While much of the due diligence you do before investing in a franchise is about the franchise itself, there’s value in zooming out and looking at the market as a whole, too. The recent 2025 International Franchise Association (IFA) Franchisor Survey is one resource I trust to offer those insights.
The 2025 report gives a compelling and optimistic outlook. Despite the ongoing economic headwinds that many sectors are navigating, the report paints a picture of resilience, strong relationships, and significant growth potential within the franchising model. Those takeaways are encouraging because they show that it isn't just about weathering a storm; it's about emerging stronger and embracing the many opportunities that lie ahead with franchising. Let’s look closer.
Strong Franchisor-Franchisee Relationships
At the heart of any successful franchise system lies the connection between the franchisor and the franchisee. The IFA survey underscores the strength of these bonds, with a remarkable 85% of franchisor executives reporting a positive or very positive relationship with their franchisees. This stat speaks volumes about the collaborative spirit that defines the industry.
In a business landscape often characterized by competition, this emphasis on partnership provides a significant advantage. It's a testament to the understanding that mutual success is the ultimate goal, fostering an environment of open communication, shared goals, and collective growth.
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Growth Indicators Point to a Vibrant Future for Franchising
Beyond the strong interpersonal dynamics, the survey reveals encouraging signs for franchise expansion. Nearly half of the franchisor executives surveyed (48%) predict an increase in franchisee employment in the coming year. 40% expect employment levels to remain stable. These figures represent real job creation and economic activity within local communities. Better yet, they show the continued steady growth inside the industry.
Another promising success indicator is the projected industry growth. The IFA survey projects a 2.4% growth for franchises in 2025, outpacing the broader U.S. economy's projected growth of 1.9%. This growth is expected to add approximately 210,000 jobs, bringing total franchise employment to over 9 million. Total franchise output is projected to exceed $936.4 billion, a 4.4% increase from 2024. As an aspiring franchisor, that promise of a strong workforce and output is promising.
Key Growth Sectors and Regional Trends for Franchises
Retail franchises, restaurant franchises, and service franchises are expected to be the fastest-growing industries in 2025 with growth hovering over 4% in each one.
Several factors contribute to this positive outlook. Easing inflation and declining interest rates are creating a more favorable economic climate for franchise expansion. Strong consumer demand and business-friendly policies, particularly in the Southeast and Southwest regions, are also fueling growth. In fact, the Southeast and Southwest regions are expected to experience the most significant franchise growth, driven by business-friendly policies and lower costs of living. The top 10 fastest-growing states for franchises in 2025 are projected to be: Georgia, North Carolina, Virginia, Arizona, South Carolina, Pennsylvania, Tennessee, Florida, Colorado, and Maryland.
More Than Survival: Franchising is Thriving
The overarching message from the IFA survey is one of robust resilience. Franchises aren't simply holding steady amidst economic uncertainty; they are actively seeking and capitalizing on opportunities for expansion and innovation. This proactive stance, coupled with the inherent support structures within a franchise system, positions the industry for continued success. It's a compelling narrative for entrepreneurs seeking a proven business model and for those looking to expand their existing businesses through franchising.
The 2025 IFA Franchisor Survey offers a refreshing dose of optimism. The strong relationships between franchisors and franchisees, coupled with promising growth projections, paint a bright future for the industry. Franchising stands as a testament to the power of collaboration, adaptability, and the enduring entrepreneurial spirit. It's an exciting time to be a part of this dynamic and evolving landscape.
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Kimberly Crossland is the founder of Roadpreneur and Cruisin' + Campfires, two companies designed to keep families together and living in freedom through travel and entrepreneurship. The goal of both businesses is to inspire meaningful change through the power of a strategic, thoughtful approach to life and business. In her free time, you can find her looking for a new adventure together with her two boys.