Article by Laura Darrell, Author of The Principles of Franchisee Success and The Great Resignation
Franchising has long been a path to business ownership for those looking for structure, support, and a playbook for success. But the game is changing, and it’s largely thanks to Gen Z. Unlike their predecessors, this generation isn’t just looking for a business; they’re looking for a purpose-driven business, and they want control over how they shape it. They’re entrepreneurial, fiercely independent, and, let’s be honest, not interested in doing things “because that’s how they’ve always been done.”
Gen Z: The Entrepreneurial Franchisee
Gone are the days when franchisors could expect young franchisees to follow the manual without asking questions. Gen Z wants to know why decisions are made and how they impact their business. They aren’t just investors; they’re innovators. They see franchising as an opportunity to run a business on their terms while leveraging the power of an established brand.
This means that franchisors need to embrace transparency, especially in two critical areas: marketing funds and operational changes. In an era where Venmo transactions are public and Reddit threads expose corporate missteps in real time, Gen Z franchisees expect the same level of openness from their franchisors.
Marketing Funds: Show Us the Money
One of the biggest grievances franchisees have—regardless of generation—is the mystery of the marketing fund. How much is being collected? Where is it going? Why does my local competitor have a billboard, but I don’t? Gen Z is not the “trust us” generation. They want hard numbers, dashboards, and breakdowns of where every dollar is being spent.
Franchisors who embrace this level of transparency will earn trust and improve engagement. If a franchisee knows their marketing dollars are being spent effectively, they are far more likely to actively participate in brand-wide initiatives rather than opting for local, unsanctioned guerrilla marketing tactics (which, let’s be real, they will do anyway if they feel left in the dark).
Operational Decisions: Franchisees Want a Seat at the Table
Gen Z franchisees aren’t interested in a top-down leadership model where they find out about operational changes at the same time as customers. Whether it’s a menu update, pricing shift, or new technology integration, they expect to be part of the conversation. Franchisors need to create collaborative decision-making processes that give franchisees a voice.
This isn’t just good for morale—it’s good for business. The people running the stores every day often have the best insights into what works and what doesn’t. If franchisors want buy-in from their operators, the best way to get it is to ask for their input before rolling out changes that impact their bottom line.
AI: The Game-Changer for Franchisees and Franchisors
Artificial Intelligence (AI) is no longer a futuristic concept—it’s here, and it’s reshaping franchise operations. The question isn’t whether franchisors and franchisees should adopt AI but rather how quickly they can integrate it to stay competitive.
For franchisors, AI can provide data-driven decision-making tools that optimize supply chains, predict customer demand, and fine-tune marketing strategies in real-time. Instead of relying on gut feelings or quarterly reports, AI can offer immediate insights that help drive smarter, faster business decisions.
For franchisees, AI is revolutionizing customer interactions and staffing. AI-driven chatbots can handle customer inquiries; predictive analytics can help with inventory management and smart scheduling software can reduce labor inefficiencies. The best part? It frees up time for franchisees to focus on what truly matters: leading their teams and growing their business.
The Franchisee as the Gatekeeper of Talent
Speaking of leadership, one of a franchisee’s most overlooked yet critical roles is being the gatekeeper of talent. The people you hire are not just employees; they are a reflection of you, your leadership style, and how you want your business to operate. In the age of online reviews and viral customer experiences, the wrong hire can seriously damage a franchise location.
Gen Z franchisees understand that their team isn’t just about filling shifts—it’s about creating a culture that attracts and retains top talent. This means hiring people who align with the business’ values and treating employees as key stakeholders rather than replaceable assets. Franchisors that provide better hiring tools, training programs, and culture-building strategies will win the loyalty of their franchisees—and, by extension, their customers.
The Future of Franchising is Built on Trust
The next decade of franchising will belong to those who embrace transparency, leverage AI, and empower their franchisees as true business partners. Franchisors who cling to outdated, opaque systems will struggle to attract new operators, while those who embrace collaboration, accountability, and innovation will thrive.
Gen Z is redefining what it means to be a franchisee. They are not passive operators—they are entrepreneurs in their own right, demanding a new level of partnership from their franchisors. And frankly, that’s not a bad thing. A more engaged, informed, and invested franchisee is a powerful force for growth. The future of franchising isn’t about maintaining control, it’s about building trust, embracing change, and creating a system where everyone wins.
