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We are halfway through 2016, and the franchise industry continues to hum along &#8211; as we near the November election and begin to look ahead to 2017. So how has the first half of the year fared for those in franchising? 1851 Franchise spent time with FRANdata CEO Darrell Johnson to get an overview of the industry as we close Q2 and enter Q3. This is part two of that discussion. <a href="http://1851franchise.com/details/5024/Halftime-Analysis-Where-Does-Franchising-Stand-in-2016-">You can read the first part here.</a> What are the segments and industries within franchising that are performing the best, and are seen most favorable by lenders right now? The industries that are in higher demand in food are fast casual or QSR type of restaurants, quicker food and quicker service &#8211; and in the non-food sectors it&#8217;s being driven by demographics like senior care and health care services, as well as fitness and lifestyle brands aimed at millennials. The US population distribution is shaped like a barbell where you have a big baby boomer generation on one side and then a big millennial generation on the other, and a considerably smaller age demographic in between. Therefore millennials are driving a lot in the QSR, fitness, and specialty type of businesses and the baby boomers are driving health care and fast casual dining (which is a little more relaxed than the QSR concepts). We are seeing an increase in the number of new brands on a year-to-year basis &#8211; there are about 300 new brands that will join the franchising fray this year. Some are spin-offs from established brands, and some are brand new out of the ground trying to build their business model. You get a good indication of which industries are growing from how many new brands are entering them as well as from the number of new units being added within those sectors. That also leads to a lot of questions for new brands about how to go about their growth. For new brands, they want to understand the operational side &#8211; what should they expect across their system to determine how to invest in certain areas. What should they invest in now that is going to provide the most benefit in the long run. What should new franchisors focus on, and how is FRANdata helping guide them? There are 11 functions that a franchisor is responsible for &#8211; they have to do development, find new franchisees, train them, have involvement in site selection and the preopening side, compliance, legal, marketing &#8211; and more. When they are a beginning franchisor they are resource constrained, oftentimes more from the human resources than capital resources &#8211; and oftentimes both. If I have four units and four franchisees &#8211; how much do I need to devote to training and field support versus if you have 14 units. When do you need to hire more training folks? When do you need to scale from an operational standpoint? Those are daily operational tactical questions that impact their brand over time. If they have one unit underperforming, they will spend a disproportionate amount of time focused on fixing that one location rather than focusing on growth. Better information and advice on how others have worked through those types of situations will help them out &#8211; and that&#8217;s one of the things we can provide them. In the other sense, what should existing franchisors focus on now &#8211; and how is FRANdata helping them? There has been a lot more emphasis on comparative performance, and I think that&#8217;s a byproduct of the sluggish economy. If it was a better economy, they would be more focused on growth than operational efficiencies. In order to get a better outcome overall, there is much more emphasis on performance. In this type of economy getting more revenue comes, to a greater degree, on taking away market share from competitors. They also need to squeeze expense dollars without hurting their system. We do much more work in recent years on metrics that deal with performance. If you&#8217;re on the board of directors of a franchisor &#8211; what part of the organization are you overspending or underspending on? Where could they operate better and improve ROI? Which decisions are going to impact things more favorably or adversely over time? That is where data and research from FRANdata can help guide all of those decisions. What are you most excited about for FRANdata in the near future? It comes down to two words: performance matters. The reason I&#8217;d use those two words is that franchising is under attack. There are parts that are working well and other parts that aren&#8217;t working well. To understand all of that, there has to be performance measures and metrics to help us understand it. There is only one company in the U.S. that is absolutely centered on that and strengthening the business model of franchising &#8211; and that&#8217;s FRANdata. We are disentangling the data and providing advice and insight that&#8217;s leading to enhanced performance. If you want a business model more impervious to attack, execute the business model better. It&#8217;s a great business model, but it&#8217;s not always well executed and identifying good from bad is important, as is studying the ways it has worked best in your industry so that a franchisor can build on top of that. We&#8217;re going to improve the business model of franchising by staying on the course we&#8217;re on. What issues will be most important this election season? There are issues that will directly impact all franchise businesses and weaken the business model for franchising as a whole. The model has proven time and time again its ability to adjust and adapt. The NLRB is a significant but not a catastrophic issue for franchising. It may weaken the business model and hurt small businesses, people and families in the process &#8211; but the model will adapt. It&#8217;s a pliable business model, so the NLRB won&#8217;t be catastrophic but it likely will weaken the model as franchisors are forced to pull back from support that otherwise would help franchisees succeed. However, there are issues that impact the ability for the franchise model to operate on a fundamental level. The overtime issue is a good example. If you basically double the exemption level, you create a domino effect across a whole business. This isn&#8217;t just franchising, it&#8217;s business in general. We&#8217;re going to create a much higher cost for all businesses. Either returns on capital over time become less appealing so you have fewer businesses starting, growing and expanding, and/or you accelerate the tradeoff of capital for labor. It&#8217;s similar to the kiosks found in fast food restaurants. When you have something that is dramatically changing operations like that &#8211; franchising can&#8217;t adjust without a fundamental substitution of capital for labor. You put a kiosk in, you let a person go. You end up with less labor as a result of something like the overtime rule. That&#8217;s an example of one where the franchise business model has no other way to address it. Part-time labor is often a step toward full-time employment and in the franchise business model, is accompanied with training that can lead to career development. Arbitrarily changing the exempt level will most hurt the people it is intended to help: unskilled and inexperienced. In small business, when you create anomalies and disparities around minimum wage and overtime rules, you get unintended consequences. We&#8217;re heading down a path where one of the biggest job training programs in America &#8211; franchising &#8211; is about to get undermined by good intentions that are misdirected. This isn&#8217;t political rhetoric. It&#8217;s common business sense.

Darrell Johnson | Halftime Analysis | 1851 Franchise

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1851 Franchise Talks with FRANdata CEO Darrell Johnson About the State of Franchising Entering Q3


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KKR Nears Deal for Nothing Bundt Cakes at $2 Billion

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Prince St. Pizza Partners With Dave’s Hot Chicken Franchisee for National Growth

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KKR to Acquire Nothing Bundt Cakes in $2 Billion Deal -  1851 Franchise

KKR to Acquire Nothing Bundt Cakes in $2 Billion Deal

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FTC Settlement Puts New Focus on Franchise Disclosure Standards - 1851 Franchise

FTC Settlement Puts New Focus on Franchise Disclosure Standards

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Applebee’s Franchisee Files for Bankruptcy as Dine Brands Moves to Acquire 53 Units - 1851 Franchise

Applebee’s Franchisee Files for Bankruptcy as Dine Brands Moves to Acquire 53 Units

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<a href="https://princestreetpizza.com/">Prince St. Pizza</a> has partnered with a&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-daves-hot-chicken-franchise-costs-fees-profit-and-data-2723529">Dave’s Hot Chicken</a> franchisee to support its national expansion,&nbsp;<a href="https://www.pizzamarketplace.com/news/prince-st-pizza-partners-with-daves-hot-chicken-franchisee-for-national-expansion/#:~:text=Prince%20St.%20Pizza%2C%20a%20New%20York%2Dbased%20pizzeria,the%20country%2C%20according%20to%20a%20press%20release.">Pizza Marketplace recently reported</a>. The New York-based brand has joined forces with&nbsp;<a href="https://www.linkedin.com/in/lawrencekourie/">Lawrence Kourie</a>, founder and largest franchisee of Dave’s Hot Chicken, to grow its footprint across the country. Kourie’s experience opening and operating locations in multiple markets will help the brand as it enters new territories."Lawrence has built and operated one of the fastest-expanding restaurant concepts in the country, but what stands out is his disciplined approach to growth and brand integrity," said&nbsp;<a href="https://www.linkedin.com/in/lawrence-longo-342856/?skipRedirect=true">Lawrence Longo</a>, CEO of Prince St. Pizza. "He understands how to develop a concept without losing what made it special in the first place, which is critical as we enter this next phase."The expansion will use Kourie’s existing infrastructure and operations to introduce Prince St. Pizza into new markets. Each location will aim to reflect the same experience as the brand’s original Nolita shop."I have spent years evaluating restaurant concepts, and it is rare to find one that delivers both a strong product and a clear identity," Kourie said. "What Prince St. has built is difficult to truly replicate. The focus now is on growing the brand in a way that preserves that foundation while introducing it to new communities."Kourie is a key operator within the Dave’s Hot Chicken system,&nbsp;<a href="https://1851franchise.com/daves-hot-chicken-sold-to-roark-capital-in-1-billion-deal-to-fuel-global-expansion-2729557#stories">which Roark Capital acquired in a $1 billion deal in 2025</a>. The partnership connects Prince St. Pizza to an operator with experience scaling a brand that has attracted major private equity investment.Read the full article&nbsp;<a href="https://www.pizzamarketplace.com/news/prince-st-pizza-partners-with-daves-hot-chicken-franchisee-for-national-expansion/#:~:text=Prince%20St.%20Pizza%2C%20a%20New%20York%2Dbased%20pizzeria,the%20country%2C%20according%20to%20a%20press%20release.">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

Prince St. Pizza is teaming up with a leading Dave’s Hot Chicken franchisee to expand nationwide, tapping proven operator experience to drive growth.

According to a&nbsp;<a href="https://www.businesswire.com/news/home/20260312305776/en/RF-Expands-Residential-and-Commercial-Services-Portfolio-with-Investment-in-Precision-Garage-Door-Service-Franchisee">recent release</a>,&nbsp;<a href="https://rf-partners.com/">RF Investment Partners</a>, a group focused on flexible capital solutions and value-add support to lower-middle-market businesses, has teamed up with&nbsp;<a href="https://www.burlingtoncp.us/">Burlington Capital Partners</a>, a group focused on family, founder and operator-owned lower-middle-market businesses, to acquire a prominent multi-territory&nbsp;<a href="https://franchise.neighborly.com/precision-door">Precision Garage Door Service</a> franchise.The investment marks the seventh platform for RF within the service space. Precision Garage Door Service, which is part of the larger&nbsp;<a href="https://www.neighborly.com/">Neighborly</a> ecosystem, specializes in the installation, maintenance and repair of garage doors.&nbsp;“We are proud to partner with management and the Burlington team to support continued growth by investing in people and operational excellence,”&nbsp;<a href="https://www.linkedin.com/in/peter-fidler-6787143">Peter Fidler</a>, managing partner and co-founder of RF Investment Partners, said in the release. “The sector continues to present compelling opportunities given the essential nature of garage door repair, and we look forward to building on Precision’s strong foundation to drive long-term value.”This deal is part of the broader trend toward institutionalized multi-unit and multi-territory operators. Previously, franchising was largely viewed as the place for “mom-and-pop” businesses. And while franchises remain small, local businesses, the aggressive entry of private equity firms focused on operators (franchisees) rather than the brand (franchisor) is bringing new energy to small business ownership.Read the full release&nbsp;<a href="https://www.businesswire.com/news/home/20260312305776/en/RF-Expands-Residential-and-Commercial-Services-Portfolio-with-Investment-in-Precision-Garage-Door-Service-Franchisee">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

Design with Precision Garage Door Service team members

The strategic investment marks the seventh residential services platform for RF and reflects a growing institutional desire for high-potential, operator-led franchises.

RF Investment Partners and Burlington Capital Join Forces to Acquire Top Precision Garage Door Franchise

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<a href="https://kbpbrands.com/">KBP Brands</a>, the multi-brand franchisee group with over 1,100 restaurants across 32 states,&nbsp;<a href="https://www.prnewswire.com/news-releases/kbp-brands-doubles-down-on-sonic-with-78-restaurant-acquisition-302695591.html">has announced</a> its acquisition of 78 additional SONIC units. The new units are spread across Ohio, Kentucky, North Carolina, Tennessee and Virginia.This is the second SONIC acquisition KBP has completed in less than two years, and it makes KBP the fourth-largest SONIC franchisee in the system with 164 total locations across eight states.“We’ve had a successful five-year partnership with Inspire Brands and have seen strong results from our initial SONIC purchase,” KBP CEO&nbsp;<a href="https://www.linkedin.com/in/mike-kulp-820820">Mike Kulp</a> said in a statement. “We look forward to expanding that with a larger footprint and additional operational efficiencies.”KBP is one of the country’s largest franchisee groups, reporting approximately $1.5 billion in annual sales across its portfolio, which includes KFC, Taco Bell and Arby’s, another Inspire Brands franchise."Our relationship with KBP Brands continues to grow due to their operational excellence and our shared commitment to guest satisfaction and a culture that champions innovation," said&nbsp;<a href="https://www.linkedin.com/in/john-kelly-b48426b">John Kelly</a>, brand president at SONIC. "KBP's expansion with SONIC demonstrates their dedication to our vision and the brand's long-term growth."Read the full press release&nbsp;<a href="https://www.prnewswire.com/news-releases/kbp-brands-doubles-down-on-sonic-with-78-restaurant-acquisition-302695591.html">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

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The franchisee group, which already operates over 1,100 units, is growing its portfolio with the quick-service brand, becoming one of SONIC’s largest franchisees.

KBP Brands Acquires 78 SONIC Locations Across Five States

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The&nbsp;<a href="https://www.franchise.org/">International Franchise Association</a> has released its annual&nbsp;<a href="https://www.franchise.org/franchising-economic-outlook/">Franchising Economic Outlook</a> report for 2026, painting the picture for a positive year of growth after notable economic turbulence in 2025.“The resilience of franchising has enabled our model to adapt, endure and thrive in the face of challenging macroeconomic headwinds,”&nbsp;<a href="https://www.linkedin.com/in/matthewhaller">Matt Haller</a>, IFA president and CEO, said in a release. "After a year of recalibration, franchising is better positioned to navigate an improving economic environment than independent businesses due to tax certainty, lower interest rates and investments in AI that will propel brand growth, franchisee unit-level economics and wage growth for the franchise workforce."The report features key industry projections for the year, including:<ul><li>The addition of over 12,000 new franchised businesses</li><li>The addition of over 150,000 jobs — meaning the industry will represent nearly 8.9 million jobs</li><li>An increase in total franchise GDP from $549.9 to $558.4 billion</li><li>An increase in multi-unit ownership as current single-unit franchisees pursue scale</li></ul>In addition to the strength of the industry as a whole, the organization highlighted segment-specific trends.&nbsp;<ul><li>This year, child services and commercial and residential services are recognized as top performers, expected to achieve a 3.2% year-over-year growth rate.</li><li>A focus on experiential dining, rather than value alone, may drive full-service restaurants to outpace quick-service brands in output growth.</li><li>Preventive health care has risen to be the third-largest franchised industry, and it represents strong opportunities as consumer awareness surrounding preventive health care persists.</li></ul>In terms of growth markets, Texas continues to lead the country as the fastest-growing state for franchising, followed by Florida, Georgia, Arizona and North Carolina. Michigan, Ohio and Utah have joined the top 10 this year thanks to their relative affordability and the potential they offer for market leadership and long-term growth.The outlook for 2026 is upbeat, and the drivers behind it look different than they did a few years ago. More brands are putting AI and automation to work in day-to-day operations, which helps franchisees move faster on basics like scheduling and inventory and stay tighter on margins.The growth in multi-unit ownership points to a shift in how people are approaching franchising. More operators are treating it like a scalable investment, focused on building an asset, not just buying themselves a job.As the year ramps up, IFA’s data suggests growth in 2026 will be driven by those leveraging the scale of the franchise model, embracing a tech-forward approach to business ownership, and staying agile in an evolving business landscape.Find the full 2026 Franchising Economic Outlook report&nbsp;<a href="https://www.franchise.org/franchising-economic-outlook/">here</a>.

Highlighting child services and commercial and residential services as top performers, the organization predicts the industry will add over 150,000 jobs and increase its GDP by billions this year.

IFA Releases 2026 Franchising Economic Outlook Report, Predicting Over 12,000 New Franchised Businesses This Year

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How much can franchisees make? It’s a question many prospective owners ask before investing in a franchise. While earnings tend to be driven by variables such as industry, location and general management skills, a proper understanding of the key factors driving profitability can help franchise owners develop expectations that are realistic.&nbsp;Multi-unit franchisee&nbsp;<a href="https://www.linkedin.com/in/mangesh-patel-9368569/">Mangesh Patel</a>, who’s readying the launch of six&nbsp;<a href="https://www.beefobradysfranchise.com/">Beef ‘O’ Brady’s</a> restaurant locations in the Macon, Georgia area, shares insights from his franchising experience.<h2>Understanding Franchise Income</h2>Keeping operational costs in check can have a major impact on overall earnings. Taking a proactive approach to expenses such as food and labor, as well as payroll and scheduling, can help align actual franchise income with general expectations for the business.“I just had a meeting with a couple of people, and they said, ‘You talked about a 25% profit margin, but I’m only doing 12%.’ So, I looked at the figures they sent me,” Patel said. “Their&nbsp;<a href="https://1851franchise.com/calculate-restaurant-franchise-profit-2730476">restaurant</a> food cost was running at 37%, which should be around 30%. The national average is about 32%. If I do things correctly, my average food cost needs to be at or below 30%. And payroll should run around 18%. But many people run 25 to 28%.”So,&nbsp;<a href="https://1851franchise.com/unraveling-franchise-earnings-how-much-can-you-really-make-2723935">how much can franchisees make</a>? Here are five areas to consider.<h2>Practical Tips for Prospective Franchisees</h2><ol><li>Control Costs From Day One:&nbsp;It’s important to monitor payroll, food and supply costs closely. Overstaffing and inefficiencies can quickly reduce profits.</li><li>Plan For The Opening Surge:&nbsp;Traffic within the first few months of opening is likely to be higher. It’s important to adjust staffing and inventory accordingly, and pay close attention to how those levels change as time goes on.</li><li>Invest In Training:&nbsp;Properly trained workers can help reduce waste and improve overall service, which has a direct effect on net income.</li><li>Understand Your Market:&nbsp;Each market is unique and revenue potential will vary depending upon location, demographics and competition.</li><li>Track Metrics Regularly:&nbsp;Food cost percentages, labor ratios and weekly sales data act as key indicators operations may need to be adjusted.</li></ol><h2>What Profitability Really Comes Down To</h2>Patel notes that if franchise owners manage labor and costs properly, it’s not impossible to achieve strong cash flow even in the first year, bucking some franchising trends.So,&nbsp;<a href="https://1851franchise.com/how-much-can-you-make-as-a-franchise-owner-2724761">how much can franchisees make</a>? While results tend to vary, careful planning, disciplined operations and a proactive approach to assessing initial costs are essential. But by grasping and guiding the elements that drive franchise profitability, franchise owners can maximize overall business earnings, scaling a business that’s sustainable financially over the long term.Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our&nbsp;<a href="https://1851franchise.com/power-rankings">Power Rankings</a> to read more on brands making moves.

How much can franchisees make? This guide explains what drives franchise earnings and how to manage costs, with expert tips from multi-unit owner Mangesh Patel on maximizing your franchise income.

How Much Can Franchisees Make? A Guide for Prospective Franchise Owners

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Beef 'O' Brady's Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: Beef ‘O’ Brady’s is a family sports pub concept built around community, casual dining and lifelong local loyalty.

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Franchise Opportunity Deep Dive: A purpose-driven swim instruction and aquatics management franchise offering at-home, indoor and community-based swim programs.

urSwim Franchise Costs, Fees, Profit and Data for 2026

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Amada Senior Care Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: Amada Senior Care is a non-medical home care, assisted living placement, and related senior-support services with multiple revenue streams.

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Visiting Angels Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: Visiting Angels is a senior home care franchise focused on in-home support for seniors and individuals with disabilities.

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Franchise Opportunity Deep Dive: A fast-casual restaurant brand serving made-from-scratch sandwiches, salads, soups and pizzas rooted in Southern hospitality.


Halftime Analysis: FRANdata CEO Darrell Johnson Explains Where Franchising Stands in 2016

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