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I have been in franchising since 1986, and I see 2025 as a year of great potential for everyone in the industry. It’ll be a year where we’ll see a more business-friendly country with more growth and acquisitions and less focus on taxes and regulation. If gas prices can be dropped and inflation can be tamed, I’m positive about 2025. The growth in the stock market was a pleasant surprise last year, and we’re seeing additional opportunities going forward in 2025.
The momentum has been building for several years. In 2024, according to the International Franchise Association (IFA), the U.S. franchising sector surpassed 800,000 outlets, recording $850 billion in sales – 5% better than in 2023, a respectable increase given the uncertain state of the economy. The IFA says more than three-quarters of the revenue came from quick-serve restaurants, which rang up $250 billion even as food costs rose 29% in the last four years.
If you’re a current business owner looking to franchise your company, connect with an expert such as Accurate Franchising, a franchise consulting service that will help you every step of the way. Franchising as a whole has an encouraging outlook, but specific sectors are worth an extra look, based on industry research and our own experience.
Best Bets for first time investment
If you’re looking to get into franchising, these sectors are some of the most promising:
The drive toward entrepreneurship is creating high demand for business brokerages, investment analysts and, of course, franchising consultants.
Fast-casual brands offering health-conscious menus and delivery options are attractive to consumers for convenience and quality.
Eco-conscious consumers are driving a strong push toward sustainability in franchising, and companies that prioritize sustainability are likely to win customer loyalty and stay ahead of regulatory changes. Green initiatives like using eco-friendly packaging and materials as well as energy-efficient operations are becoming standard practices.
Related: Here’s how we determined our annual Franchise 500 ranking and what we learned from the data.
Challenges and Considerations
While the outlook is generally positive, franchise investment requires thorough research to find your best-match brand and determine if franchising is right for you. There are a few potential setbacks to be ready for:
All companies must navigate potential economic fluctuations. Restaurants can bring in healthy revenue, for instance, especially with the popularity of meal delivery services. But margins are razor-thin, even without the inflation we’ve all been suffering through. Franchises, especially in the food service sector, must be prepared for potential cost pressures and adapt their pricing strategies accordingly.
Consumer tastes are evolving rapidly. Franchises must stay agile and responsive to shifting preferences, particularly regarding sustainability, health-consciousness, and convenience. Any successful business must be open to change when necessary and willing to adapt or risk losing market share to more innovative competitors.
As the industry grows, finding and retaining skilled talent becomes crucial. Franchises must invest in leadership development and training programs to ensure franchisors and franchisees have the expertise to drive expansion.
Related: See Which Brands Topped Entrepreneur‘s 46th Annual Franchise 500
Tips for Successful Franchising
I’ve always been a big believer in technology, and in 2025, we’ll see franchises embracing it more than ever before. Artificial intelligence will become more integral to franchise operations. Customer service, automated inventory systems and mobile apps are becoming essential tools for streamlining operations and enhancing user experiences. This tech integration is not just about efficiency; it’s about creating personalized experiences that meet evolving customer expectations.
Customers in 2025 expect tailored experiences. Franchises should leverage data to offer personalized services, from customized meal plans to curated product recommendations.
New franchises must establish a robust online presence to reach and engage customers effectively.
Industries evolve, customer needs change, and competition gets more challenging. Training must be ongoing and involve franchisees and their staff to maintain consistency and quality across locations.
Transformation ahead
Our industry is poised for significant growth and transformation in 2025, with several key trends and developments shaping its landscape. As we look ahead, exciting opportunities and potential challenges emerge for franchisors and franchisees alike.
