Joel Libava
The recently released 2024 International Franchise Association (IFA) Franchisee Survey, conducted by FRANdata, sheds light on the current economic landscape for franchised businesses.
And while signs of moderating inflation are clearly emerging, franchisees continue to grapple with significant hurdles stemming from high operating costs and a downturn in consumer spending.
Another thing, and it’s something that wasn’t covered by the 2024 IFA Franchisee Survey is tariff’s.
As in how would the so-called “Trump Tariff’s” affect franchising if Trump was elected President again?
Now let’s dig in to some of the key finding from the report.
Key Findings From The 2024 IFA Franchisee Survey
The survey revealed that 87% of franchisees are experiencing a moderate to substantial impact from inflationary pressures, mirroring trends from the previous year. The primary obstacles for franchisees include managing escalating costs and declining customer demand.
As a direct result, 80% reported lower business earnings over the past year.
Interestingly, while labor concerns have become less pressing—dropping from 47% of respondents citing it as a major challenge in 2023 to 26% in 2024—the costs associated with retaining staff remain steep, particularly in healthcare. This shift indicates a potential easing in labor shortages, yet the financial burden of employee retention persists.
Franchise Business Costs
On costs, the percentage of franchisees expecting further cost increases remains high, rising from 51% in 2023 to 65% this year
Rising expenses across various sectors, such as insurance, inventory, supplies, and marketing, have further exacerbated the financial strain on franchise operations.
And the food industry has been particularly hard hit by inflation, followed closely by personal services and commercial/residential services.
2024 IFA Franchisee Survey: Adapting To The Challenges
In response to these challenges, many franchisees are adopting innovative strategies.
While raising prices remains the most prevalent method for addressing increased costs, franchise owners are also leveraging new technology to enhance operational efficiency. This adaptability is crucial in a climate where traditional methods may no longer suffice.
Moreover, the survey underscores the importance of collaboration within franchise networks.
Franchisees who share best practices and engage in customer marketing initiatives find themselves better equipped to navigate inflationary pressures compared to their independent counterparts.
2024 Franchisee Survey Conclusions
The 2024 IFA Franchisee Survey, which surveyed over 1,400 franchisees from various business sectors in July 2024, highlights the resilience and adaptability of the franchise community in the face of ongoing economic challenges.
So, by embracing innovative solutions and fostering collaboration, franchisees can better position themselves to thrive amid uncertainty.
For a comprehensive understanding of these findings and more, be sure to check out the full report here.
Because as franchising continues to evolve, staying informed and up to date on franchising industry trends will be key to overcoming the hurdles ahead.
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