The International Franchise Association (IFA) today released its first annual survey on the impacts of inflationary pressures on franchised businesses. The survey, conducted by FRANdata, revealed that inflation is having a moderate to significant impact on 90 percent of franchised businesses, but being part of a franchise system has helped these businesses navigate rising prices. The report shows that the lodging sector, quick-service restaurants, and child-related services are the most impacted by inflation.

Key findings include:

• 90% of franchisees are experiencing a moderate to substantial inflation impact.
• The most impacted sectors include lodging (90%), quick-services restaurants (83%), and child-related services (61%), which report a substantial increase.
• 89% of units have had to raise their prices of goods and services to absorb cost increases.
• Sixty-four percent of respondents reported lower earnings due to rising prices, with quick-service restaurants, retail stores, and the beauty-related industry being the top three industries to feel the impact on their bottom line.
• The most significant cost increases are driven by rising fuel prices, increases in labor cost and inventory costs.
• 60% of franchisees expect increases in cost to get worse in near future.
• 92% of franchisees with 11+ units say growth is constrained by labor issues.
• Sharing best practices is one of the biggest advantages of the franchise system during a time of rising prices, followed by customer marketing, buying supplies, and resolving supply chain issues.

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