5 Things that Have Changed in the Franchise Industry
Jul 23, 2025
Last Friday, July 18, we celebrated the American Franchise Academy's 9th Anniversary! As part of the celebration, I had a special LIVE podcast on our YouTube Channel. Along with our instructor and training expert, Curtis Moore, the video highlighted some of the things that have changed in the franchise industry in the last few years.
This industry is very dynamic, and although franchises tend to have a higher success rate than independent businesses, they are still small businesses that are affected by the economic, social, and political issues impacting the US business landscape.
Do you agree with these changes? What else would you include in this list?
But first, don’t forget to subscribe to our YouTube channel and Podcast, and follow us on all social platforms.
1. Competition & Diversity of Franchise Models
Not only the McDonald's and the Burger King's have grown. New and emerging chains are also growing, making the industry more robust than ever.
Franchising has exploded in the last 10 years.
There are over 3,000 franchise brands in the US alone, and according to the IFA’s “2025 Franchising Economic Outlook”, the number of franchise establishments in the country is expected to reach 851,000 units by the end of 2025.
“Look at the chicken category 10 years ago versus now. Before, there were only a few legacy brands, but now, you've got everybody and their brother opening a franchise that's selling some variation of chicken”, said Curtis.
I agree. In recent years, the diversity of business models, industries, products, and services being franchised really amazes me.
There are concepts out there that I never even considered could be a franchise. For example:
- An IV bar, where people receive intravenous therapy to get fluids, vitamins, rehydration, and other nutrients.
- A franchise business that washes out your trash cans once a month.
- The boom of all the home improvement services, which range from lawn care and interior design to pest control and floor coverings.
“In the last 10 years, many new businesses have emerged. People identify new niches and opportunities even within existing franchise concepts. You can hardly name a business nowadays that doesn’t have a franchise for,” said Curtis.
But remember: a franchise is a promise of consistency, and when people go into a franchise, they know what to expect. So, whatever franchise concept there is out there must have a model that franchisees can consistently duplicate over and over again for it to be a proven franchise brand.
Keep learning: 7 Signs You’ve Found a Proven Franchise Brand
2. Costs
Not only has the cost of goods increased in the last 10 years, changing the dynamics of pricing, but some other components within the franchise industry are also more costly than they were before.
For example, the costs of signs, building or remodeling a store, as well as all the equipment, repairs, and maintenance, have risen. “The difference between those costs from 10 years ago to now is astronomical,” said Curtis.
The cost of distribution has also increased. Now, it costs more to get the goods from the distribution center or the supplier to the franchise stores because the costs of gas, diesel, shipping, and labor have also risen.
The minimum wage is another cost that has increased a lot. I remember when I started as a pizza delivery driver, I made $3.25 an hour, which was the beginning rate. Now, the beginning rate is three to four times higher. For assistant managers, it’s almost five times that now.
These factors combined lead franchises to adjust their selling prices, because they have to cover the business expenses. That has caused the average unit sales to go up, although not at the same rate as the costs.
3. Marketing
What used to be word of mouth is now called reviews and happens mostly online.
If you get a bad review on social media, your sales and profitability can really suffer! Before, if a customer had a bad experience with your business, they would tell their close friends and family, and while there would be repercussions, it wouldn't resonate with as many people.
However, a bad review can be seen by thousands of people, and its negative effects could be exponential, not just for a store but for the whole franchise brand.
Your employees’ social media is also an online window to your brand, as they may share their own experience working for the brand or your franchise business. That’s why it would be wise to have policies about what they can share about their jobs to protect your brand and your business.
Your online reputation can also affect your hiring process. Think about it! People often research brands online before applying for a job or attending an interview, and if they find negative information or reviews, it could discourage candidates.
Keep learning: What is your Employer Brand and How to Improve It
4. Technology
In our COMMAND program, we have mastermind calls with franchisees. One of the topics that always comes up in two out of three calls is technology. Mostly, they ask or share recommendations of platforms that do certain tasks.
It's amazing how technology has impacted businesses. One thing that I love about technology is that it really makes us faster, better, and more efficient at some of the things that we do, but then we have to learn how to use that technology and invest in it.
That investment is something else that has changed in the last few years. I don’t remember having a technology cost when we were doing pizza orders by hand, but now, franchisees must pay monthly technology fees as part of their franchise investment.
And they have to make sure that they use it and maximize it. Otherwise, it's like throwing money out there.
How to evaluate if a technology is worth investing in? “If the technology will help you be better, more efficient, faster, more profitable, then let it help you! You must learn how to use it and spend the time to really make the most of it”, he advised.
Once you get over that learning curve, everything else is so much easier.
Don’t miss: The Top 10 Franchisee Challenges (and How to Overcome Them)
A side note: The AFA wouldn't exist without technology! All of our classes and programs are virtual because, nine years ago, when I founded the academy, I realized we needed to overcome the physical barrier since we couldn't bring people out of their stores or states to learn, no matter how valuable the information.
But thanks to technology, we can deliver all our value and knowledge not only in the US but worldwide. We've even had students from abroad! Clients from around 15 countries trust us.
5. Joint Employer Liability
One of the biggest things that I think has changed and that has affected the franchise industry to such a tremendous level is the joint employee liability rules. In fact, the American Franchise Academy would not exist if this particular thing weren’t such an important issue.
Before, a lot of legacy franchise brands used to provide a lot of training and guidance. That was even part of Curtis’s job. But nowadays, the franchisor doesn’t provide any business knowledge or training to their franchisees or their employees because of this joint employee liability.
While these rules don’t prevent franchisors from training franchisees and franchisees team members, what it does say is that if the franchisor gets into the franchisee's business and trains their team members specifically and especially in anything related to employee management, also known as the employee life cycle (recruiting, interviewing, hiring, onboarding, training, disciplining, motivating, termination), they now become a joint employer with that franchisee.
This means that anything that these employees do could cause some sort of liability with the company. It could also mean that a customer could not only sue the franchisee but also the franchisor, because they're going to be considered just as liable for what that employee did, and therefore, they're gonna have to be responsible for it.
This has caused the franchisor to prevent them from being liable for what the franchisee’s employees do.
To not be considered a joint employer, franchisors now don’t provide any type of training or support to the franchisee's employees and even the franchisees in certain areas.
“Everything related to the product, service, and image are the safe topics. But all the business know-how, tips, and tricks, they cannot go there anymore, they just can't do it. Now it’s the franchisee’s responsibility to teach their people”, explained Curtis.
This joint employer has really changed how the franchisors operate and support their franchisees. Even though I know many of them want to go beyond that, this particular law prevents them from it. If they could, they would, but now they simply cannot do so.
This brings back to how good franchises are at training. Even if they go to a class, how much do they actually absorb, and how good are they able to transfer that information, especially when they don’t have enough tools provided to be able to do so?
“They may not be the best person to do the training. They rush because they don't have time or the patience. They have the knowledge, but that's not the key. Training is about transferring the knowledge or the skills to someone else”, said Curtis.
There you go. Those are five changes that have happened in the past few years in the franchise industry.
In summary, the franchise industry is just as powerful, if not more, than it was back 50 or 60 years ago. And we’ve been overcoming all of these changes, and there is still a huge world of opportunity for anyone who wants to make their American dream of business ownership through franchising come true.
The American Franchise Academy has existed for nine years, and going forward, to help you overcome these challenges, especially the joint employer and the lack of training and support from the franchisor. We are here exactly to provide and fill in that void for the franchisees and the team members who are hungry to learn more and be better at what they do every day in terms of leadership and management of the business.
That is what the American Franchise Academy programs have been designed for:
- MANAGE, for Unit Managers and Single-Unit Franchisees running a shift on their own, where we teach them what they need to know to be successful..
- LEAD, designed to help those overseeing multiple units who have never received structured training on how to do that in the most effective way.
- COMMAND, the program that started it all, focused on helping Multi-Unit Franchisees or Franchisees who are getting ready to grow into a multi-unit enterprise, where we provide all of the knowledge, tools, and resources they need to define, document, train, and roll out in their organizations the processes, systems, and procedures they need to manage a multi-unit enterprise successfull, with confidence and profitability.
That's who we are and what we do every day. We are now in the 9th year doing this. There have been hundreds and hundreds of students and participants that gone through our programs, and we continue to get better and improve everything that we do.
Thank you for being part of our history! We have more exciting news in the coming months, so be sure to follow us to discover what we have prepared for you and to strengthen our franchise industry.
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