The franchise industry showed significant resilience and change in the period covered by FranConnect’s 2023 Franchise Sales Index. The report analyzed anonymized customer data to benchmark franchise-development performance across industries.
Market Overview
The broader franchise industry continued expanding in 2023, with economic output, employment, and unit activity remaining strong despite lingering macroeconomic pressure.
Key Findings
- Lead volume: Most sectors increased lead volume, with Commercial & Residential Services showing the strongest growth in the analysis.
- Deals: Personal Services showed the strongest growth in closed deals, while some categories experienced meaningful declines.
- Speed to lead: Brands that contacted leads within four hours of inquiry produced stronger close rates, reinforcing the importance of rapid follow-up.
- Lead sources: Existing-franchisee leads produced particularly strong conversion performance despite lower overall volume.
- Unit activity: Transfers and terminations remained significant, reflecting an active market in which ownership and location performance continued to shift.
Vertical-Specific Insights
Quick Service Restaurants
QSR remained one of the largest contributors to unit openings and transfers while also representing a meaningful share of terminations, reflecting both continued demand and intense operating competition.
Commercial & Residential Services
This category generated strong lead growth and a substantial share of unit openings, while also experiencing significant terminations.
Personal Services
Personal Services showed strong closed-deal growth and contributed meaningfully to unit openings and transfers.
What the Data Means for Franchise Development
The 2023 Franchise Sales Index reinforced several durable operating lessons: respond to leads quickly, understand which channels produce qualified candidates rather than only volume, leverage existing franchisees as advocates and referral sources, and manage development with consistent data across the full pipeline.
For the current benchmark and methodology, use FranConnect’s Franchise Growth Benchmark.
