Every year, franchise brands look for new ways to grow but not every brand grows the same way. While some expand aggressively through sales, others invest in the systems and relationships that help franchisees perform better over time.
The question is no longer who’s selling more units, but who’s keeping them open and profitable.
That question behind is Franchise Growth Decoded, our largest data analysis to date. Drawing on insights from over 850 franchise brands across industries, the study reveals what separates the fastest-growing franchise systems from the rest and the findings are redefining what sustainable growth looks like in 2026.
Why the Data Matters
For decades, the franchise industry has measured growth primarily by sales aka the number of new units opened each year. But sales alone don’t tell the full story. A brand can open hundreds of locations and still struggle with closures, disengaged operators, and inconsistent customer experiences.
By analyzing 24 months of longitudinal data (2023–2024) from FranConnect’s anonymized customer base, this report looks deeper by connecting the dots between operational behavior and growth outcomes.
Using Frannie AI, FranConnect’s proprietary AI data analyst, FranConnect’s proprietary AI, the research identifies statistically significant patterns in how brands manage training, coaching, onboarding, and field support.
The reasoning is simple: success in growth is not reliant on expansion alone. Retention, engagement, and execution must all be considered.
Engagement as a Growth Engine
One of the most striking findings in the report is the link between franchisee engagement and system-wide performance. Across all industries, engagement metrics surged. Course completions grew nearly 60%, document downloads rose 59%, and audit-focused visits doubled year over year.
These trends reflect more than enthusiasm. They also signal a cultural shift. Franchisees are actively seeking guidance, structure, and resources to help them improve. Brands that meet this demand by investing in field coaching, ongoing training, and clear playbooks are reaping measurable rewards.
In fact, highly engaged systems achieved 8.7% growth, compared to just 2.9% among low-engagement peers. Engagement creates alignment, and alignment fuels profitability.
The Retention Effect
Retention may not grab headlines like new sales, but its impact on performance is undeniable. The study found that termination rates dropped nearly 100 basis points in 2024, representing over 1,300 saved locations across the FranConnect cohort. That improvement alone accounted for a 22% lift in performance against the industry forecast.
For large brands, improved retention was the single greatest contributor to outperformance. For emerging and mid-sized systems, it created breathing room that allowed resources once spent replacing lost franchisees to instead focus on expansion and optimization.
In practical terms, retention isn’t just about keeping doors open. It’s about reinforcing confidence within the network. Every franchisee that stays and grows becomes a proof point for future development.
How Top Brands Are Outperforming the Market
The data confirms what the industry has long suspected but struggled to prove: operational discipline drives measurable growth.
Brands leveraging integrated systems where franchisee training, communication, and performance are managed in one connected platform grew at twice the industry average (5.5% vs. 2.6%).
The Multi-Unit Reality
The data also highlights an accelerating reliance on multi-unit development as a growth strategy. More franchisors are awarding multiple territories to experienced operators, streamlining the sales process while expanding market presence more efficiently.
However, this approach introduces new operational challenges. Multi-unit growth increases complexity, demanding deeper collaboration, stronger communication, and consistent performance management. Brands that succeed in this model invest heavily in onboarding systems, territory activation processes, and ongoing franchisee coaching.
What This Means for Franchise Leaders
Whether you’re leading a mature system or scaling an emerging brand, the message is clear: growth without execution is fragile. By focusing on engagement, retention, and operational alignment, you can accelerate expansion without sacrificing quality or control. These capabilities are what transform good brands into great ones and they’re the foundation of the FranConnect platform.
As the franchise landscape becomes more complex, data-driven decision-making has become the new differentiator. The Franchise Growth Decoded report offers a roadmap for navigating this shift grounded in evidence, not theory.
Download the full report today to learn how 850+ franchise systems are redefining growth, increasing retention, and turning operational execution into measurable success.
Ian Walsh
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