By Khadija Cochinwala, FRANdata

The franchised automobile industry largely encompasses sectors focused on the automotive aftermarket segment including general repair and maintenance of vehicles, auto detailing & car washes, auto parts retailing, appearance & restoration services, used/new auto rentals and leasing, tire stores and gas stations.

The majority of the brands in the industry belong to the general auto repair services sector (40.3 percent) offering services such as transmission, auto body repair, brake services, oil-changes etc. In 2025, the gas stations sector had the highest average franchised unit count exceeding 700 units. Between 2023 and 2025, FRANdata recorded more than 130 active franchised brands with a 3-year unit growth of 1.8 percent and operating more than 19,100 units.

Growth Drivers and Trends

The 2026 IFA Outlook projects stable growth for the automobile industry with output reaching $41.3 billion, up 0.5 percent from 2025. With higher new-car prices (averaging $45,000), consumers are keeping their existing vehicles, with an average age of 13 years, sustaining the demand for repair services. Rising EV/hybrid adoption and implementation of Advanced Driver Assistance Systems (ADAS) in vehicles is accelerating the need for tech‑intensive diagnostics, favoring expertise of franchised networks over independent operators. Supply‑chain disruptions have driven franchisees to diversify and onshore while carrying higher inventories. Franchises are actively incorporating AI in customer service, inventory, and product development while technology-enabled scheduling, digital inspections, and membership-style offerings are improving customer retention and operational efficiency.

Industry Pressures

Current industry challenges include technician shortages and retention while keeping up with evolving vehicle technology, especially EVs and advanced diagnostics. Franchisors are also facing margin pressures with rising real estate, equipment, and compliance/insurance related costs. Inflationary pressures are driving value-seeking customers towards lower‑cost parts and services without compromising on quality expectations, thereby forcing franchisees to offer adaptive pricing while simultaneously increasing market competition.

Outlook

The demand for automotive services remains steady due to an aging vehicle fleet and consumer need for essential maintenance. Customers prefer trusted national franchised brands over independent shops because of standardization, pricing transparency, and warranties. While labor shortages persist, operators are attracting talent by upgrading compensation and boosting training opportunities. In 2026, with disposable-income growth slowing, franchises that emphasize value, reliability, and distinctive services will be better positioned to succeed.

Khadija Cochinwala is a research analyst at FRANdata. She is part of a team of analysts who measure, track, and analyze franchisor performance. She graduated with a degree in Communications and enjoys gardening and visiting exotic destinations around the world whenever she isn’t researching data. For more information about IFA supplier member FRANdata, please visit www.franchise.org/suppliers/frandata.