I’ve read the IFA 2025 Franchising Economic Outlook cover to cover—so you don’t have to. If you’re a franchisor or franchise leader, here are the 10 most important insights you need to know for 2025, backed by data and focused on helping you plan with confidence.
Whether you’re forecasting growth or reviewing your development strategy, these insights can help you stay ahead. As an Outsourced CFO working with franchisors across industries, I can tell you: these trends matter.
1. Franchising Will Surpass 2024 Growth Rates
Franchising is expected to expand by 1.9% in 2025, reaching over 830,000 franchise establishments in the U.S.—an increase of 15,000 units. That’s faster growth than 2024, which was already a rebound year. Remember that franchising often does well in times of economic uncertainty. As we see warning signs of a slowing economy, this could spell growth for the industry.
📈 Key Insight: Franchising is proving resilient, even amid higher interest rates and inflation concerns.
2. Franchise Output Will Exceed $893 Billion
The total economic output of franchises is projected to hit $893.9 billion in 2025, up from $860.1 billion in 2024—a 3.9% increase.
💡 Takeaway for Franchisors: This signals solid consumer demand across sectors, from quick service to personal services. This is a simple way to benchmark your same store growth – is it at least 3.9%?
3. Jobs in Franchising Will Reach 8.9 Million
Franchises are forecast to add over 221,000 jobs, pushing total employment to 8.9 million workers in 2025.
👥 Action Tip: With labor still tight in many sectors, investing in workforce retention and automation tools is essential.
4. Texas and Florida Remain the Franchise Powerhouses
Texas, Florida, and Georgia lead in franchise establishment growth. California, however, has lost ground due to labor laws and rising operational costs.
📍 If you’re expanding: Prioritize states with favorable regulations and population growth. If you have limited sales resources, determine where to strategically deploy them.
5. Personal Services Franchises Are Booming
Sectors like health & wellness, beauty, and pet care are seeing the fastest growth. Personal services will grow 4.7% in units and 6.5% in output—the highest among all franchise types.
💇 Outsourced CFO Tip: Focus on unit economics and recurring revenue models in these high-margin segments.
6. Real Estate and Interest Rates Still Matter
Access to capital remains a limiting factor. Higher interest rates and stricter lending standards have made SBA loans harder to secure for new franchisees.
🏦 Strategic Insight: Explore alternative funding models (revenue-based financing, seller financing) when planning development. Also expect to have to consult with your franchise prospects on how they can best raise the funds they need to get started.
7. Franchisee Profit Margins Are Stabilizing
Margins took a hit in 2022–2023 due to inflation and wage growth but are expected to stabilize in 2025 as pricing power returns and supply chain issues ease.
📊 What to Watch: Encourage franchisees to manage cost-of-goods-sold and labor efficiency—critical KPIs I monitor in every franchise CFO engagement.
8. Multi-Unit Franchise Ownership Is Increasing
Over 54% of franchisees now own multiple units, and that number is expected to rise. This consolidation trend favors franchisors who support scalability.
📁 Franchisor Strategy: Build systems and support models that cater to sophisticated, growth-minded operators. That means concentrating on building better systems around technology, finance, and automation.
9. Technology and AI Adoption Will Define Winners
IFA emphasizes digital ordering, back-office automation, and AI-enabled marketing as key differentiators.
🤖 CFO Advisory: Start measuring ROI on your tech stack now. I advise franchisors to integrate data dashboards and automate financial reporting early.
10. Regulatory Oversight is Tightening
Franchisors should be ready for increased scrutiny on disclosure practices and employment classification. The FTC and state regulators are eyeing more transparency.
⚖️ Next Steps: Ensure your FDDs are airtight and train your development teams on compliant messaging.
Final Thoughts: Why This Matters
Franchising in 2025 is poised for healthy growth, but smart operators are adapting fast—investing in systems, supporting franchisee financial performance, and planning with precision. As an Outsourced CFO, I help franchisors turn data into strategy, financials into foresight, and compliance into confidence.
