Will 2025 be a Better Year for Franchising?

As we approach 2025, the franchising industry stands at a crucial crossroads. Following years of economic uncertainty, shifting consumer behaviours and adaptation to post-pandemic realities, indicators suggest that 2025 could mark a significant turning point for the franchise sector.

The International Monetary Fund (IMF) World Economic Outlook projected a gradual global economic recovery, with growth expected to stabilise around 3.2% in 2024 - 2025. This economic foundation provides a more stable environment for franchise expansion compared to recent years.


Consumer, business and franchise confidence has improved in many countries over the past few months. Inflation, a persistent challenge throughout 2023 and 2024, is predicted to continue to ease, dropping to around 3.9% by 2025. The moderation of inflation will be particularly critical in stabilising consumer spending, a key driver for franchise businesses across sectors like retail, hospitality, and services​. A corresponding fall in interest rates is good news for franchise expansion as business borrowing by franchisees becomes more affordable.


"We're seeing renewed optimism in the franchising sector," Catherine Monson, Chair of the International Franchise Association (IFA), noted in the organization's 2024 Economic Outlook. "While challenges persist, particularly around labor costs and supply chain issues, franchise systems have demonstrated remarkable resilience and adaptability."

Opportunities for franchising in 2025

Technology Adoption and Efficiency Gains


As franchisors seek to improve operational efficiency, technology adoption will play a pivotal role in 2025. Generative AI, automation and digital transformation efforts, such as mobile ordering and inventory management systems, are expected to reduce costs and improve franchisee profitability. According to a Deloitte survey, businesses across Europe and North America are increasingly exploring AI-driven solutions to manage operational challenges and reduce labor costs​

Deloitte United States.


"The integration of technology into traditional franchise models isn't just a trend – it's becoming a fundamental differentiator," according to Robert Cresanti, former IFA President. "Franchises that successfully blend brick-and-mortar operations with digital capabilities are seeing superior performance metrics."

Health and wellness focus


The rise of health-conscious consumers presents a significant opportunity for franchises to improve performance by embracing health and wellness trends. Franchises in sectors like fitness, healthy eating, and personal care are particularly well-positioned.


But franchises which don't operate in those sectors are also embracing those trends. Fast-food operators and restaurant chains are increasingly offering healthier food and beverage options to align with changing customer values and behaviour. These offerings increase customer retention and often command premium pricing, boosting revenue for franchisees.


And more franchisors are focusing on the mental and physical health of their franchisees as well as their customers, recognising the contribution that wellness-related programmes and counselling make to franchisee performance and satisfaction.

Multi-unit ownership and international expansion


As the economy stabilises, more franchisors are exploring new ways to expand their networks. Some which have traditionally operated single-unit franchisee systems are now offering multiple units or brands to diversify their portfolios. Higher business and consumer confidence and lower interest rates often lead to more aggressive expansion plans for franchise systems, as both franchisors and franchisees are more willing to invest in new locations.


As economies and confidence improve in other countries, domestic franchisors in countries such as China and smaller markets such as New Zealand are now recognising opportunities to explore international expansion.

Expert help to make 2025 your best year ever

I have just returned from Europe and China where I have been working with some of my international clients to develop and improve their business models, systems, capabilities and growth strategies in readiness for what they believe will be a strong year for them in 2025.


As a former advertising executive, marketing manager, franchise CEO and franchisor, I offer advantages that other franchise consultants and coaches don't — more than 30 years' experience in all aspects of franchising, a passion for working with visionary franchisors and their teams, franchisees and customers, and up-to-the-minute insight into innovations, technologies and best practices that are making an impact on franchising and licensing.


Get ready for a better year in 2025 by contacting me to schedule a free Initial Consultation by Zoom, WhatsApp or phone.

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