A 2022 Study on the Impact of Labor Shortages in Franchising



The International Franchise Association (IFA) and FRANdata today released an inaugural annual study on the impact of labor shortages on franchised businesses. Surveying over 200 franchise executives representing 197 brands and approximately 90,000 units, the results show that quality of labor is the number one challenge facing small businesses. The survey also presents the ways franchisors are helping their franchisees address the shortage, highlighting how the franchise business model is uniquely equipped to adapt to today’s challenges.

One of the biggest draws to franchising is the proven business model. Starting a new business from scratch independently requires entrepreneurs to take on every step, where franchising means you have the guidance, experience and systems a franchisor can offer. Entrepreneurs can imagine their business and growth possibilities beyond one single business with this model.

Many companies are making the mistake of compromising the quality of their customer service experiences, by heavily relying on AI – Artificial Intelligence. Nearly four in five people would rather speak to a real person rather than a bot. So, how do you ensure that your customers and prospects always speak with a real person, while maintaining a busy lifestyle as a franchise owner? The solution: a live call answering service, powered by real people.

There are currently a record 11 million job openings in the United States. We’re amid an industry-wide talent shortage. While it’s easy to chalk this up to the pandemic, many franchises (especially those in the hospitality industry), were struggling pre-pandemic—a 2016 report by The Caterer, for example, found 82% of hospitality professionals said it was harder to recruit qualified help than any time in the past. The rise of the gig economy, high turnover among entry-level and low-wage workers, wage debates, and the shrinking number of teens in the workforce are all driving franchise applicant traffic down.

2022 Annual Convention Resources

There are potential changes in 2022 to the FTC Franchise Rule. Last year the Federal Trade Commission held a virtual public workshop as part of its regular review of its regulations and focused on three issues:  (1) Financial performance representations; (2) The use of disclaimers;  and (3) The format of the Franchise Disclosure Document.

Marketing trends are always changing, and it can be hard to keep up. With a dedicated focus on propelling franchise brand growth, All Points Public Relations is tackling these franchise marketing trends using the proven methods we’ve mastered over ten years in business in new, innovative ways.

Franchising had an exceptional year in 2021, and 2022 looks to be another strong year of recovery. Bolstered by both the strengthening labor market and steady consumer spending, franchising is expected to continue to expand, trending upwards with the United States’ overall economic progression, but the pace of the growth in 2022 is most likely to moderate, due to the current headwinds in the economy.

From generating a buzz about your local business to gaining the trust of your target market, good reviews can take your franchise reputation management efforts to the next level. They can also be great at generating conversion and revenue when handled the right way.

Last week the International Franchise Association and Franchise Update Media announced a landmark, 10-year partnership to deliver value, learning and two new franchising events in 2022 and beyond. This partnership accelerates International Franchise Association engagement with members as well as a broader cross section of the global franchising community.