2024 IFA Annual Franchisee Survey
The 2024 IFA Franchisee Survey, conducted by FRANdata, provides a detailed analysis of the economic conditions on franchised businesses. While recent data show moderating inflation, the 2024 report shows franchised businesses have faced significant challenges over the past year due to persistently high operating costs and a slowdown in consumer spending. The report also shares some franchise sentiments on disclosure and tax policy.
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Key findings from the report include:
- 87% of franchisees are experiencing a moderate to substantial impact from inflationary pressures, consistent with the previous year.
- The biggest challenges facing franchisees today are managing costs and inflation and slowing customer demand. As a consequence of these factors, 80% of franchisees experienced lower business earnings in the past year.
- Labor concerns have eased (47% of respondents cited labor as a significant challenge in 2023 vs. 26% in 2024) but the cost of retaining labor remains high, especially in employee health care.
- Rising expenses for insurance, inventory, supplies, and marketing have driven cost increases.
- The food industry has been the hardest hit by inflation, followed by personal services and commercial/residential services.
- While increasing prices is the most common approach to managing rising costs, franchisees have adopted innovative strategies, such as implementing new technology to enhance operational efficiency.
- In the face of these challenges, sharing best practices within the franchise network and customer marketing provides remain valuable to franchisees in coping with inflation – as compared to not being part of a franchise system.
This is IFA’s third Annual Franchisee Survey looking at the impacts of today’s economic challenges, conducted in July 2024 from over 1,400 franchisees nationwide across business lines.
