Job vacancies and finding quality employees are among key obstacles to franchise growth.
By Andrew Carlo
Labor remains a key obstacle to franchise success, according to a new report from the International Franchise Association (IFA).
The latest Franchisor Survey highlights economic challenges impacting franchises in addition to victories that spotlight growth for the industry.
Released this week, the 2025 Franchisor Survey was conducted in partnership with franchise research and advisory firm FRANdata.
“Over the last five years, the franchise community has demonstrated its resilience in the face of unprecedented challenges, coming out stronger than ever before,” said Michael Layman, IFA Chief Advocacy Officer. “Reflecting the perspective of leaders from across industries and brands of all sizes, the IFA Franchisor Survey offers an illuminating look into the priorities and concerns for the year ahead, which is shaping up to be a time of incredible opportunity and growth.”
When it comes to labor, findings show that 37% of respondents identify the availability, quality, and cost of labor as their top business challenge. About 70% of respondents report that their franchisees have unfulfilled job vacancies. The good news is the number was at 80% in 2024.
Labor is holding back franchises with 56% of brands reporting experiencing constrained growth due to labor challenges, compared to 81% in 2023. Looking ahead, 48% of franchisor executives responding to the survey expect franchisee total employment to increase in the year ahead, and 40% expect it to stay the same.
Earlier this month, the IFA’s annual Franchising Economic Outlook report indicated that—despite political and economic headwinds, including elevated inflation—franchise growth was at 2.2% last year compared to an earlier projection of 1.9% increase.
According to the IFA, franchises could see additional 2.4% growth this year in comparison to a rate of 1.9% growth for the overall economy as projected by the Congressional Budget Office (CBO).
“Franchising is an opportunistic growth model that provides important forecasting signals because it cuts across hundreds of economic sectors,” said Darrell Johnson, FRANdata Chairman and CFO. “What franchisor executives are expecting and how they are adapting to change has implications across the entire business economy.”
The Franchisor Survey encompasses 171 senior executives from 229 brands across 24 different industries that represent over 96,000 units and represent nearly 20% of all domestic franchised businesses.
The IFA works through government relations and public policy, media relations, and educational programs to promote franchising and the approximately 830,876 franchise establishments that support nearly 8.8 million direct jobs, $896.9 billion of economic output for the U.S. economy.
