A Look Back at 2024: The Current State of Franchising

The franchise industry is thriving, continuing to serve as a cornerstone of economic growth in 2024. As more entrepreneurs seek opportunities with established business models, franchises are evolving to meet changing demands and marketplace trends.

While conversations about the economy, inflation, an uncertain real estate market and the potential repercussions of the upcoming election have seemed nearly inescapable, the franchise business model continues to perform.

“With an uncertain time coming up with elections and everything else, there are people looking to invest, and they want to do it now,” said Jodi Boyce, chief marketing officer for Teriyaki Madness. “They want to do it now in case things change. There is definitely a group of people who want to invest in a tried and true, proven concept.”

Resilience Despite Market Circumstances

Franchised businesses aren’t bulletproof, but in many cases, they have years of experience and strategy standing behind them. For franchisees, this provides some extra reassurance that they can survive any economic instability that might come with elections and changing interest rates. For franchisors, this security allows them to maintain system growth.

These circumstances are especially beneficial for franchises in spaces that are already deemed relatively recession-resistant, like home services, wellness and fast-casual dining.

“People always have to eat,” Boyce said. “Being in fast-casual, where it’s not super expensive sit-down, but it’s nicer than quick-service — we’re kind of in the sweet spot there.”

Boyce notes that this is reflected by Teriyaki Madness’s growth for the year; the brand is on track to end the year up to 15% above systemwide sales for 2023.

An Ongoing Focus on Technology and Innovation

Regardless of industry, successful franchisors have continued to focus on innovation, incorporating higher-tech tools to increase efficiency and profitability while creating an even better experience for the customer.

After the newness of artificial intelligence wore off, usage increased and it quickly became a powerful driver for value in business. With the general public becoming more aware of — and comfortable with — the power of AI, franchised brands have been pushed to adapt, incorporating functionality like system-wide data-sharing, smart scheduling and ordering for customers, and automated inventory need predictions.

Franchisees Go with What They Know and Trust

A substantial amount of franchise growth is coming from existing owners. Teriyaki Madness has seen 21% year-over-year growth in open shops, and Boyce says that a notable amount of that expansion has been driven by existing owners.

“We’re seeing a lot of growth internally. Our owners have been running a TMAD long enough to know that it’s proven to work,” she said. “They see that it’s working and want to expand while they can — get in the game before others take that spot.”

This doesn’t mean that it’s impossible for systems to draw in brand-new franchisees, but it does seem that franchisors should maintain a level of focus on their systems to encourage internal growth as owners become ready.

Increased Diversification and Opportunity

Franchising has always offered a less traditional pathway to success and wealth generation. Through the changing economic circumstances of the year, that trend has only become more prevalent. 

Whether it’s in response to layoffs or in preparation for potential career instability, more and more people are turning toward franchising for their next opportunity. Young entrepreneurs, former stay-at-home parents and other often-disadvantaged groups are seeing the opportunity that exists in franchising. As they continue to pursue their dreams of business ownership, the franchise world is only becoming more diverse and will continue to be enriched by the sheer range of life experiences and perspectives represented within it.

Every great franchisee had help buying a franchise. Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit www.1851growthclub.com and start your journey.