealand. FRONTSIDE kept its name and Hollis took a role inside the group, but the agency now answers to Paris. Selling buys reach and resources; what you trade away is the final say.

Door two: stay independent

The Mowbray siblings did the opposite. Nick Mowbray and his brother Mat started ZURU from a Waikato farm shed, with Anna Mowbray joining to drive the commercial side. They built one of the largest toy companies in the world, with no outside investment and no equity given away. ZURU is still family-owned and run out of New Zealand, which means the family kept complete control of what the brand is and where it goes. The price of that control is that every dollar of growth has to be earned or borrowed, never raised by handing equity to someone bigger.

Ecostore took the stay-independent route across two families. Malcolm and Melanie Rands founded it in 1993 in a Northland eco-village, selling natural cleaning products by mail order. When they stepped back, the company didn't go to a multinational. It stayed in New Zealand hands, with the Kraus family taking full ownership and Pablo Kraus now leading it as it sells across Australasia and into Asian markets including South Korea, Japan and China. The company manufactures everything at its own carbon-zero certified factory in Auckland and holds B Corp certification. Staying independent kept that environmental ethos intact: the very thing a corporate acquirer might have quietly optimised away.

Door three: franchise the model

Les Mills found a third way out. The first Les Mills gym opened in Auckland in 1968, founded by the four-time Olympian and champion shot-putter of the same name. But the global business is a second-generation story: his son Phillip Mills built Les Mills International in 1997 around a single insight, you don't have to open the gyms yourself. Instead the company licenses its choreographed programmes, BODYPUMP and the rest, to other people's clubs: more than 22,000 of them across 110 countries, taught by roughly 100,000 instructors it trains but doesn't employ. The family never sold and never tried to own the footprint; they franchised the system. The trade-off is consistency: when that many instructors in that many countries are delivering your brand, protecting what it stands for becomes a permanent, unglamorous discipline.

Which door protects the thing?

Put the three side by side and there's no clean winner. Selling buys reach fastest and surrenders identity. Staying independent protects identity and caps how fast you can move. Franchising spreads the model furthest of all and makes consistency the entire job. Each door is a different answer to the same question: how much of the original thing are you willing to risk to make it bigger? The New Zealand brands that travel best tend to be the ones that picked their door honestly, knowing what it would cost. If you're building something here and thinking about what comes next, the question isn't which door is best. It's which trade-off you can live with.

Sources: NZ Herald (42 Below) · Publicis Groupe (FRONTSIDE) · Les Mills · ecostore