This year, we can expect many of the trends from 2024 to develop further and continue shaping the franchising industry. Franchising remains a dynamic business model and an attractive investment opportunity for entrepreneurs.
With my experience in franchising and my role as Chief Development Officer for a major franchisor, I have put together the following predictions for what I expect to see in the franchise industry in 2025.
Continued Industry Growth
More entrepreneurs are choosing franchising over starting independent small businesses. Many are drawn to the stability, strong success rates, and support systems that franchisors offer to locally owned businesses. In 2024, personal service franchising was expected to reach $46 billion in spending, surpassing the pre-pandemic level of about $42 billion. As entrepreneurship becomes a more appealing and attainable career path, the franchise industry continues to expand.
In the industry our franchise network serves, we are seeing fast-growing demand for services. With the senior population increasing, the need for high-quality senior care has never been greater, creating major opportunities for franchises that specialize in this field. This trend, which gained traction in 2024, is expected to keep growing throughout 2025 and beyond. Home care, senior care, and medical service franchises are well-positioned to meet this rising demand. Across the country, more potential franchisees are stepping up to fill this critical need in their communities.
Advancements in Technology
Franchise businesses are increasingly using technology to improve efficiency and fuel growth. Some of the key innovations to watch in 2025 include:
- AI for Lead Generation: Franchisors are starting to use artificial intelligence to generate leads across their networks. AI is improving how businesses target and attract customers, making it easier to connect with potential clients.
- Operational Efficiency: Automation tools and software are helping franchises run more smoothly, from managing inventory to handling customer service. These advancements free up franchisees and employees to focus on more meaningful tasks, such as building relationships with customers and maintaining high-quality service.
More Young Entrepreneurs Entering Franchising
Franchising is becoming a practical career choice for younger generations. It is no longer just a second career or retirement plan. A big part of this shift is due to the rise of entrepreneurship-focused education programs, which introduce students to the benefits of franchising. For example, the University of Tennessee’s Franchise Certification Program, launched by our founder, provides students with the knowledge and tools needed to succeed in the industry. These programs are preparing young entrepreneurs, bringing fresh ideas, and helping drive innovation in franchising.
Growth of Multi-Unit Ownership
More franchisees are choosing to own multiple units as a way to grow their businesses. This strategy provides several advantages:
- Expanding Reach: Owning multiple locations within the same brand allows franchisees to strengthen their presence in the market and create operational efficiencies. Some franchisors also offer multiple brands that franchisees can invest in, helping them extend their services into new or neighboring areas.
- Diversifying Investments: More franchisees are choosing to invest in franchises across different industries. This approach spreads risk and opens doors for collaboration between businesses, leading to innovation and increased profits.
- Gaining Market Insights: Managing multiple locations or different types of franchises gives owners a better understanding of market trends, customer preferences, and operational challenges. This knowledge helps them make smarter business decisions and stay ahead of industry changes.
Looking Ahead
The franchise industry is set for strong growth in 2025, driven by innovation, shifting demographics, and a growing entrepreneurial mindset across all generations. Whether you are a new franchisee or a seasoned investor, these trends highlight opportunities to succeed. By staying flexible and forward-thinking, the franchise community can continue to thrive in an evolving market for years to come.
Let me know if you’d like any adjustments!