Annual survey of franchise brands indicate inflation easing, labor issues and sales remain top priority, while an overwhelming 85% report having a positive relationship with their franchisees
WASHINGTON, D.C. – The International Franchise Association (IFA) today released its 2025 Franchisor Survey, the fourth annual survey of franchise brands highlighting economic challenges and current trends facing franchised businesses. Conducted in partnership with FRANdata, this year’s survey shows that while inflation concerns are easing, labor issues and sales remain a top challenge for franchisors. This year’s survey, coupled with the recently released 2025 Franchising Economic Outlook, indicates another strong year of growth for the franchise business model.
“Over the last five years, the franchise community has demonstrated its resilience in the face of unprecedented challenges, coming out stronger than ever before,” said Michael Layman, IFA Chief Advocacy Officer. “Reflecting the perspective of leaders from across industries and brands of all sizes, the IFA Franchisor Survey offers an illuminating look into the priorities and concerns for the year ahead, which is shaping up to be a time of incredible opportunity and growth.”
Key findings from the 2025 IFA Franchisor Survey include:
- 37% of respondents identify the availability, quality, and cost of labor as their top business challenge.
- 15% of respondents state poor sales are a concern, the second most significant, especially among personal services (42%) and QSR (23%) brands.
- 70% of respondents report that their franchisees have unfulfilled job vacancies, falling from 80% in 2024.
- 48% of franchisor executives expect franchisee total employment to increase in the year ahead, and 40% expect it to stay the same.
- At 12%, inflation concerns are the third most significant business challenge in 2025, up from 9% in 2024, but below the 2023 level of 20%.
- 66% of respondents plan to adjust wages, while 64% intend to increase efficiency as strategies to address labor challenges.
- 56% of brands report experiencing constrained growth due to labor challenges, compared to 81% in 2023.
“Franchising is an opportunistic growth model that provides important forecasting signals because it cuts across hundreds of economic sectors,” said Darrell Johnson, FRANdata Chairman and CFO. “What franchisor executives are expecting and how they are adapting to change has implications across the entire business economy.”
The survey also explored questions about growth and franchisor-franchisee relationships, as part of IFA’s commitment to promote Responsible Franchising practices.
- 85% of franchisor executives report having a positive or very positive relationship between their company and its franchisees.
- 42% of franchisor executives report unit economics to be the single most important factor impacting franchisor-franchisee relationships.
- 64% of respondents believe expedited state registration options would support their franchise growth objectives.
- 54% of respondents plan to use internal franchise sales team to achieve franchise growth in 2025.
The Franchisor Survey encompasses 171 senior executives from 229 brands across 24 different industries that represent over 96,000 units and represent nearly 20% of all domestic franchised businesses.
About the International Franchise Association
Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the approximately 830,876 franchise establishments that support nearly 8.8 million direct jobs, $896.9 billion of economic output for the U.S. economy, and almost 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.
This article was originally published by International Franchise Association