State of the Franchise Industry 2025

Here’s a look at the state of the franchise industry in 2025.

If you’re new to the franchise world, below is an overview of the players, trends, and more across the industry. 

This is not a fully comprehensive list, but we tried to cover most areas and companies in the space.

‍Note: if you’re unclear on any terms or phrases being used, remember to read our Franchising 101 post that functions as a dictionary for the lingo used in franchising.

‍Other than Wonder Franchises, FranDawgs does not have any formal relationship with any companies mentioned. 

Market Size

In terms of the number of brands, there are roughly ~3,000 active franchises in the United States.

It’s estimated that there are 600,000-800,000 active franchise locations operating across those brands.

Every year, roughly 300 new brands begin franchising, though the number of active franchises from year to year is relatively stagnant.

The Players

Franchise Development

The franchise development landscape consists primarily of franchise sales organizations, and franchise broker networks.

Franchise sales orgs are outsourced franchise sales teams that franchisors may utilize to find prospective franchisees. They typically monetize via taking a percentage of the franchise fee, royalty, and/or equity.

Franchise Fastlane is the largest franchise sales organization in the country, both in number of brands they work with, and number of units sold each year. They have the potential to accelerate brands to the point of “escape velocity”.

‍Rep’M Group - likely the 2nd largest franchise development company in the country. A current success story they are working with is Milkshake Factory, a brand out of Pittsburgh, Pennsylvania. 

Other FSO’s

• Excel FD
• Oakscale
• FranSmart
• Brand One
• FranDevCo
• Front Street Equity

Franchise Broker Networks establish contracts with many (sometimes hundreds) of franchisors, and any broker that signs up with a given network gains access to that network's “brand inventory”. Brokers earn a referral fee from those brands if a prospect they introduce becomes a franchisee. 

Below are the most common franchise broker networks:

• IFPG
• FranChoice
• FranNet
• FCC
• FranServe
• FBA

There are also a few newer companies, Franchise Sidekick and Franzy, who sign similar contract agreements as broker networks do, but they employ W2 sales representatives to be the touch point with prospective buyers of a given brand.

Franchise Media

For updates on franchising, whether it’s news on growing and established brands, industry legislation, or more, below are some of the media companies covering franchises.

Note: The FranDawgs team - Patrick and JT - are active on all social media platforms and have thousands of followers for real-time updates on the industry, deals being done, and more.

• FranchiseTimes
• Franchise Wire
• Entrepreneur Media
• QSR Magazine 
• Franchise Update Media

Franchise Technology

Technology that operates at the intersection of the franchisor and franchisee relationship are what we consider “franchise technology”.

For instance - Toast, a popular POS software for the restaurant industry, is not franchise technology. Do franchise brands use toast? Yes. But it is not designed specifically for franchises.

On the other hand, CoverPanda is a business that only works with franchises. They provide centralized bookkeeping for entire franchise brands, and have software that aggregates all the data so that franchisors can coach franchisees to profitability. 

They also provide operating software so franchisors can onboard franchisees and manage their opening process. 

EZee Assist is a new frantech company that utilizes AI to streamline operations. Franchisors can upload all their marketing collateral, operations manuals, etc. and franchisees can integrate their email, phone, slack, you name it - and speak with EZee Assists’ AI Bot to pinpoint and document, or ask any “basic” question that you’d otherwise have to ask via email to your franchisor.

This cuts down time for franchisors, as the AI bot does a lot of their admin work, and also enables franchisees to get answers quicker.

A final interesting frantech company is Transitiv - who functions as a data warehouse for franchise brands, enabling franchisees to centralize data from disparate sources such as CRM’s, Quickbooks, marketing platforms, and more!

For more information about different service providers, capital providers, and so on in the franchise world, see the below image. 

Trends to Expect

“Responsible Franchising”

Responsible franchising became a big trend within the industry, particularly in the latter half of 2024.

The movement in general highlights a shift amongst industry participants, mainly franchisors, and franchise sales organizations, to advocating for responsibly growing brands.

What does that mean in practice? 

To us, it means growing brands at a pace that is sustainable for them i.e. increasing the number of franchisees at a rate that the franchisor can provide the level of support and training a franchisee is entitled to.

It’s happened many times where a brand sells too many territories, and the franchisor cannot support the volume of new franchisees. 

Whether franchisors and FSO’s actually back up their words with actions, will be something to watch out for!

The reality is that FSO’s in particular are incentivized via their business model to sell units, which leaves us a bit skeptical it will actually play out in any meaningful change.

More AI FranTech

EZee Assist is the first AI-driven company in franchising to achieve product market fit, but we expect more use cases to develop around this technology.

At a minimum, any repetitive administrative work that franchisors and/or franchisees have on their plate, is ripe for disruption by AI tools.

Franchise Growth

In general, and as per the IFA’s 2025 report, the outlook going forward this year and the next 4 years is optimistic for franchise brands. 

Regulation that would otherwise hamper new brands coming to market, or the methods in which they try to expand is unlikely to change. If anything, it could lend itself to more people looking to become business owners.

Growth Categories

We don’t currently see a “category” that is set to take off in 2025.

After the last 5-10 years where home-service, pet, cookies, boutique fitness, and pickleball franchises dominated the new franchise headlines, there doesn’t seem to be a “trendy’ category currently.

If anything, FSO’s seem to be curating more niche opportunities. 

The biggest “success” stories of the last few years (solely using franchise unit sales as the measuring stick) would be Ellie Mental Health, and Game Day Men’s Health.

Franchising a therapist's practice, and a testosterone clinic certainly  fit the “niche” label.

Brands we have in our inventory, such as SeaLove, a boutique candle retailer, is an example of a niche brand that could generate interest. Meanwhile, Franchise Fastlane recently announced they are working with an airplane detailing franchise. 

For what it’s worth, that’s likely a positive, as franchises that become trendy lead to saturation quite quickly, which ultimately results in franchisees having underperforming locations.