Key findings from the report include:

• 87% of franchisees are experiencing a moderate to substantial impact from inflationary pressures, consistent with the previous year.
• The biggest challenges facing franchisees today are managing costs and inflation and slowing customer demand. As a consequence of these factors, 80% of franchisees experienced lower business earnings in the past year.
  • Labor concerns have eased (47% of respondents cited labor as a significant challenge in 2023 vs. 26% in 2024) but the cost of retaining labor remains high, especially in employee health care.
  • Rising expenses for insurance, inventory, supplies, and marketing have driven cost increases.
  • The food industry has been the hardest hit by inflation, followed by personal services and commercial/residential services.
• While increasing prices is the most common approach to managing rising costs, franchisees have adopted innovative strategies, such as implementing new technology to enhance operational efficiency.
• In the face of these challenges, sharing best practices within the franchise network and customer marketing provides remain valuable to franchisees in coping with inflation – as compared to not being part of a franchise system.

This is IFA’s third Annual Franchisee Survey looking at the impacts of today’s economic challenges, conducted in July 2024 from over 1,400 franchisees nationwide across business lines.