Recession Ready? New Study Reveals How Franchisors Feel Heading Into 2023

Recent FranConnect data shows how an impending recession could impact franchising in the new year. 

Franchise sales data for Q3 2022, compared with the same quarter in 2021, supports the probability that we are entering a similar cycle to what we saw during the Great Recession, Franchising.com reports. In 2021, there was a decline in leads of 22%, but franchise sales actually increased by 12% year-over-year. 

However, the following FranConnect data shows how some deals are being pushed back in these uncertain economic times: 

• Q3 2021 total leads: 314,430
• Q3 2022 total leads: 195,213
• YOY Change: ?119,217; ?37.92%
• Q3 2021 closed deals: 3,265
• Q3 2022 closed deals: 2,053
• YOY Change: ?1,212; ?37.12%

On the flip side, franchisors do appear to be more bullish in regard to system-wide franchise sales in 2023: 

• 33% of franchisors anticipate a sales increase of 1% to 5% in 2023
• 30% of franchisors anticipate sales up 6% to 10% in 2023
• 20% anticipate their franchisees’ revenues will increase by 11%
• Only 6% in total believe that they will be negative, between 1% and 5%
• And 6% believe that they will be negative between 6% and 10%

Read the full article on Franchising.com. 

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