Get Found Online. Receive Your Free Site Audit Report
Request Audit
Contact Us Today
1.855.256.2635

Franchise Industry Insights and Trends for 2024

Elizabeth Seigle | February 26, 2024 |
Reading Time: 7 minutes

Staying ahead in the fast-paced world of franchising requires a keen eye on emerging trends and evolving business practices. At IDS, we pride ourselves on keeping a pulse on the latest developments in franchise growth strategies and digital marketing innovations.

As we progress further into 2024, we've rounded up several potential trends franchise brands, operators, developers, sales teams, and marketers might find interesting as the year continues to unfold.

2023 Franchise Trends Recap

Before we dive into the franchise trends you can expect to see across the industry this year, let’s do a quick recap of 2023.

A Stable Franchise Industry

The franchise industry saw stability in 2023, driven by cooling inflation, stabilizing prices, rebounding supply chains, and strong job reports. Despite economic uncertainty, the industry stayed strong, with increases of almost 15,000 units and approximately 254,000 jobs, reaching a total output of $860.1B, a bump of 4.2% over 2022’s data.

Better Work-Life Balance

In addition to fueling employment and driving economic growth, franchising allowed more individuals to follow their passions and leave the corporate world behind as they started their own businesses in 2023. One out of six Americans has embraced entrepreneurship, and with more individuals craving better work-life balance and flexibility as a main driver for their franchise aspirations, this number is expected to rise.

work-life balance

Multi-Unit Boom

Multi-unit development was big for franchises in 2023 as investors and private equity firms took more interest in scalable revenue. Franchisors proactively positioned their multi-unit opportunities for owners to fully leverage proven franchise systems to better adapt to consumer needs, develop strong operating models, and increase levels of efficiency.

Franchising Industry Trends in 2024

As we enter Q2 of 2024, the franchising industry continues to boost economic development, foster entrepreneurship, and facilitate job creation, representing a multi-faceted landscape of entrepreneurial endeavors and business expansion models.

This year is poised to be a year of opportunity and cautious optimism, driven by an increased focus on customer experience and the resurgence of traditional marketing methods. With technological advancements, increased awareness of diversity in franchising, and enhanced franchisee support, it’s clear that franchising’s resilience and adaptability remain foundational pillars in shaping the modern business landscape.

Here are some of the trends and innovations expected to fuel more growth this year:

Economic Cooling = Slower Decision-Making

As the economy stabilizes, the current cool-off period will be met by election-year anxiety. This will slow down new deals, as investors will be more cautious with decision-making. To support growth, franchisors will shift their focus to enhancing franchisee support and profitability.

Increased Adoption and Influence of Technology

With franchisors looking to take advantage of strategic growth, many brands are focusing on adopting and implementing technological advancements. Artificial intelligence (AI) is revolutionizing the business landscape as this technology offers significant competitive advantages when used correctly.

Generative AI has already begun helping the franchise industry, as it allows franchisors and their franchisees to simplify routine tasks with increased efficiency, enhance customer service by deciphering consumer data, assist with training programs and ongoing support, and analyze trends across different industries. Adopting this technology allows franchise brands to focus on strategic planning, brand development, and more growth opportunities.

Continued Focus on Customer Experience

Maintaining customer contact has always been important. In today’s world, customer experience is a key component for many franchise industries as modern consumer preferences shift toward increased value in products and experiences. For franchisors to remain competitive, they must adapt their marketing approach with evolving strategies to foster a strong brand-consumer relationship as they attract and retain customers.

customer journey

. . . And Increased Emphasis on Franchisee Experience

With new leads expected to stay in the funnel longer, franchisors are increasingly emphasizing franchisee support and profitability. Brands are taking a back-to-basics approach to operations, focusing on fundamental skills across all aspects of the business to help existing franchisees support growth. As more franchisors aim to create authentic customer connections, they’ll need to support their franchisees as they play a starring role in building brand loyalty.

Brands are also ramping up efforts to assist franchisees with employee retention to accelerate growth and reduce hiring and onboarding time. Other initiatives that more brands will focus on include:

  • Multi-unit expansion
  • An examination of brand standards and franchise relationships in light of the NLRB's proposed new joint employer rule
  • Increased interest and involvement from private equity

Make a Difference with Marketing

To set themselves apart in the market and foster strong brand-consumer relationships, franchisors, and franchisees should be united in their creative marketing efforts. Increasing focus on human-centric marketing is being seen as a means to cut through the noise and create authentic connections with customers. Conversely, while digital content and AI appear to be leading marketing strategies, some brands are embracing traditional marketing tactics to take a more personalized and direct marketing approach.

Expanded Visibility for Women

Last but certainly not least, a greater number of women in franchising will enter leadership positions. Women will become a bigger driving force in increasing attention to female consumers' needs while also furthering the visibility and importance of women in the franchising community.

Franchise Development Trends 2024

Franchise development was driven by several factors in 2024, mostly centered around budgets and costs. Trends that shaped the development side of the franchise sector included:

Less Dependence on Brokers

Selling is tough when interest rates are high, inflation drives prices higher, and resulting profit margins are limited. Franchisors relied on brokers for franchise recruitment or lead generation when interest rates were low. Yet, now brands are realizing broker sales are no longer worth their high fees and that more lead generation is possible through digital advertising.

Increasing Digital Budgets

With digital advertising becoming the number one source for closed deals, franchisors are decreasing their spending on broker sales to increase their digital marketing strategies. Strong digital marketing strategies can help propel brands forward in 2024, with more companies investing in themselves through PR, digital marketing, and CRM tools.

Battling Rising Costs

Thanks to inflation, the cost of everything related to doing business has increased over the past year. Franchise development was hit hard with increased costs of goods, shipping, real estate, labor, recruitment, advertising, and, in some cases, rising franchise fees. Franchisors are realizing that they need to pivot their target audiences by shifting to more investor-based personas to achieve sales growth.

The Importance of First-Party Data

As we continue gravitating toward a cookie-less future, franchisors will need data and a robust CRM to source leads. First-party data is becoming increasingly significant as a means to understanding your target audience while embracing campaign cost efficiencies. To rise above the competition and ensure your brand is heard above the digital noise highlights the need for an optimized omnichannel approach.

Increased Use of AI

AI is permeating every industry at an accelerated pace, and franchise development is no different. Franchise development has seen the power of harnessing AI to develop and produce more content at a faster rate, underscoring the need to embrace this technology or risk falling behind. However, don’t rely on new technologies too much; humans are still highly elemental to the process.

ai franchise marketing strategy

Higher Recruitment Budgets

It’s no secret that recruitment budgets have continued their upward trend for 57% of franchise brands. As digital marketing continues to consume more of the advertising spend, brands need to track ad spending and its effectiveness while watching and nurturing their recruitment efforts from referrals.

Measuring costs associated with lead generation is a key factor when considering how much franchise brands should allocate to acquire prospective owners. By analyzing this data, brands can manage their costs more effectively to improve their total cost per lead.

Franchise Sales

Franchise sales for 2024 are expected to reach the best year’s results since before the pandemic. Let’s take a look at what’s driving franchise sales for the year ahead:

Increased Consumer Sentiment

With consumer sentiment rising steadily, franchising is poised to continue its upward trend. As job openings decline, remote work opportunities wane, and financial conditions loosen, more new entrepreneurs are expected to move toward becoming their own bosses. Even with interest rates and inflationary pressures as obstacles, franchisors are expressing a positive outlook for business growth in the months ahead.

Evolving Acquisition Routes

The main strategies franchisors currently employ to acquire prospective owners include email and text marketing, paid search, and social media. However, as these options and their platforms undergo significant changes, franchisors will have to develop more ways to reach lead generation goals.

Franchisors can get ahead by embracing lead generation through digital channels, SEO and pay-per-click (PPC) campaigns, social media and franchise portals, broker networks, multichannel media strategies, cross-branding franchises, adapting to rising costs, and more.

Franchise Marketing

Franchise marketing continues to grow as more franchisors invest in digital campaigns to reach prospective franchise owners. No longer an afterthought, a strong digital marketing campaign is a necessary component for robust brand awareness and lead generation.

hyperlocal marketing strategy

Here are some ways franchise marketing is adapting in 2024:

Improving Visibility Through True Multichannel Campaigns

By utilizing a true multichannel campaign, franchisors can improve their visibility through their franchise website, email, social media, apps, and other branded information. Accessibility and consistency across multiple devices are the backbone of multichannel campaigns and critical to spreading brand awareness, generating stronger audience engagement, building long-term loyalty, and reaching prospective franchise owners.

AI’s Growing Role

AI’s expanded use presents many opportunities for franchise digital marketers to streamline operations, engage with more prospective franchisees, and make informed decisions. This technology can help increase overall productivity by adding efficiencies like automation and personalization to create comprehensive management systems for data collection, analytics, and optimization for franchisors as they review their marketing strategies.

franchise marketing strategist using AI tool

Systems Approach to Franchise Marketing

In the spirit of true multichannel marketing, it’s imperative for franchisors and franchisees to employ a systems approach to structure their marketing content. By ensuring brand consistency, franchisors can eliminate inefficiencies between channels and brand strategies, continue to grow their business, and maintain control over brand values, image, and messaging across all channels.

Building Upon 2023’s Growth

With a stable economic environment, an emphasis on work-life balance, and an increase in multi-unit expansions, 2023 marked a year of growth and adaptability. As we navigate 2024, the industry faces new challenges and opportunities. The trends highlighted, from economic considerations to the integration of technology and the emphasis on customer and franchisee experiences, underscore the industry's dynamic nature and reflect a shifting landscape of inclusivity and innovation.

While facing rising costs and shifting consumer sentiments, franchisors are adapting by leveraging digital platforms, embracing AI, and redefining marketing approaches. As franchising continues to evolve, it remains a cornerstone of economic growth, entrepreneurship, and community engagement, promising a future marked by resilience, creativity, and collaboration.

To discover how your brand can leverage digital platforms, embrace AI, and redefine marketing approaches to propel your franchise to unprecedented heights of success, get in touch with a member of the IDS team today, and learn more about our services and how we can help you craft a winning strategy!

About the Author

Elizabeth Seigle
Elizabeth Seigle is a senior content writer at Integrated Digital Strategies, specializing in creating SEO-optimized content for a variety of clients. She stays up-to-date with the latest digital marketing trends and SEO updates to help her clients boost their online presence and stay competitive. Elizabeth is an experienced writer, holding a Bachelor of Arts in Literature from Stockton University and is HubSpot certified in Inbound Marketing and Content Marketing.

Elevate Your Franchise Marketing Efforts

Subscribe to our newsletter today!

Contact IDS!

Are you ready to work with IDS on your new website development project? Contact IDS today to get started

© 2024 Integrated Digital Strategies Powered by Ignite Visibility | Privacy Policy | Sitemap | All Rights Reserved
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram