IDENTIFYING & ADDRESSING TODAY’S LABOR CHALLENGES
A 2022 Study on the Impact of Labor Shortages in Franchising
An inaugural study on the impact of labor shortages on franchised businesses by the International Franchise Association (IFA) and FRANdata reveals the availability of qualified labor is the number one challenge facing small businesses today. The study shows how the franchise business model is uniquely equipped to adapt to today's challenges, highlighting the many ways franchisors are helping their franchisees address the labor shortage.
Findings in the report include:
- “Quality of labor” followed by “cost of labor” are the biggest challenges facing franchised small businesses today.
- Nearly all respondents (87.6%) reported franchisees are having trouble finding skilled and unskilled workers.
- 80% of the franchise brands experienced constrained growth due to labor challenges.
- The average number of employees per franchised unit has decreased over the past six months.
- 65% reported employee wages have increased over the past six months, and 66% anticipate wage increases over the next six months.
- The majority of brands have been able to maintain or increase their store operating or production hours over the past six months.
- Most all franchisors are providing assistance to their owners with recruitment and retention.